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A referral program is a wonderful way to grow your business and generate new leads. For example, if you run a hair salon, the idea behind this can be that every time someone gets their haircut with by referring someone else who then pays for services as well, you get the chance to turn them into a customer. It’s effective because it puts all of the risk on one person (the referrer) so that everyone feels free to join in!
The “employee referral program sample email” is a template that can be used to create an employee referral program. The email has the information about how to set up the program, and also includes a link to the company’s website.
Employee referral programs include requesting workers to suggest people who would not have applied to your vacant positions otherwise and compensating them for their efforts. Because most workers would only suggest people they feel may thrive at the position, it provides you access to higher-quality applicants—and may cut recruiting expenses and time to hire. Your ultimate aim is to get high-quality recommendations from your workers via a basic and uncomplicated method.
To get started, download our free template and follow the steps outlined below to create an efficient employee referral program.
Download a Word or Gdoc version of the Employee Referral Policy Template.
Step 1: Establish Your Company’s Objectives
The first step is to answer the following question: “Why do you need an employee referral program?” Consider the following follow-ups:
- Do you have a hard time locating qualified employees?
- Do you have a lot of vacant jobs that haven’t been filled in a long time?
- Are you expanding and planning to recruit a large number of new employees?
- Is it possible that you’re wasting too much time and money on hiring?
You may determine your short- and long-term objectives by considering these questions. Knowing what you want to accomplish is crucial to creating an employee referral program that works for you. Here are some typical consequences to anticipate:
- lowering your company’s hiring costs
- reducing the time it takes for your firm to recruit
- Passive job searchers are being targeted.
- Increasing your access to a bigger pool of eligible candidates
Step 2: Establish a Process & Rules
Keep it simple while establishing the employee recommendation procedure. Employees won’t do it if it takes too long, or if they have to fill out interminable paperwork or fill out online forms, and you’ll lose out on potentially valuable recommendations.
Keep it easy by filling out an online form with just the information you need:
- Name of the employee
- Name of the referrer
- The job title or requisition number that is currently open.
- The resume of the referral
- An open box for the employee to give recommendation information.
You may build a Google Form and a unique URL to share with workers in minutes, and they will send all replies to your email. You may quickly monitor referrals and any prizes that need to be given out by automatically populating the replies in a Google Sheet.
To avoid misunderstanding, you’ll also need to define certain rules for the software. Employees who suggest someone your team has previously contacted about an available position are not eligible for a bonus if that individual is hired. Employees who make a reference and then leave before the referral is recruited should not be eligible for any incentives.
Step 3: Determine Your Eligibility
Any employee, in general, is eligible to engage in the program. Hiring managers and HR, on the other hand, should not be involved. Executives, as well as part-time or seasonal personnel, should be excluded. I suggest including a language in your policy stating that only current workers in good standing are eligible for any reward.
You have another source of recommendations besides employees: suppliers and contractors. I’ve lately supported numerous firms in building an external recommendation program to increase an organization’s application pool. If you reward vendors and contractors who are acquainted with your company, they will be more likely to suggest applicants. An external referral program may be a useful complement to your recruitment toolkit. While this should be a distinct policy to avoid blurring the employment relationship line and to guarantee better employee incentives, it can be a nice supplement to your recruiting arsenal.
Step 4: Choose your rewards.
This is where you can have a good time. You may immediately think of financial bonuses for referrals, which many staff would appreciate, but you can also consider additional incentives. Here are several examples:
- Additional paid vacation time (PTO)
- Gifts or gift cards are both acceptable options.
- For greater rewards, there will be random draws.
- Outings with the company
Most workers will expect a monetary compensation in the end. If you go this route, make sure your policy includes tax information so that workers are aware that any award they get will be taxed as a bonus.
You should also specify when awards are paid in your policy. Employees may be eager to get their bonus as soon as a recommendation is recruited. However, you should double-check that the recommendation fulfills your expectations. Referral incentives should be paid only after a referral has worked for at least 90 days.
This time frame achieves a decent mix between keeping your workers motivated to refer others and being paid soon while also meeting your company’s desire to recruit the best individuals. If you believe three months is too lengthy, a smaller gift card might be offered for every reference who receives an interview. This bonus is in addition to any greater bonus that may be paid out once the referral has been active for 90 days.
Giving workers a one-time compensation for providing a reference encourages them to make additional referrals since they are compensated for spending the effort, even if the referral does not result in a job. Even if it means you’ll have to boost your referral bonus budget, incentives are good for your business.
You obtain access to a significant supply of passive applicants, who make up the great bulk of the workforce, when workers submit recommendations. Furthermore, you get to retain the referral’s contact information. It’s possible that the position you’re recruiting for now isn’t the ideal match, but it may be in the future.
Step 5: Talk to your coworkers.
This step is necessary to ensure that your staff is aware of the referral process and how it benefits them. It’s possible that if you don’t correctly communicate the software, you won’t get the desired outcomes. You must decide how you will convey the first strategy and keep workers informed on recommendations they have filed, whether you, HR, or individual managers are in charge of implementing the new policy and procedure.
The first stage is to demonstrate the advantages to personnel (gift cards, cash bonuses, or whatever you choose). Then you must demonstrate why the program is advantageous to the firm (better and more skilled hires, less turnover, and lower hiring costs). Your communication with your staff does not end once they are aware of your employee referral program.
If you’ve set up a Google Form to collect recommendations, be sure to post the URL somewhere where workers can easily discover it. Send an email with a clear subject line and a link to your company’s intranet or electronic bulletin board. This may seem obvious, but the simpler it is for workers to send references, the more referrals you will get.
In order to promote your employee referral program, I also propose launching an internal marketing campaign. This will assist your staff remember the program and guarantee that they always have the most up-to-date information towards the top of their inbox. This doesn’t have to be formal marketing; rather, it should be reminders to your staff about the incentives that are available to them. You may add information about current job openings, upcoming job openings, and a summary of how many recommendations have been hired. To keep workers involved in the referral program, you should send a brief yet useful email multiple times every quarter.
Step 6: Examine the Program Metrics on a Regular Basis
Any company endeavour relies heavily on data. It’s no different with your employee recommendation program. You should keep track of:
- How many workers were employed as a result of a referral?
- When it comes to hiring recommendations vs. job board applications, the time difference is significant.
- The amount of workers who have made recommendations.
- Those hired via recommendations have a higher retention percentage than employees hired through other means.
- How many people have been contacted as a result of a referral?
- The variety of the candidates
- The total amount handed out as a referral incentive to workers.
- Employees’ feelings towards the referral program
Employee recommendation programs often fail because workers are unaware of what happens to a referral after they submit it. Sending a reference into a black hole does not instill trust in the employee that the program is efficient, especially when the person knows the source well.
Transparency is critical to overcome this difficulty and ensuring that workers are kept informed about their referral’s progress. You may keep workers updated about how many recommendations have been received and interviewed for each available job by frequent internal marketing of the program.
The Advantages of a Successful Employee Referral Program
A suggested applicant is 85 times more likely to receive the job, according to one of the most crucial recruitment statistics. This is because recommendations tend to be higher-quality prospects than those found through posting a position on a job board. Employees will only provide a reference if they are confident in the candidate’s ability to succeed in the role. Here are the three most significant advantages of a successful employee referral program.
A reference is more likely to meet your company’s culture and work responsibilities. A current employee who is already a good match for your company’s culture is more likely to recommend someone who is similar. When a recommendation gets employed, the recommending employee feels a feeling of pride and success, which makes them more likely to stay loyal and involved with your company.
When assessing candidates from a job board, one of the most difficult difficulties hiring managers confront is the sheer volume of applicants. It takes time and effort to go through all of the unqualified applicants. Referrals, on the other hand, have a unique perspective on your company’s values, purpose, and culture, as well as the intangibles for the available job. As a result, employee recommendations are of better quality and are more likely to succeed if employed.
Hiring is costly, so whatever you can do to reduce the amount of time and money you spend on it is a wise business move. You won’t have as many applicants with recommendations as you would with a public job posting, making it simpler to rapidly assess each one and decide whether or not to hold an interview. This frees up your internal HR personnel to concentrate on other tasks, such as preserving your business culture and perks, such as your employee referral program. Your organization saves money on talent acquisition while offering your new recruits a more delightful and speedier recruiting experience because of the shorter time to hire.
Legal Points to Think About
Make no mistake: an employee recommendation program may give you with a valuable extra source of talent while also lowering your hiring expenditures. However, you must be conscious of a major legal issue: ensuring that you are not discriminating against protected groups. The easiest method to prevent unintended prejudice is to continue to recruit from a variety of sources rather than relying just on your employee recommendation program.
That is why you must keep track of the variety of employee referrals. If you discover that 95% of your recommendations are white guys, you should rethink your program and make changes to guarantee diversity.
Conclusion
Staff recommendation programs may help your organization improve employee quality while also enhancing morale and engagement. Employee referral incentives will motivate your staff to become your finest advocates. Business employee referral program will remain a crucial pillar of your success if you monitor it and collect precise statistics.
The “employee referral program policy” is a document that outlines the rules and policies of an employee referral program. The policy should have information on how many referrals are allowed, what percentage of the employee’s salary will be given to the referred person, etc.
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