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Recruiters: How to Make Employee Referrals Work for You

Posted by Ashley Jones
referrals

Searching for talent is the name of the game in recruitment, but we know how valuable it can be when someone else suggests a prospect. In fact, employee referrals are often the quickest way to find talent—sounds pretty appealing given the tough market cleared recruiters are currently facing.

According to Deltek’s annual survey of government contractors, “53% of respondents cited attracting qualified talent as one of the most salient Human Capital challenges in 2021.1” A successful employee referral program is crucial when it comes to overcoming labor shortages and the increased competition in the government contracting industry.

Is your company focused on maximizing and incentivizing employee referrals? Read these insights to boost your referral game.

Employee Referrals Rise as Top Hiring Initiative

Increasing incentives for referrals among existing employees rose to the top hiring initiative in Deltek’s survey of government contractors. 49% of human capital specialists indicated this is the top talent acquisition initiative that their organizations most relies on.1

Why are referrals gaining attention? As the market offers candidates more flexibility than ever and a buffet of openings to choose from, employers must work hard to attract and retain top talent. Here are some of the benefits of referrals that are working for employers:

  • Referrals are 4x more likely to be offered a job than website applicants.
  • The average employee referral takes 13+ days less to hire.
  • The cost-per-hire of employee referrals is $1,000 less on average than other hiring sources.
  • 70% of businesses agree that referrals have the best culture fit for their company.
  • Using referrals increases retention by 40%.2

So if you’re interested in decreasing time to hire, saving recruitment dollars, and hiring candidates that will stay longer because they’re a better fit, consider how you can improve your employee referral program.

Companies Making the Most of Referrals

In our conversations with cleared employers in our podcast series, multiple recruiters have shared successes about their referral programs and expressed what a great tool they are. Taryn Lazroff, Lead Intelligence Recruiter with Noblis noted, “Referrals are gold for recruiters. I mean, we love them, right? Send them our way!

Noblis doesn’t limit their referral incentives to existing employees. They use an external referral program on their website that anyone can use (and it can pay up to $5,000) to help them fill positions more quickly. Hear more from Taryn in our recent Security Cleared Jobs: Who’s Hiring & How podcast episode.

Another company focused on referrals is St. Michael’s. Their employee referral program is their number one source of hire. “Employee referrals is one of the best ways to find folks,” admits Mark Michalski, VP of Client Experience at St. Michael’s. “There’s something special about an employee referral, because it tells me multiple things. One, the employee that referred this person is really happy at St. Michael’s. I would not personally recommend somebody to come and work at a company that I didn’t care for very much.”

“The second thing is, they have some personal stake in it – they know this individual,” adds Mark Michalski. “It is a vetting step towards getting the right hire. So it’s a win-win for everybody.” Speaking of win-wins, St. Michael’s offers a bonus to anyone that makes a referral after that person has worked there for 90 days. Stay tuned for Mark’s podcast episode, airing July 20th.

Similar to Mark’s sentiment that a referral tells him that the referring employee is happy, Jada Fowler, Technical Recruiter with DTSI, also takes them as five-star reviews from current employees.

“We like to stay in touch with our employees and make them feel like they are part of a team and a family,” says Jada Fowler. “I think that’s proven through our culture and the people that we have, because a large percentage of our positions are filled by referrals. We’re pretty proud of that. And so that always feels good when current employees are actually referring their friends to join us.” You can hear more from Jada here.

Tips for a Great Referral Program

If your organization hasn’t yet designed an employee referral program, or you’re looking to see how yours can be improved, read further for some helpful tips.

MAKE IT EASY

First and foremost, is your referral process easy to use? Just as an overcomplicated job application can decrease applicants, a referral program with too many caveats and restrictions can stand in your way too. Keep ease of use in mind as you develop your program.

Your process can literally be as simple as having your employee submit the name and email of the referred candidate. Bonus points if you can also make it easy for your employees to share your job postings, whether that be with their network on LinkedIn or via a personal email.

STANDARDIZE THE PROCESS

As with many things in life, consistency is key, so standardize your process for requesting and handling referrals. An example workflow might look like this:

  1. A role becomes available and the job is posted.
  2. For hard to fill roles or those that need to be filled ASAP, the recruitment team can send out a call to action for referrals for a specific opening.
  3. Employees search their network for a match and reach out to their contact about the opening.
  4. The referring employee forwards the resume of their referral to the recruiter.
  5. The referral is noted/tracked so the employee can be given credit.
  6. The referred candidate is screened by the recruiter in a timely fashion.
  7. If successful, an employee referral bonus is given.

Consider developing a standard form employees can use to submit a referral. Going back to making it easy though, try to keep it to basics like their name, their referral’s contact info, and the role they are referring them for. You can ask additional questions later. Your priority is to make it simple enough that you actually get referrals in hand.

INCENTIVES AND REWARDS

Another way to ensure you get referrals is to incentivize the process and offer rewards. While a financial bonus is often a great way to promote participation in employee referral programs, there are other options, like:

  • Extra PTO
  • Gift cards
  • Trips
  • Company-wide recognition

Also consider how you will structure the distribution of these rewards and bonuses. Will you pay out a bonus as soon as the new hire is onboarded, or will you defer the bonus till the new employee has worked a set amount of time? You might even opt for two payments—one upfront and one after they’ve reached 90 days of employment.

Rewards don’t have to be exclusive to referrals that cross the finish line either. To ensure your employees feel appreciated for their efforts you might award small prizes to those who submitted a good lead.

COMMUNICATION

How and when you communicate information is key to continued program success. First off, your employees will need to learn about your referral program and be reminded of opportunities to participate. So make it part of your spiel to tell new hires about your employee referral program, share the news with existing employees, and follow up by recognizing top referrers in internal communications.

Good communication is also timely, so be sure to follow up with referred prospects quickly and keep your employee who made the referral in the loop to let them know you’ve received their submission and have followed through.

Overall, referrals are just one part of your existing recruiting strategy, but they can be an ace in the hole for hard to fill positions. It takes a village sometimes, so be sure you incentivize yours for improved recruitment and retention.

1 2022 Deltek Clarity Government Contracting Industry Report
2 https://www.zippia.com/advice/employee-referral-statistics/
This entry was posted on Wednesday, July 13, 2022 7:09 pm

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