Here’s How Top Companies Run Their Employee Referral Program
Need help onboarding international talent?
1. Employee referral programs are the most successful and cost-effective recruitment tool
2. Understanding the strongest elements of successful referral programs is key to building one that is tailored to your needs
3. Once a referral program is designed, it’s important to ensure its roll-out and implementation are easy and crear
LinkedIn says employee referral programs are the number one recruiting strategy to fill open positions and optimize recruitment processes. However, there are tricks and techniques that top companies use to make sure their referral programs are genuinely successful and attract top talent.
In this post, you will discover some recurrent key elements in effective employee referral programs. Use them as inspiration and as a motivator to build your own successful referral program.
What are the benefits of employee referral programs?
- High-quality candidates: Your employees will want to refer the best candidates for a chance to earn cash bonuses or referral rewards if they’re hired
- Higher employee retention rates: The employee referral process has the highest ROI of any recruitment method. Studies show that 46% of referred candidates stayed with the companies for at least one year
- Lower time to hire: It takes about 55 days to fill a vacant position through traditional hiring methods like job boards and applications. It takes about 30 days to hire via employee referral hires
- Lower cost per hire: Ditch the headhunting company’s 20% fee and pay your current employees to boost talent acquisition. A $5,000 referral bonus is a lot cheaper than 20% of a $150,000 salary
- Improved candidate experience: Having a friend or contact at the company they apply to can strongly enhance candidate experience. This is equally true for onboarding once the candidate is hired
Now that we know the core benefits of onboarding programs let’s discuss the four ways top companies run successful employee referral programs.
1. Offer competitive compensation
When a worker refers a highly qualified candidate for a role, you should reward them. That doesn’t mean you have to give away $20,000 per referral as startup Thoughtspot did in 2014. Anywhere between $250 - $10,000 is a generous amount to encourage and reward workers for referring successful hires that remain at the company after three months.
Here’s a look at some of the payouts from other incentive programs:
- Hubspot offers $10,000 to existing employees who refer successful developer applicants that work for at least four months
- Atlassian offers $10,000 to great employees who refer successful applicants
- Ubisoft offers $2,500 for director-level positions and $1,500 for lower-level positions upon hire of the referred applicant
2. Host a virtual recruiting event
Encourage workers to invite members of their professional networks to attend a virtual recruiting event to learn about open positions at your company. Events present a unique opportunity for prospects to get a sense of your company culture and meet with hiring managers, potentially increasing their odds of being hired.
Amazon hosted a virtual career day to showcase the 33,000 open positions the company had across the country. The virtual event included:
- 20,000 1:1 career coaching sessions with 1,000 Amazon recruiters
- Talks from Amazon employees, from delivery drivers to AWS specialists
- Career workshops to help potential candidates boost confidence, acquire skills and improve their job search strategy
Top tip: Use new hire onboarding sessions to introduce your employee referral program and get the ball rolling from day one.
3. Generate a buzz on social media and among your workforce
Social media competitions and point scoring systems are a fun way to encourage employee engagement in referral schemes while spreading the word about your company and growing the number of referrals you receive.
- Fiverr turned to social media to give points to employees that shared job postings and referred friends, moving them up a leaderboard
- Salesforce uses deadline-based contests, rewarding employees who submit referrals during a designated period
- Distillery rewards employees with tech gadgets like iPhones and Apple watches for recommending great candidates
- Salesforce gave away San Francisco Giants tickets to every referring employee, regardless of whether the candidate was successful
Rewards don’t have to be expensive or reserved for successful referrals. A simple $5 gift card for every referral or the chance to earn an extra day off can sometimes be all it takes.
4. Make a charitable donation on behalf of an employee
When DigitalOcean offered to make a $1,500 charitable donation on an employee’s behalf above a $3,500 referral bonus, their new employee referral program reached a 43% participation rate (4x above the industry standard).
Unlike monetary incentives that can feel self-serving, charitable donations have an altruistic component and carry greater meaning for the wider community. While philanthropic donations do good for the world, they also raise an employer’s corporate social responsibility profile when shared on social media.
Supercharge your referral program with Deel
A referral process should be simple yet effective. Your workforce needs to know how to participate and what’s in it for them. Inform team members of new job openings, streamline referral submissions, and, most importantly, make it fun.
With Referrals by Deel, your recruiting team can create automated announcements for those hard-to-fill jobs, highlight specific departments, and boost postings with the least amount of applications. All in Slack, without the need for dedicated referral software.
And when referrals start rolling in, employees can submit a referral to your applicant tracking system (ATS) with two clicks in Slack. This process lowers recruitment costs, accelerates hiring, and fills your work community with trusted new hires.
Book a demo today to start recruiting like the pros.