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DEVELOPING A SUCCESSFUL
EMPLOYEE REFERRAL PROGRAM CINDY YARBROUGH
AGENDA
• Increasing quality employee referrals
• Engaging current employees in the
talent acquisition mission
• Partnering with the hiring teams on
targeted campaigns
• Implementation of a successful
employee referral program
• Guiding more relevant referrals
• Budgeting
• Measurement of success
2
INCREASING QUALITY EMPLOYEE REFERRALS
• Companies filled about 20% of their
openings with a Employee Referral
Program
• It isn’t easy to design a good ERP;
however running it successfully requires
attention to details
• Within a year of having the ERP ideas in
place, companies should be able to
achieve referral rates as high as 50%
Source CareerXRoads-2015
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ENGAGING CURRENT EMPLOYEES
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SPEED
APPLICATION-TO-HIRE TIME
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• Research has shown that successful employee referral programs can speed the time-to-hire by 48% over other sources
• Not only because you have more candidates applying for open jobs, but because you can stockpile referrals to build a talent pool that’s ready to apply
– Source- index 2015
RETENTION RATES
After one year of employment,
referred employees have the best
retention rate at 45% retention
after one year compared to 33%
from career sites and 22% from
job boards
Source- Jobvite index 2014
45%
33%
22%
Employee Referral Stats
Referrals
Career Sites
Job boards
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EFFICIENCY
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Applicate-to-hire ratio
• Referrals are #1 and are hired at a rate of 1 out of 3 applications for top-performing firms and 1 out of 10 at average firms. (Compared to an average applicant to hire ratio of 1 out of 18 from all sources).
• An Employee Referral Program can help recruit “hard to fill” and/or specialized roles.
• An ERP can also help fulfill diversity goals, if desired.
Source: Dr John Sullivan and Associates research
WHICH MEANS, THE MORE REFERRALS YOU HIRE…..
• The higher the ROI from each employee on average
• The more high quality employees you will have
• The faster you will fill your openings
• The less turnover you will have
• The more efficient your recruiting process
• The less money you spend on other methods of recruiting
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9
PARTNERING WITH RIGHT HIRING TEAM
NOT ALL ERPs ARE CREATED EQUAL
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WHAT ARE YOU DOING NOW?
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• Focusing on financial incentives
• Delaying and dividing those financial incentives
• Not much transparency through the process
• Promotional materials are non-existent
• No leadership engagement
ACCORDING TO RECRUITING ROUNDTABLE
Best-in-class employee Referral Programs:
• Emphasize recognition and modest rewards
• Have a well-defined, transparent process
• Provide comprehensive materials to educate
employees about the positions they are we’re
focused on
• Provide a suite of emails and other materials
that their employees can uses when they
reach out to potential candidates
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WHAT’S NEXT?
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IMPLEMENTATION
Ask yourself the following questions:
• What’s the purpose?
• Is the program global or local?
• What are the tax implications involved in
offering a reward?
• What is the overall goal of having a
referral program?
• What does the administrative process look
like? How will the process work? Who will
administer the program? How are referrals
tracked?
• What positions are eligible for a reward?
• What will training look like for employees,
recruiters and coordinator?
• What does success look like?
14
THE BRAND
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With the help of marketing you will go beyond simply a referral “policy” and create a complete
brand, including a name, a logo, and multimedia campaign. This will help spread awareness, generate
excitement, and cement the idea with your employees as a worthwhile individual pursuit.
THE MULTIMEDIA CAMPAIGN
WOULD INCLUDE
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• Posters around the office
• Table tents on tables in break room and conference rooms
• Screen savers and computer log-in pages
• Kickoff campaign: Pass out flyers and swag
EXAMPLES
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SHAREPOINT HUB FOR ALL ERP INFO
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• The new program should have a prime real estate on your SharePoint or Intranet so employees have a place to go for:
– Info on how the program works
– Online submission forms and any process requirements
– “Hot Jobs”, key upcoming openings
– Description and narratives about your openings
– Reward/payout information
– Success stories
– FAQ’s
Avoid the
black hole
INCENTIVES
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• $500 for an internal referral that becomes
a hire, with that amount increasing
commensurate with the difficulty of the hire
• Payouts should be paid in one transaction
within 30 days of the start date
• Monthly or quarterly drawing to provide
“participation awards”: small gift card,
tickets, etc
WHAT SHOULD THIS COST
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• As consultants, we learned a long time ago that what one company can do with $100,000
would take another organization five times as much (think government). The secret to
budgeting for a world-class ERP is working backwards. Ask yourself the following:
– How many hires are projected for the next budget cycle (growth + attrition)?
– What percentage of hires would we like to generate via the ERP: 35%, 46%, 70%,
or more?
– What resources would be required in your organization?
• Estimate the cost for each resource identified and total them up.
• Now add about 20% to cover things you might have overlooked and you’ll have a decent
budget for year one.
22
Overly complicated, divided payment incentives…..
For positions requiring 0-2 years of experience-$250 at 6-mo., $500
at 12-mo.
For positions requiring 2+ years of experience-$500 at 6-mo., $1000
at 12-mo.
Essentially, $750 entry
Smaller, simpler, immediate, more effective payment incentives…
$500 standard referral bonus more for exceptionally difficult fills
A transparent process, with a central hub so your employees know where to go for information and resources
to make the process easier.
Before
After
MEASURING SUCCESS
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MEASURING PROGRAM SUCCESS
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You will Measure:
Source of hire
Retention by source of hire
# and % of employee referral hires
# and % of employee participation in the program
Total cost of recruiting in major categories (agencies, Job Boards)
Time to fill by source of hire
Which you will use to determine:
Increase in percentage of hires from Employee Referrals
Improvement in retention for employee referrals compared to other sources of hire
Improvement in time-to-fill
THANK YOU!
