Monday, January 7, 2013

How to Ruin Your Employee Referral Program

According to CareerXroads, 28% of external hires in 2011 were referrals, and that number gets even larger when you factor in internal referrals. An employee referral program is a fantastic way to find talent that fits your culture while strengthening your employer brand with your current workers. It decreases cost per hire, time to hire, and turnover.

But just as there are many ways to create an effective ERP, there are plenty of ways to screw it up. Here are the most popular ones – make sure you avoid them.

Forget about it.
We’ve all seen this happen to company initiatives. Management makes a big announcement, holds a splashy launch event, and then…nothing. No reminders, no follow-ups, no mention of a deadline. No one announces the winners – if there are any. Eventually, the program dies a quiet death. To avoid this pitfall, give the program a catchy name with a slogan that reflects your employer brand (like we did for Kaplan, below). Announce winners and new hires as soon as possible, and give regular reminders to employees. Some workers respond to scorecards and leaderboards, which can be real or virtual.

Facebook ad that Brandemix created for Kaplan's ERP
Don’t help employees.
It’s not enough to just tell your workers, “Go talk to your friends!” You have to give them support. Create badges they can post on their Facebook pages, provide short links to use on Twitter, and give them YouTube videos they can send in an email. You can even give them actual cards or certificates to hand out; they’ll feel like Santa Claus. Guarantee interviews for all referrals, so employees know their friends will make the first cut. And if your careers site is boring or complicated, create a microsite just for the program

Make it complicated.
You’re asking employees to spend their free time helping you, so why make it complicated? Strict or obscure rules – like “the referral should not have worked for a competitor in the last three years” – discourage employees. Some organizations forbid managers or the entire HR department from participating, which just creates envy and dissent. And don’t make employees wait too long for their reward; how excited would you be if you had won $100…which you’ll get after the new hire has worked for 90 days and then two pay periods later?


Give pathetic rewards.
You’re saving potentially thousands of dollars on a hire, so you can give more than a $25 gift card to the employee who went and above and beyond to improve the team. Publicize the winners to through every internal channel so that other employees will want to double their efforts. If you can’t award large payouts or flashy prizes, there are plenty of low-cost alternatives, such as a premium parking space, lunch with the CEO, or extra/preferential vacation time. No matter what the prize, make the employee feel special and appreciated, which helps not only the ERP but your organization’s morale as well.

And don’t forget to promote the ERP externally, to all your brand’s fans, customers, and applicants. Also, give feedback to employees whose referrals didn’t get hired, so they’ll know what to look for in the future.

Employee referral programs turn your employees into brand ambassadors externally and generate team spirit internally. They’re cost-effective and increase the odds of creating the culture you want in your workplace. Avoid these mistakes and you’ll be well on your way – but if you need additional help, we at Brandemix are experts. And we’d love to hear from you.

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