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How to Implement an Employee Referral Program when Hiring

November 18th, 2015

Finding just the right people for your organization often takes time and practice. It’s worth the effort when the company has built a strong team of skilled people. However, in some industries it’s challenging to find candidates who will fit in well with the corporate culture and have the skillsets needed. Employee referrals have been shown to reduce the time it takes to recruit new hires by as much as 50 percent, according to a recent report. This increases the ROI of recruitment dramatically.

How can your organization implement an employee referral program?

Fortunately, it’s relatively easy to get started with an employee referral program to boost hiring results. Here are some guidelines for a successful employee referral program.

Create a Written Policy for Employee Referrals

Make it clear to all employees how your employee referral program will work, how current employees should direct peers to apply for new jobs, and how and when any referral bonuses will be paid out. Put this policy in writing and add it to the company employee handbook. Let your staffing agency know you accept direct referrals and how they can help facilitate this on their end.

Set up the Technology to Handle Employee Referrals

If you use an applicant tracking system, add a box to let candidates share who referred them to a job opportunity. Or have employees submit their leads through a special email box set up for this purpose. You will need a way to handle employee referrals and track bonuses, so set that up now.

Make Sure Employee Referral Programs Align with the Company Brand

A CareerArc study revealed that, “75 percent of candidates consider the way the company presents their brand before they apply”, therefore you will want to ensure your referral program honors the company brand. Start with the corporate web page that displays your careers information. Does it appeal to direct referrals as well as outside candidates who may be applying?

Educate Current Employees about Referral Opportunities

Roll out the employee referral program by scheduling a staff meeting to go over the details with all employees. Encourage them to submit the name and contact information of at least one colleague who would be a good fit for the company. Talk about the incentives for doing so. Let employees know how important it is to select the best employees and that they can participate in building a strong team.

Once you have implemented your employee referral program, your employees should start sending in their leads for recruitment. Use the above tips to set up an employee referral system that provides the maximum ROI.

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