The Complete List of Employee Referral Program Best Practices (Part 2 of 2)

In Part 1 of this series, we looked at the first 35 of 70 exceptional employee referral program features. This episode continues with 36-70 and covers features related to program responsiveness, communications, special needs/populations, technology, and process management.

V. Program Responsiveness Features

Being responsive to those who refer and the referrals they submit are critical features that drive program loyalty, participation, and engagement.

  1. Rapid response to a referral is critical – a lack of responsiveness to employee referrals is the #1 program killer. The best programs set a target of getting feedback to the referrer and the referred individual within 48 – 72 hours of submission (Aricent & AmTrust Bank).
  2. Expedited interviewing – some firms make a commitment to decide whether to interview/not interview all referrals within a week. Others make a more narrow commitment, which is to actually schedule an interview with all “A” quality employee referral candidates within a week of receiving their referral (Owens Corning).
  3. Referrals must be tagged and the processing expedited – in the best programs, all referral applications are tagged in order to measure program effectiveness. In addition, the tagged referrals are given a priority for processing (i.e. fast tracked). This is necessary in order to ensure that both the employee and the referred individual feel like they are “special” (Accenture).
  4. “On the spot” screening – consider developing a process where resumes collected at the referral desk undergo instant screening followed by instant feedback to the employee and the candidate (Tata consultancy).

VI. Communicating with employees and applicants

High-performing referral programs require frequent and effective communications.

  1. Personalize and target your communications – broad communications addressed to all employees almost always produce disappointing results. Instead, develop customized or personalized promotions and campaigns. Write personalized e-mails, tweets, or Facebook entries to targeted job families, well-connected individuals, and top performers alerting them to critical needs in their area. Periodically push relevant job openings that require referrals only to the narrow list of appropriate employees (Amazon & CACI International).
  2. Provide periodic employee notifications after a referral is made— employees are almost always nervous about whether their referrals were any good and what is going to happen to their colleague. The best practice is to electronically notify employees immediately when their referral is accepted/rejected, if the candidate is invited for an interview and when the candidate is finally hired or rejected.
  3. Provide periodic feedback to applicants – prospects who have been referred are also frequently nervous about their chances. At the very least they should be electronically notified that there referral has been received and accepted. These notifications can also include an overview of what they can expect, including the steps in the process, frequently asked questions, and the likely timeframe before any decision is made.
  4. Offer an online chat feature with employees – one of the best ways to reach busy and hesitant employees with questions about the ERP is through an online chat feature (Aricent).
  5. Develop and use referral champions – a powerful way to inspire employees to refer is to use senior leaders as referral champions. These executive champions should participate in communications and help to explain to employees the importance to the business of the positions being recruited for (Accenture).
  6. Consider a follow-up meeting after a great referral – after a great referral, schedule a follow-up meeting with the person. Goals include to hand-deliver the bonus, to thank them (and their manager), to identify and then learn from their approach, and to ask them if they know any other stars. (Amazon).
  7. Provide direct feedback to employees on weak referrals — make sure that you provide feedback to individual employees who make weak referrals, so that they know what they did wrong and how to improve.
  8. Keep top referral rejects interested – top referrals who were not hired because they lost out to an exceptional candidate should be kept for consideration of future openings. Your goal should be to develop a pool of these potential “future hires” and to build a long-term relationship with them by continually communicating through periodic messages or an e-newsletter. Also “push” future relevant jobs to them. In order to keep them excited, consider telling all A+ rated referrals who were not hired what specifically they could do to improve their chances.
  9. 24/7 help desk – large firms with a high volume of referrals can open 24×7 referral help desks to provide information and to answer questions, much like a concierge (Tata and Aricent).

VII. Specialized referral approaches to consider

In addition to providing a broad employee referral program, it is also wise to consider implementing some specialized subprograms.

  1. Proactively approaching target employees – most referral programs communicate using a broad impersonal approach; a superior proactive approach involves recruiters seeking out individual employees who have a high likelihood of making a quality referral for a specific job. Employees and managers are usually approached on a one-to-one basis (and often in person) and are asked to provide the names of a handful of individuals who fit a targeted set of criteria. Because the approach is personal and targeted, the response rate and referral quality are significantly higher. When top performers and executives are proactively approached, frequently they are willing only to provide “names” alone, with no follow-up or resume (Google & Aricent).
  2. Boomerang referrals – this focused approach emphasizes maintaining a continuous relationship with high-quality former employees (corporate alumni) in the hopes of someday rehiring them through an employee referral. Top corporate alumni can also be asked to provide referrals (Aricent & Booz Allen).
  3. Reference referrals – this approach emphasizes approaching the top references of last year’s top hires as referral sources. They are thanked for their helpful reference and asked if they “know anyone else equally as qualified.”
  4. College hire referrals  because of their widespread usage of social media, college students are well-connected with other students in their field around the world. College referral programs have proven to produce excellent referrals for both interns and permanent hires. Last year’s graduates who you hired from key schools should also be proactively approached for names (Endeca, Aricent, & Intuit).
  5. Onboarding referrals — make it a regular part of onboarding to highlight the employee referral program and to provide new hires with a referral information kit. Also make them aware that you have a recruiting culture and that they are expected to continually provide referrals. Each new hire should be asked to immediately provide top referrals from their former firm. (Aricent & Eli Lily).
  6. Referrals for executive positions – because corporate executives are highly visible and accessible in today’s world of social networks, vacant executive positions should also be filled through referrals. In order to be successful, the executive referrals component requires an extremely high level of customer service and candidate experience. These “choose-your-own-leader” type programs can empower employees to get better leaders (Aricent).
  7. Internal movement referrals – employee referrals can also be an effective tool for improving internal movement. Employees need to be rewarded for making successful referrals for key internal openings and managers must be rewarded for “releasing talent.” An internal recruiting team may also be used to speed up internal placements (Booz Allen, Sodexo, & Microsoft).
  8. Offer letter referrals – this extremely aggressive program requires you to ask potential new hires to provide referrals as a condition for becoming an employee (FirstMerit).

VIII. Referral program technology

Globalization of referrals and the requirement for fast processing of applications mandate that programs use the latest in technology, which in this field advances by leaps and bounds.

  1. Allow employees to submit using multiple platforms – provide your employees with multiple options for submitting referrals (web, email, phone, text). Providing multiple options can make it easier for busy employees to make referrals 24/7, while they are “on the run.”
  2. Application website flexibility – the referral website should offer regular and expedited options. The first channel should provide the detailed information that first-time referrers’ need, but the second channel should be designed for experienced referrers, so that they can quickly jump directly to the referral submission page (Accenture).
  3. A website that allows employees to track the progress of their referrals – an internal site can allow employees to continually track the progress of their referrals as well as their accumulated bonuses (Accenture and Aricent).
  4. Offer referral program kiosks – because not all employees have continuous access to a computer, standalone referral kiosks often need to be strategically placed around the facility. These kiosks can be used to input referrals and to provide information about open positions. They can include advice, frequently asked questions, and a calendar of upcoming referral events (Aricent).
  5. Online assessment tools – develop and offer online assessment tools so that the skills of referral candidates can be quickly assessed. Also, consider another option of offering tools that allow the prospects to self-assess themselves before they agree to become a referral.
  6. Online interview scheduling – develop a website that allows referrals who have been chosen for interviews to self-scheduling their own interview times (Alaska Airlines).

IX. Process management and the administrative aspects of referral programs

The effective administration of the ERP is an extremely important component for producing great referrals.

  1. Proactively discourage weak referrals – help to avoid a clogged referral queue by developing a process that discourages “junk referrals.” Discourage your employees from referring their relatives, and strangers who “approach them.” In order to ensure that your employees are screening out weak prospects, require employees to thoroughly know and assess their referral’s work, their skills, their interest in the job, and their cultural fit. You can also require employees to rate their knowledge of their candidates on a 1 to 5 scale. Requiring this level of knowledge and assessment helps to make the employee own the quality of their referral, and it minimizes the wasting of hiring managers and recruiters time on weak referrals (Agilent & Aricent).
  2. Establish referral targets for managers – managers and teams produce a higher percentage of referrals when they are provided up front with specific referral targets or goals for each quarter. Also rank managers from best to worst on their ERP performance (Aricent & Acumen Solutions).
  3. Encourage internal competition – offering rewards for early-bird referrals (i.e. the first submitted) can foster competition and encourage employees to respond quickly. Holding contests between rival business ynits can also foster a competitive mindset around producing referrals. An employee scorecard that lists the employee’s personal referral success rate allows employees to continually track the progress of their referrals as well is accumulated bonuses. One organization sends their iRefer dashboard to all employees to encourage competition and to allow employees to contact top referrers for advice (Tata Consultancy & Aricent).
  4. Continually monitor referral vendors – maintain continuous awareness of the services offered by the numerous established and emerging vendors in the referral area. Even if you don’t use them, be aware of the concepts, the technologies, and the outsourcing options that are emerging in this area.
  5. You need dedicated program staff and recruiters – the best programs develop a referral team and assign responsive recruiters to specialize in referrals (Owens Corning, Microsoft, & Amazon)
  6. Develop an SLA – you can increase the responsiveness of line managers by instituting service-level agreements that spell out expectations for both managers and the ERP program staff (Aricent & Tata Consultancy).
  7. Develop a best practice sharing process – periodically survey or interview both new hires from referrals and employees (with successful and failed referrals) in order to identify what worked and what didn’t. Develop a formal process (i.e.  a Wiki, listserv, Facebook page, Twitter feed, or online forum) that allows employees to ask questions and to easily post and share best practices for finding prospects, building relationships, and selling prospects.
  8. Monitor progress and continually improve using metrics –periodically assess the satisfaction of employees, hiring managers, and individuals who were referred. Other key metrics that should be tracked include new-hire job performance, new-hire retention, boomerang rehires, offer acceptance ratio, diversity referrals, and referrals as a percentage of all hires (Aricent & Accenture).

Some Benchmark ERP Milestones

Some “best in the world” metrics to compare yourself to include:

  • Participation rate (% of employees with at least one referral): 71% -Aricent
  • Percentage of all hires from referrals (with a bonus): 78% -AmTrust
  • Percentage of all hires from referrals (without paying a bonus): 70% -AmTrust
  • Employee satisfaction rate: 98% -Aricent
  • Percent of boomerang rehires through referrals: 72% -Aricent
  • Most globalized ERP: operates in 40 countries -Microsoft

Referral Program Killers To Avoid

If you expect great results, in addition to providing some of the above-advanced features and best practices, you must consciously avoid the following 13 ERP killers:

  1. An ERP that is slow to respond to referrals and questions
  2. Delaying the reward/bonus payment for three to six months
  3. Referral spamming of employees with too many messages
  4. Failing to periodically re-energize the ERP
  5. No ATS marking of ERP applications so that you can track program effectiveness
  6. Equal rewards for all jobs
  7. No feedback on weak or bad referrals
  8. Individual recruiters are allowed to “ignore” referrals
  9. Not tracking referral rates by manager
  10. Too many rules and restrictions
  11. Not weighting referrals based on the referrer’s track record
  12. ERP applications are not given priority treatment in the recruiting process or ATS
  13. ERP program manager turnover

About Dr John Sullivan

Dr John Sullivan is an internationally known HR thought-leader from the Silicon Valley who specializes in providing bold and high business impact; strategic Talent Management solutions to large corporations.

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