Encouraging Employee Referrals
Common wisdom tells us that in a time of high unemployment, it’s easy to find your next employee.
Common wisdom is wrong.
It’s true that there are a lot of people looking for work right now, but that doesn’t necessarily mean your next employee is one of them. And even if they are, that doesn’t mean that they’ll be easy to find. Even when the economy is soft, the talent market is always competitive. This means that developing your talent pipeline is just as important as ever, however, the economy is doing. In fact, it may be even more important now, because there are plenty of employers who will buy into the idea that lots of job seekers means easy hires. That means that they won’t be paying as much attention to talent acquisition as you will.
The idea behind developing a talent pipeline is to find the kind of people that thrive at your company. Fortunately, you already know some of those people – they already work for your company. They’re the successful employees who help build your company and strengthen your employee culture. And your goal is to find more of them.
So why not start by asking your employees for referrals?
What’s so Great About Employee Referrals?
When employees refer their colleagues and friends to your company, your hiring costs go down. Candidates that come from your employees are hired more quickly and at a lower cost than other candidates. They stay with your company longer, they are often top performers and they’re more likely to refer other employees. So, lower recruiting costs, faster hiring time, and a stronger talent pipeline. How can you pass that up?
Encouraging Referrals to Build your Talent Pipeline
There are a lot of ways to build your talent pipeline. You can network, you can advertise, you can use online tools like LinkedIn and Twitter, and, of course, you can always create a job posting. A strong talent pipeline strategy will involve all of these. At the same time, you should be actively encouraging your employees to make referrals. These folks know what it’s like to work for your company, so anything they say will automatically carry more weight for the people they refer. And they already know more about their referrals from anything you’ll get from reading their resume or even during an interview. People who refer their friends and colleagues will have extra knowledge that may help you during the interview process.
Making an employee referral should be simple
Take a moment to imagine making an employee referral. Put yourself in the shoes of an employee and forget everyone and everything you know about how your company runs. Just pretend you’re someone in, say AP or Marketing. Now, without any of the knowledge that you have, how do you make an employee referral? Where do you go? And what information should you provide? For that matter, what jobs are open at your company right now?
If you found this exercise frustrating, congratulations – you have something in common with most of your employees. They won’t know how to make an employee referral if no one tells them how to do it. And they probably won’t make an effort to find instructions.
Make it easy for your employees – tell them how to make an employee referral often. One way to address this is to create a special email address for referrals, and then encourage your managers to include it in their email signatures. The end result could look something like this:
Jane Doe Director of Operationsjanedoe@companyname.com
Know someone who wants to work here? Send a message to referrals@companyname.com
You should also take advantage of any opportunity to increase the visibility of your employee referral process.
What are you hiring for right now?
One of the best ways to get referrals from your employees is to tell them what positions you have open. Send your job postings to your employees and encourage them to share with their own network of friends and colleagues. Make a link for referred employees on your corporate jobs listing page. Show that you take employee referrals seriously.
You should also involve your employees in your talent acquisition efforts, especially when you’re hiring their next teammate. Offer informal meetings with your talent acquisition team to discuss their recruiting plans for the upcoming quarter. These meetings will also be a natural time to talk about your employee referral process as well.
Respond to referrals quickly
Nothing is worse for referrals than making the employees feel like they’ve gone down a black hole. Making a referral takes some effort and more than a little faith in your company, so make sure your employees know that they’ve been heard, even if you aren’t going to hire the person they’ve referred.
Be sure to send an e-mail acknowledging receipt of the referral, and contact the people your employees refer quickly. Every person who is referred to your company by an employee deserves at least a phone call.
Once you’ve received the referral, be sure to give your employee feedback. Let them know where their referral is in the interview process. You don’t have to tell the employee everything, but an update, like letting the employee know that an interview has been set up. If the company isn’t going to hire the referral, you should let the employee know that as well. Even a “no” will at least tell the employee that you value their involvement and that you encourage further referrals. Keep your employees in the loop.
Offer referral training
One of the main reasons people don’t offer employee referrals is because they don’t know how to talk to their colleagues about it. It can feel kind of awkward to ask someone if they would be interested in a new job, so make it easy - try offering a short video on how to begin a conversation. You could also offer an email template for employees to send to anyone they’d like to refer to the company.
Give a small bonus for the referral itself
Not every referral will result in an immediate hire (although you should keep any referred employee in your talent pipeline). This may seem obvious, but it can still be discouraging for employees who make multiple referrals that don’t go anywhere. One remedy for this is to give a small reward for the referral itself. It doesn’t have to break the bank – it could just be a $5 Starbucks card, extra time on their lunch break, or an excused late arrival. The point of this is to show your employee that their referral has been appreciated and to encourage more referrals.
Recognize successful referrals
Be sure to take the time to recognize successful referrals beyond any bonus or award the referring employee gets. Take the time to let everyone know that “Jane Doe in Accounting” has made a successful referral. When someone who was referred to the company gets promoted, be sure to note who referred them – “As of October 12, John Smith will be promoted to Director of Marketing. John was referred to Our Company by Jane Doe. Congratulations to John and thanks again to Jane!”
Take the time to acknowledge the extra steps an employee makes to build your team.
Use technology to track referrals
Once you start getting a lot of referrals, it can be difficult to keep track of which employee made which referral. Fortunately, we now have the technology to address this very question. You can use your ATS to tag a referral with an employee’s name. You can also allow your employees to upload their referred colleague’s resume, cover letter, and other information. As always, contact the referral quickly and let the employee know what’s happening. Being as transparent as possible will help encourage more referrals.
The Side Effect of Employee Referrals
No one refers employees to a company that they don’t want to work for. If turnover is a sign that your company is doing something wrong, employee referrals are a sign that your company doing something right.
Fortunately, the act of accepting, and responding to employee referrals helps encourage employee engagement. When you give your employees the chance to be involved with your talent acquisition effort, you are helping them to identify with the company and take an active role in shaping the company. You can see it in your own career – how many times have you wanted to have some input into who gets hired into your company?
Developing a talent pipeline is an on-going project that will, ideally, never end. You should always be looking for ways to expand your company’s network (as well as your own network). Doing so is a definite win/win – you get better employees, and your employees get better co-workers. How great is that?
