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5 Tips to Building an Employee Referral Program

Posted By Yaniv Masjedi On March 2, 2014 @ 3:00 pm In Employment | 6 Comments

employee referral program

As a business owner, your employees are your most important customers. Without engaged, passionate staffers, a business will struggle to succeed. Therefore, it is vitally important to attract only the best when it comes to talent. Any efforts you put in to assemble an effective team will pay off in returning customers later on.

The best way to build a stable of rock star employees is with a strategic employee referral program, or ERP. Below are a few things to consider when building your initiative.

Building an Employee Referral Program

Offer a Juicy Incentive

By participating in a referral program, your employees are basically recruiting for you. Make this effort worth the time by offering incentives. Money is always appreciated (maybe $500 for an entry-level hire that stays at least six months; $1,000 for a senior-level hire). If you are low on funds, consider offering paid days off, free lunches or even work-related rewards visible to other employees.

For example, if the referrer has long complained about feeling uncomfortable in his or her desk chair, spring for a new one of the Herman Miller variety. Not only will your referring employee feel pampered, but the daily presence of the swanky chair will entice other employees to bring their best talent forward, too.

Another idea is to offer raffle prizes. Maybe compile the names of all referring employees and pull out one name per quarter. Offer that person a huge prize (maybe a trip to Vegas, if your budget allows) and watch as you receive an influx of referrals the following quarter.

Build a Sense of Urgency

If more than 50 percent of your business happens around the holidays, convey to your best employees a sense of urgency in connecting with seasonal hires and offer an incentive with an expiration date.

Make it Easy to Refer

The easier it is for an employee to refer, the more referrals you’re going to get. Forget written referral forms. Instead, create an email address specific to referrals to help you keep track of them.

Take Every Referral Seriously

It’s easy to empathize with the employee who refers his or her best friend only to never hear back about the status of the application. Don’t do this to your employees.

Regardless if you hire the candidate or not, take every referral seriously and, at the very least, follow-up with your employee on why you did or did not feel that the referral was a good fit for the company.

Promote Your ERP

Make it fun. Pass out t-shirts with your company logo and “We’re hiring!” printed on the back. Host an ERP launch party in your office, or better yet, in a local bar and tell your employees to invite their friends (ahem, future candidates). Hang posters on the walls of your office that promote the program.

Now watch the referrals roll in.

Introduction [1] Photo via Shutterstock


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