How to Improve Your Employee Referral Program

Author

Joe Atkinson
February 01, 2024

This week I’ve been learning about referral programs; how to launch them and how to increase adoption with an existing employee referral program.

This recruiting wisdom comes from Ana Stanica, who who has successfully launched referral programs at Voi and SumUp.

Out of all the learnings, here’s 3 considerations around managing a good referral program I found interesting.

1. Consider the impact on diversity

Employee referrals usually reduce cost per hire and increase quality of hire and are therefore generally seen as a win-win.

One consideration when going all-in on referrals, especially as a smaller company, is that is likely to create a more homogeneous than diverse group of employees.

Ana suggested some extra steps to take here, one is to encourage social referrals (e.g people you meet at events / when networking) as well as personal referrals.

There are also some useful suggestions in this Harvard Business Review article.

2. When you ask makes a huge difference

Asking for referrals during onboarding makes a big impact.

Referrals is the source of hire for over 50% of roles at PURE.

They attribute this to asking every employee if they can refer someone within their first 30 days at the company when they are highly engaged.

The longer you wait the lower the adoption…

3. Referrals are correlated with employee engagement

You can invest time, effort and resources into building a word-class employee referral program but if your employee engagement scores are low, referral rates will be too.

A prerequisite to launching or promoting the scheme would be initiatives to improve employee engagement / NPS.

An introduction on this from Indeed here.

Interesting in how to build a referral program from scratch or improve your existing scheme? Become a Purpl user here.

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