3 Reasons Why Having An Employee Referral Program Is Important

  • Added:
    Jul 03, 2014
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3 Reasons Why Having An Employee Referral Program Is Important Photo by Savio Vadakkan

One of the biggest advantages of recruiting through employee referral programs is the inflow of highly productive talent into the organization, that too in a highly cost effective manner.  Numerous studies have conclusively shown that hiring through a referral program can have a significant impact on the bottom line of organizations because of higher employee productivity and morale and low attrition and hiring cost. The one catch in implementing a referral program is to be able to derive maximum returns from it. Since the success of a referral program is dependent by and large on the active participation and engagement of employees, actual implementation of a program that can actually connect with employees constitutes the biggest challenge for recruiters and the HR team alike.

How a referral program is implemented determines to a large extent on how much benefit the organization can actually derive from it. A few pointers can help you put in place a referral program that can be successfully executed for maximum returns.

The most potent way to ensure the success of your employee referral program is to build a solid communication strategy around it. Communicate the referral tool, its features, and benefits of the referral program to all the employees and to the organization through as many forums as possible. Use innovate marketing tactics to catch employee attention and sustain interest in the program through regular competitions, campaigns and other referral related activities.

Secondly, build a reward and recognition scheme around the program that seeks to recognize even small achievements in the program as well as handsomely reward the high performers in the employee referral program. This means that all employees participating in the program by referring someone should receive small tokens of appreciation in the form of gift certificates, hand written appreciation notes, referral branded collaterals etc to make them feel good about participating in the program and to motivate them to keep referring. Employees with successful hires should be motivated even further to keep referring by both rewarding them with an appropriate referral bonus as well as recognizing their achievement in company- wide forums.

Thirdly, the biggest complain that most employees have with referral programs is slow or no response to referrals from them. Putting in place response time SLAs to ensure recruiters respond to both employees and the referred candidate within an expected time frame can give a big boost to your program. Follow this up with regular updates to employees on the status of their referrals as well as feedback received from hiring managers to ensure employees remain well looped into the process and aware of exactly what stage of the recruitment process their referred candidate is on.

By ensuring that these building blocks are well laid out in the referral program can go a long way in helping organizations maximize return on investments in the program as well as continue investing in the referral program for future returns.

Author's Profile

Savio Vadakkan is the Marketing Professional at ZALP, a leading employee referral tool. Zalp enables organizations to boost their employee referral hires by implementing an effective employee referral program.


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