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Employee Referral Programs: Make Them More Effective with Goals

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One of the most effective ways to source talent for your organization is through employee referral programs. Referrals often provide the best candidates at the lowest cost-per-hire. While an employee referral program shouldn’t be used exclusively as a recruiting source, it can be a very effective one.

Given how well employee referral programs can work for companies, do you have a goal for the program? And I don’t mean “get as many referrals as you can”. If you think about it, whenever we create programs, we have a goal for the program. It might be to hire XX candidates OR reduce recruiting costs by XX amount OR improve quality of hire by XX percent.

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The reason I’m bringing this up is because I’ve had some conversations recently with talent acquisition professionals who talk about their employee referral programs differently. For example: “Thank You” bonuses. Some organizations thank employees with a referral bonus for saving them money and time sourcing candidates. Others don’t. They feel employees should want to refer the company to others, like it’s part of the job.

The company’s philosophy on referral bonuses should be part of the program’s goal. And it should be communicated to everyone. Because the company’s philosophy will drive future decisions about the program.

Just because we know what an employee referral program is, doesn’t mean the program shouldn’t have a goal or purpose. The last thing that organizations want is the program to lose its effectiveness. Here are a few suggestions of topics to discuss when it comes to employee referrals:

  1. Is this an “employee” referral program or a “referral” program? Some organizations are opening up the program to former employees and customers.
  2. Is a goal of the program to save money on recruiting costs? And if so, does it make sense to pay a bonus to individuals who save the company money?
  3. Should a goal of the program include quality of hire? If that’s the case, how will the company measure quality?
  4. Similar to quality of hire, should a program goal include length of employment? Meaning are referrals subject to candidates staying with the company longer?

You see where I’m going with this. I continue to hear how tough it is to find and keep talent. I also hear about how good employee referral programs are. Maybe it’s time to have some defined goals for the program, along with established ways to measure results. Not only will that keep this source effective, but maybe even improve it.

Image captured by Sharlyn Lauby while exploring the streets of Austin, TX

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About Mildred Blankson

I am a Human Resource Professional with a Masters Degree in Human Resource Management. I have several years of experience in Human Resources and i hope this blog will be a great resource in helping you find the perfect job or candidate that you seek.

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