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At RIVS, we help recruiters improve the quality and speed of their hiring process through digital interviews, and we’ve noticed that our most successful clients use employee referral programs as a key facet of their hiring pipeline. The reason is intuitive: great employees know great candidates.

And yet, despite all of the intuitive reasons why employee referrals should be a big win for just about every company, we only see it used successfully at a few. The reason, we think, is that although many employers have a formalized incentive program for referrals, it’s easy to miss some key points that make the process viable.

Here are our thoughts on what makes employee referral programs really work on a scale that impacts your talent pipeline.

#1: Expedited Interview Action

If an employee gives a referral and the company doesn’t interview (or at least screen) the candidate within a week or two, do you think the employee will offer another referral soon? We doubt it.

The reason is simple: the employee is spending social capital on both sides, and a let-down this early in the process can be embarrassing. Suppose an employee refers a longtime acquaintance, and tells the acquaintance of the referral (you can discourage this but it’s highly likely to occur). If the referral doesn’t lead to at least a screening call, the acquaintance and the employee are both left in an odd spot.

Leave an employee in an uncomfortable situation like this, and you can bet that the flow of referrals will grind to a halt.

#2: Public Recognition at Offer Acceptance Time

We wouldn’t advise paying out a referral incentive at the time of offer acceptance — you really should pay out the full incentive after some period of time following the beginning of employment (perhaps 3 months). However, it’s crucial that you do something to recognize and thank the referrer at the time of offer acceptance, even if that recognition is not of great monetary value.

How about a simple tchotchke that contains the company’s brand and just the words “Thank You”, something small enough that folks who have done several referrals will have a growing pile on their desk? It sure wouldn’t hurt to walk by a respected colleague’s desk and be reminded visually that employee referral is valued.

#3: Timely Recognition at Incentive Time

Most companies with an employee referral program pay a monetary incentive after 3-6 months following the candidate’s hire date, presuming the candidate remains an employee in good standing by the end of that time period.

But, here’s where it goes wrong. Usually the payroll team administers this bonus in a fairly mechanical fashion. Requirements met? Referral fee paid.

That definitely fulfills the obligation, but it misses the opportunity for the hiring manager of the new employee, to go in-person to the referrer and say “thank you.” Better yet, perhaps the tradition should be for the hiring manager to take both the referrer and the employee out to lunch to celebrate the win-win-win!

Employee Referral Wrap-Up

The place where most employee referral programs go wrong, isn’t in the letter of the law of how the program is structured. The place that the programs go wrong, is when they are implemented mechanically without the easy win of pairing the program’s steps with all of the “feel good” that should rightfully be associated with it. Try the above three steps and let us know what you think! And, as those referrals start to flow in, bring them through a modernized digital interview process with RIVS!

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