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three employees happy and celebrating together
By Jeff Wach, SPHR, SHRM-SCP

BUILDING AN EFFECTIVE REFERRAL PROGRAM

 

Does your company have a referral program for new hires?

Does anyone know about it?

Is it being used?

Referrals are by far the preferred source of new hires. Your employees know the culture. They know who will be a good fit. However, having a referral program isn’t enough. It has to be effective, and people need to know about it! How do you do that?

Follow the VIP Referral Program.

V = VALUED

First, the program needs to be VALUED. A $20 gift card is not going to cut it. Think hundreds. Or thousands! How much would you normally spend to recruit a quality employee? How much is a headhunter fee? Why not give that money to your employees? A referral program needs to be worth the effort. Use it as another benefit and incentive. And don’t be afraid to increase the amount for more difficult, hard-to-find positions.

I = INCREMENTAL

Second, your program needs to be INCREMENTAL. You want to reward quality and longevity, not just new hires. Consider starting with $100 upon hiring and $400 after 6 months of employment. Maybe another $500 at the end of a year. Get creative.

P = PUBLIC

Third, to get the most bang for your buck, it should be given in PUBLIC. If possible, IN CASH. I know, the accountants will want it in a check or just added to the person’s paycheck. But that misses the opportunity to communicate and advertise. No one reads. No one pays attention to the hundreds of emails HR has sent out to explain your referral bonus in the past.

Try something different. At a company-wide meeting, after introducing everyone to the new employee, call up the person who referred them and pay out the bonus IN CASH right there in front of the whole team! I guarantee you will get people’s attention! Make it clear to everyone that the program actually pays.

There you have it. The VIP Referral Program. Valued, Incremental, and Public.

How does your program measure up? Contact us today to set up a proper referral program.