| 10 August, 2020 | 8 Min Read

What is an employee referral program? 9 successful examples

Running a successful business necessitates the right set of employees. While there are numerous ways to acquire the right candidate, employee referrals have been awarded the 'most preferred method. Get on the bandwagon, if you haven’t already, and save yourself some time, money, and effort.

As a company, if you are not leveraging the potential of an employee referral program, you are missing out on many potential candidates. Worse, you are failing to create an engaged workplace. If this doesn’t bother you, here’s an eye-opener for you - unengaged employees are partially accountable for the downfall of a company.

It’s time to adopt referral hiring that has proven to have better ROI, reduce time-to-hire and cost-per-hire.

88% of employers believe that referrals are the number one source to acquire above-average applicants.

If you are looking for ways to set up successful referral programs in your hiring process, we’ve got you covered. Below are successful tips, strategies, and employee referral program examples that have worked for huge companies and can work for you too!

What is the employee referral program?

An employee referral program is an internal recruitment strategy. It is a structured program through which an existing employee recommends a candidate, most likely a friend or a relative, for an open position within the company.

To boost participation and engagement, companies leverage referral rewards that give employees an extra push. While some companies only incentivize employees bringing in successful referrals, others reward every employee - regardless of whether their recommended candidates were hired or not.

Employee referral program: Why are they a game-changer?

  • Faster turnaround time: Traditional hiring method usually takes 39 days to fill a position. By implementing a structured employee referral program, you could cut your hiring time down to 29 days
  • Light on the pocket: Having referral programs eliminates the need for hiring managers to spend on advertising to ‘push’ openings because employees will be doing it for them. This is a recruitment strategy that ‘pulls’ the right fit into your hiring funnel and not the other way around. No advertising means less recruiting costs.
  • Engagement-driven: When you encourage employees to refer potential candidates, a high level of trust and compatibility is developed. This results in a happy and engaged workforce because the referred candidates will most likely share the same value as your employees and the organization as a whole.
  • Retention rate will rise: Employees hired via referrals stay longer in an organization than those employed through traditional methods. According to a study, 50% of referrals will stay at their job for more than three years, while non-referral hires stay for less than two years. Additionally, employers who use referrals have a 46% retention rate.
  • ROI is quick and easy: More than 80% of employers rated employee referrals better than other recruiting sources regarding return on investment (ROI). An employee hired via referral is a better fit for the job than a non-referral hire.

How to start an employee referral program

While creating a brilliant employee referral program, keep an eye out for these factors. Ideally, here are the steps you can follow; however, you must alter these factors depending on your company.

  • Strategy is vital: All the successful employee referral program examples started out with a solid action plan. So, having a recruitment strategy that prioritizes and encourages employee referrals is necessary to avoid a fallout.
  • Create an irresistible offer: there must be an offer that is tempting enough to encourage employees to go out of their way to help the company. This is the crucial factor that will determine the success of your referral rate.
  • Make everything transparent: To avoid any confusion, create a guideline that employees can refer to anytime they want to understand the referral program. This will help set the record straight and make the employees aware of the benefits, terms & conditions, and other things.
  • Keep everyone in the loop: For referral programs to be a success, make sure that your employees know about the program and how it functions. Be flexible in providing them with more information and answers if required.
  • Track the results: After having a planned out strategy, it’s time to find a way that helps you track the progress of your program. An HR software is an excellent place to start with as it will help you track, analyze your hiring sources and see what's working and what's not.

Grove HR - Infographic - How to start an employee referral program

9 inspiring employee referral program examples

1. Accenture - Get referred 

Accenture runs one of the most unique referral programs for employees. The professional service company targets its referral program at candidates. It allows candidates to join their “Get Referred!” program by first asking them to connect their social media account (preferable Facebook and LinkedIn) to the company website. This site scans their profile and comes up with a list of current employees that candidates know. The employee will then serve as a referral to the candidate.

The approach aids the quick assimilation of new hires into the organization as it engages them from when they are just candidates.

2. Intel - Double bonus leads to diversity

Companies looking to solve their employee diversity problem may adopt the Intel employee referral program strategy. The company looking for a creative solution to its lack of a diverse workforce decided to award double referral bonuses to employees that refer to a female, minority, or veteran candidate. This makes the referral bonus $4,000–twice the amount that Intel usually grants.

3. Salesforce - Happy hours

Many companies rightfully use orientation and other similar programs to introduce new hires to their workplace. However, Salesforce, the cloud-based software company took their referral program strategy a notch higher by doing something similar for their referred candidates.

The company organizes a get-together where employees invite friends or families they want to refer. The event, called recruitment happy hours, serves as a form of an informal introduction to the workplace and puts candidates at ease as they get to meet the company’s recruiters for the first time.

Another example companies can learn from the Salesforce employee referral program is the reward system. The company offers thoughtful gifts to every employee that refers to a candidate, regardless of the hiring outcome. Overall, the Salesforce approach has been deemed successful as more than 50% of new hires come from current employee referrals.

4. PURE - Cut right to the chase

PURE, an American insurance company, has a remarkable amount of success with its employee program as they have acquired between 40% and 60% of employees via referrals. The reason for such a huge success is their ‘Don’t waste time’ approach.

While onboarding new hires, recruiters ask them whether they know somebody with the skills and expertise to fit the organization. With such a real-time and on-the-spot approach, the PURE HR team gathers many recommendations in a short period of time.

5. Hewlett Packard - Public recognition

Praising your employees is one of the great ways to get the best out of them. Hewlett Packard knows this and integrated the idea into its employee referral program by publicly recognizing employees who bring successful hire. Showing appreciation publicly to its employees makes them role models for other employees and motivates them to do better.

6. Google - Ask questions

Simple and to-the-point are the two words we can think of when seeing Google’s referral program. Using aided recall, recruiters at google ask employees some basic questions like ‘Who’s the best product person you know?’

In such an approach with direct questions, employees who refer candidates are usually a good fit because employees are pushed to think harder.

7. InMobi - Experiential awards

In their search to find good engineering managers, InMobi faced many hurdles while using the traditional approach. The company parked a Royal Enfield bike at its Indian office and a Vespa in US offices at the entrance to shake things up. The HR team at InMobi made all these efforts to encourage employees into the referral program.

Employees at InMobi had the choice to pick between a brand-new bike and a vacation to Bali for every successful referral that got hired. This is an unusual approach, but for a 900-person organization, InMobi's referral rate increased from 20% to 50%.

8. Distillery - Special rewards

What do your employees really want as a reward for their referral?

Financial incentives may not be the right answer all the time. This is why Distillery, a software development company, chooses to reward its software developers for successful hires with the latest iPhones or Apple Watches. The organization discovered that these new gadgets are difficult to get around and hence are valued more than money rewards by their employees.

The lesson here is that companies should try to figure out suitable rewards for their type of employees that can serve as better incentives than money.

10. DigitalOcean - Charity donation

At DigitalOcean, the team takes a social good approach in terms of internal referral. For every successful referral hire, the company pays the referring employee a certain amount and donates another amount on behalf of the employee to a charity organization. This has helped the company attract top talents as 40% of their new hires come from referrals.

Focusing on both individual good and social commitment, this approach will make your employees feel good about themselves as they are helping a friend get a job and contributing their part to the community.

It's not one-size-fits-all

As we saw from the employee referral program examples, every company had a different referral bonus that fitted well with their employee. So, while creating your very own employee referral program, make sure to find out what motivates and inspires your employees.

Trials and errors are parts of the process to find the most effective referral program for your company. By testing different methods, you will find the right approach that fits and should be adopted by your company!

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