In an economy where employers are vying for the best talent, it is important for companies to ramp up their recruitment strategies proactively. Over the years, strategies like posting job openings on the internet and hiring an external recruitment agency have worked. However, this standard way of sourcing talent has recently undergone a gradual shift.

Now many companies are directing their efforts on enhancing their employee referral programs (ERP). This is because employee referral programs have been cited as the number one source to hire high-quality candidates, according to a survey by Deloitte. Moreover, these programs help increase the retention rate by 46%, and referral employees are profitable by 25%.    

Employers ask for talent recommendations for open job positions from their existing employees in an employee referral program. In exchange for their suggestions, employees receive a monetary benefit or an incentive. In a nutshell, a company gets good candidates, and employees receive incentive-based rewards—a win-win situation for both the parties involved.

While these programs seem like a straightforward strategy to source good candidates, it can get challenging to introduce fresh ideas frequently. This is because the workforce constantly evolves; an idea that might have been a hit a year ago might not have the same impact now. Moreover, recruitment priorities for almost every company are bound to change frequently. To ensure an ERP can yield good results, the employer’s responsibility is to captivate employees with updated referral bonus options.

Think Beyond Money

Monetary rewards work. However, to make an ERP more interesting and engaging, employers can consider offering a bonus that matters to their employees. For example, tech companies can replace cash incentives with gadgets such as the latest iPhone, an Apple watch, a virtual reality headset, and similar options. Replacing cash with something employees are really passionate about can help strengthen their engagement in the ERP and help companies get desired referrals.

Another way to motivate employees is by offering additional paid leaves. With an 8-hour workweek, employees rarely get leisure time for themselves and their loved ones. Not everyone can afford to take a day off whenever they are burnt out. At such times, additional paid leaves can save the day.

Employers can even consider enrolling their employees in a service or course of their choice. This could include a wellness program or subscription to a learning platform. By focusing on such aspects, employees will also feel valued, and get a chance to improve their mental and physical health and strengthen their existing skillset.

However, as it’s an incentive, try to offer them a course unrelated to their job and instead focus on enhancing their passion. This will make them feel like the course adds value to their personal life, instead of just another task for work.

Take Inspiration from Existing Employee Referral Programs

A different approach could be taking inspiration from existing referral programs. For instance, Salesforce organizes Recruitment Happy Hours. This could be as fun as it sounds. Employees can decide whom they want to refer for a particular job opening and invite them over for a happy hour. This is an effective way for recruiters to get familiar with potential candidates while being candid.

Accenture is another company that doesn’t cease to amaze with its fresh ERPs. This company focuses its ERP on “doing good”; either because its employees helped their connection get a job, or helped Accenture close a job opening. It works both ways. In this program, employees can contribute a part of their referral bonus to a charity of their choice, and Accenture matches that amount.

InMobi tried a completely different method to encourage their employees for referrals. This company parked a Royal Enfield bike at its office in India and a Vespa scooter at the entrance of its US offices. Every time a referral got hired, the InMobi employee had the option of choosing the bike parked outside their office, or a trip to Bali. With the reward right in front of their employees’ eyes every day, this company increased its referral rate from 20% to 50%.

Prioritize Recognition

When employees feel valued, they are more engaged and likely to go the extra mile for their company. A survey conducted by Deloitte states that companies that focus on employee recognition have 14% higher employee engagement and productivity. The same study also states that companies see a 2% increase in margins by achieving a 15% improvement in employee engagement.

HR teams can use corporate channels like Yammer to thank an employee for their referral and share their reward. Or sending a department-wide email sharing the news of the new hire along with the employee who referred the candidate can also prove to be effective. This way, the employee feels recognized while motivating other employees to participate in the ERP.

Conclusion

While finding the right platform to source candidates is crucial, when done right, employee referral programs can help save huge costs and improve employee retention. However, there is no one-size-fits-all approach. It is essential to understand what really drives employees and how companies can help bridge that gap with ERPs. Also, companies should continuously focus on experimenting with new ideas to promote their employee referral programs.

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