The Power of a Strong Employee Referral Program
Among recognized Best Companies, robust employee referral programs are the norm. However, a recent small-scale study by Software Advice reminds us that for some organizations, existing employees are an underleveraged resource when it comes to recruiting efforts. Among survey respondents, 45% reported that they do not currently participate in their company's employee referral program. The majority of these respondents (81%) said the reason for this is because they don't know anyone who is a good fit for a position, followed up by insufficient rewards (20%).
How can organizations bolster their employee referral programs and increase participation?
According to the study, when it comes to incentives to participate, monetary rewards are the top draw, as 89% of survey respondents reported money to be the most encouraging reward. This was also the most common type of reward amongst top referral programs (51%). Among the 2015 Fortune 100 Best Companies to Work For, 66% offer referral bonuses of over $1,000 for a successful referral.
Let's also give a little fist pump for living in the age of Social Media, because this makes the "I-can't-participate-because-I-don't-know-anyone" hurdle easy to overcome, and offers an simple avenue for employees to be involved. If an employee shares a position via social media, even if none of their "friends", "connections", or "followers" apply, one of these people might still share the position to his/her feed, and subsequently, one of this person's connections could apply (ensue domino effect).
Summed up in Software Advice's report by Nick Leigh-Morgan (founder of ATS software vendor iKrut): "Employers have to see employees not [only] as people who might immediately know somebody that's suitable—they have to see them as marketing people." Keep in mind that the less cumbersome sharing efforts are, the more likely employees are to participate (consider applicant tracking software or internal portal options that let employees share job postings to social media with just a click).
Why is it Important for Your Employees to Double as Recruiters?
Great workplaces value their culture, and when a company values its culture, they place strong emphasis on bringing people in who will promote and enhance that culture. Given existing employees are well versed in their company's culture, they can easily identify people who they come into contact with that would be a great fit. Existing employees' friends are also (given their association with that employee) likely to be a "fit."
By leveraging existing employees in hiring efforts, employees become recruiting foot soldiers who can bring great cultural-fit candidates into a company. Among Fortune 100 Best Companies, employee referral bonuses can reach upwards of $15,000 for a successful referral, speaking to the high premium these companies place on talent coming in from existing employees. Additional benefits of employee referrals are described in this article by Dr. John Sullivan.
Bottom line: It's a great idea to invest in employee referral programs and to actively encourage your employees to use them by offering referral bonuses. Your company will reap the rewards in the form of bringing on employees who others enjoy and who are likely to be a long-term success.
