How To Set Up An Employee Referral Program: 6 Steps to Success

Guest Post
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employee referral program

So, you’re thinking about setting up an employee referral program? Great! Awesome hires come from a variety of places, but one of the most overlooked places is from your network. Your network includes not only your direct connections, but also your employees' connections, and even their connection’s connections. But, it can be more difficult than just asking your employees to recommend someone they know for an open position.

Google knows that this can be a tricky problem to solve, and they wanted to figure out a solution. What they realized was that financial incentives had nothing to do with how successful their referral program was. They doubled their reward from $2,000 to $4,000 and nothing changed. So what does make an employee referral program successful? Here are 6 easy steps to ensure you get the opportunity to hire some top talent.

The 6 Steps To Creating An Employee Referral Program

  1. Decide what your overall goal is

Of course, you want to make the hiring process easier, and get more skilled candidates, but who are you going after? Define specific and measurable goals for your referral program. You may be interested in diversifying your referrals. Or maybe looking to get more referrals from a specific area of the company, such as sales. Once you’ve decided on a goal, get specific about it. For example, say right now you have 5% of referred candidates coming from Marketing, but you’d like to get it up to 15%.

  1. Create a user-friendly experience

The fewer hoops an employee has to jump through to refer someone, the better. Referrals essentially make your life easier, so it should be easier for those putting in the recommendation as well. The best-case scenario is that an employee just has to provide the recruiting team with a name and a way to contact them. The recruiting team would take it from there.

  1. Train your employees

Training should touch on 3 things:

  1. How to use the system
  2. What your company is looking for as far as candidates go
  3. What employees can expect when they refer a candidate
  1. Keep your employees informed

Google found this to be the most important step when it came to implementing a successful program. While doubling the financial incentive didn’t help, using a more focused approach did. Laszlo Bock, who is the Senior Vice President of People Operations at Google says, “Breaking down a huge question (“Do you know anyone we should hire?) into lots of small, manageable ones (“Do you know anyone who would be a good salesperson in New York?”) garnered us more, higher-quality referrals”. Make sure your employees know which positions you’re looking to hire for. This makes it easy for them to figure out who would be a good fit.

  1. Allow for a transparent process

This relates back to the third step of step 3, “what employees can expect when they refer a candidate”. Create a program that lets the refer know which stage of the process their referral is it. Keep an open line of communication with your employee so that they don’t feel that their referral just enters a black hole and is never sure if they were taken seriously or not.

  1. Measure the success

This can depend upon your goal, but some good metrics to track are:

  • The percent of hires who came from referrals
  • The percentage of referred candidates who hear from your company
  • The percentage of “qualified” referrals
  • Your workforce’s participation rate in the referral program
  • The quality-of-hire of referred hires

Here at Drafted, we believe that referrals are the key to success.

About Drafted

At Drafted, we believe that your company network is your single biggest competitive advantage when it comes to hiring. Our mission is to make it easy for you to leverage your network in the hiring process to find the best candidates. Your network is already powerful, it’s just too much work to make it a priority over the day-to-day of recruiting. Companies that use Drafted see their employee referral numbers go up by 2x, their time to hire drop by 30% and their overall hiring efficiency increase significantly within just a few months.