Marketing & HRHow to create an effective employee referral program?

Regardless of the industry in which the company operates, if it carries out any recruitment processes, it wants to attract the best possible candidates.
Updated at11.01.2024
Published at11.10.2022
Aneta Wodarz
Aneta Wodarz

HR Manager

Table of contents

  1. Introduction
  2. 1. Develop an employee referral program policy
  3. 2. Choose the appropriate reward
  4. 3.  Update your team
  5. 4. Reach people outside your company
  6. Conclusion
  7. Insights from HR and EB in the IT industry

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Introduction

Almost every company on the market, regardless of the industry in which it operates, if it carries out any recruitment processes, wants to attract the best possible and quality candidates. HR professionals often use many solutions, such as new job board or headhunting, which often also involve a lot of time, people, and money. Unfortunately, all these activities don’t always bring real benefits in the form of employees who will stay with the company for years. So what can be done to attract the best and most loyal potential candidates?

Undoubtedly, the best possible solution is the employee referral program.

Do you have an employee referral program? Is it working well, and your employees are engaged? Not? This blog post is definitely for you.

The employee referral program is a program in which instead of looking outside for a job candidate, your current employees recommend a candidate for the company. The recommended people are usually close friends or even family, so you can be sure that such a person will be trustworthy, reliable, and competent. By the way, in the onboarding process, the new employee will have additional support from the person who introduced him to the company, which will facilitate its onboarding and prevent any problems in the future. You may not find a more reliable employee on the market yourself. You can search for a long time, and of course, you will probably find competent people, but you’ll never be 100% sure about the candidate's skills, and in the case of a recommended person, such certainty is already there. Sounds good?

What makes the referral program effective?

1. Develop an employee referral program policy

For the referral program to be effective, first, it’s necessary to establish the principles and conditions of its functioning in the first step. Have you already determined what conditions will have to be met for the referral award to be paid? Do you know what deadlines you have to include? Which jobs will the program cover and which will not? Think about all the conditions, write down the rules, and consult your accounting advisor to make the settlements of the program easy for you and your employees. When you have all this ready and written in the relevant regulations, present the rules to your employees, explain any doubts and carry out the correct implementation in the company. Remember that the better you communicate all the rules to your employees, the more engaged they will be. If you skip this step, your employees will not know the program's purpose, and they will not even understand its benefits.

2. Choose the appropriate reward

For the program to be attractive, employees must receive an appropriate reward for recommending someone to work. The most common bonus on the market is a cash bonus to the salary, sometimes some intangible benefits. If you’re considering a cash prize, remember that the amount cannot be too low. The award must be attractive enough for the current employees to recommend their colleagues to work. Think about your financial possibilities, and adjust your referral program accordingly. Perhaps it would be better for you to develop several levels of rewards, e.g., depending on the job position or seniority of the potential candidates. If you don’t have the option to include all recruitments in the referral program, then maybe just a few. Check what will be the best and most convenient for you, and at the same time take into account its attractiveness of it for referring employee.

effective employee referral program

3.  Update your team

For your referral program to operate effectively, your team needs to know who you are currently looking for. To be able to know this, you must inform everyone about the position you are looking for, what the requirements are, and what skill set the employee must have. It would be good if the team also knew what personalities you are looking for in the team, which will make them work in the company with similar people and people will simply like each other. Perhaps it’s worth preparing a Culture Book (e.g., Mobile Reality Culture Book) and regularly reminding them about the most important values. This will make the team attract only people with similar values. How to inform the team, then? Can you update everyone on the company's communication apps, send a newsletter by e-mail, and maybe remind them about the recruitment at 1:1? There are many options, so it's up to you how you organize it all. Remember, that nothing bad will happen to you from having too much information. Sometimes it's better to update your team too often than never.

employee referral program

4. Reach people outside your company

Have you ever considered the option of implementing a referral program also outside your organization as a recruitment strategy? This means that not only your team has to recommend and earn money on a referred employee, but also anyone from the outside. What does it mean? If someone has a good candidate for a job and would like to suggest it to your company, they can of course do so. They receive the award on a similar basis to your employee, e.g., when the new hire proves successful at work and works for 3-6 months. We’ve not introduced this in the Mobile Reality yet, but maybe it can be considered in the case of new, exciting recruitments, hmmm?

Conclusion

The referral program is one of the best options for acquiring the best potential candidates for your organization. For HR professionals its real facilitation of everyday work, for the company the benefit of a trusted employee, and for employees the certainty that they work with people they simply like. There are a lot of pros to the referral programs, and almost no cons, but there may be cons nonetheless. What? If you don’t make sure that your program is good as possible, with clearly defined rules, and if your employees don’t understand its rules, it will be a huge problem. It will not be effective and will not bring any employees to your organization.

Insights from HR and EB in the IT industry

Are you curious about the unique challenges and innovative solutions in HR and employer branding within the IT industry? At Mobile Reality, we're excited to share with you a wealth of insights from our experiences. Discover the problems we face, the strategies that drive us, and the creative ideas we implement in our HR and employer branding initiatives. Dive into our collection of related articles featured on our blog – a treasure trove of knowledge awaits you:

Enjoy exploring these insights. Should you have any questions, don't hesitate to reach out to us. If you're interested in joining our dynamic team, explore the opportunities in our career section and submit your CV. We look forward to hearing from you!

Did you like the article?Find out how we can help you.

Matt Sadowski

CEO of Mobile Reality

CEO of Mobile Reality

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