How to create a Good Referral Program

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As per research, Employee Referrals is going to become one of biggest channel of hiring in most companies.
And why not so ! Employee Referrals has its own clear advantages.



Read more on Why Employee Referrals are one of the best ways to hire !

Creating a Long Term Referral Program for your Organization
Employee Referral is not just another way of hiring. It is in essence, a way of engaging with your employees and getting the maximum out of this symbiotic relationship. Better the engagement, better the results. Organizations with great resources tend to carry a huge combined network strength; the need is to tap into the same for quality hiring.

Consider this, an organization with an employee base of 1,000 employees with each employee having a conservative network strength( Network strength is the number of people a person can reach out to through email, social media and in-person) of just 500 contacts, translates to a combined network strength of 5,00,000 contacts.

And mind you, these are all relevant contacts since an employee is more likely to have people with similar profile, interests and qualifications as her own. It is thus, imperative that the Referral program engages with employees for a long term synergy than just short term gains.

1. WHO to engage
A typical referral hiring program reaches out to employees. This may work well for some organizations but in order to be effective for most companies some important extensions are needed.

(a) Reaching out to only employees may restrict the upside of the program – it needs to drill down to the employee network level. Employees may not be able to recollect at all times, the best candidates in their network for a position but if this position can be shared to the complete network, the virality and reach can be maximized.

(b) If possible, Employee Referral program needs to be extended to past employees(Alumni) of the organization. Over a period of time, Past employees number may swell well beyond the current employee strength. It is only wise to reach out to this audience for Referral hiring.

(c) Although it looks logical to share an open position with all employees of the organization to maximize hiring, the most effective way would be to identify the right employees for each position.
For instance, employees in your customer support team may not be able to help out for hiring a mid-level marketing executive.

2. HOW to engage
Research says, more than a third of people refer to help out friends/acquaintances. Important point to note is that Referrals for an incentive is not far behind and is the second biggest reason “Why employees Refer”.
Right Referral Incentive is the key for your Referral program and can make a huge difference in the way employees view and respond to a Referral program.
Cash Incentive or Benefits-in-kind are the most common types of Referral Incentives.
Public Recognition, Friendly competition and Referral for charity are some other innovative incentives that have been found useful by organizations.

3. WHEN to engage
It is seen in a lot of cases, that though the initial launch of a Referral program may bring in lot of participation, “the dip” is not far way which is marked by reduced enthusiasm and participation levels.
Consistent engagement at all levels is thus, the key to a successful referral program.
Frequent communication and branding has been found to be extremely effective in maintaining consistent interest levels of employees in a referral program.

We will cover the above points in detail in our future posts. Keep reading and Happy Hiring !

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