SkillSET Blog
Advice For Pros · February 13, 2020 · AUTHOR: Udi Dorner

Employee Referral Programs: Successful Implementation and it’s Pros and Cons

Hr Process, Hr, Selection, Interview, Employee, Resume Firstly let's see how to set up a successful employee referral program : Choose when you should ask for referrals  Come to a decision when you would like to use a referral program for finding qualified candidates. Whether it's at the beginning of the hiring process or go with traditional recruiting methods like job ads. Whether to use them for every open role or only for specific positions? These questions become easier to answer once the hiring goals are set. It's also important to consider the process of hiring for a specified role. if the recruitment of candidates is faster than usual then opting for referrals right away is the best choice since it reduces the overall time for hire. Communicate actively with your employee referral program The effectiveness of an employee referral program vastly depends on the engagement of your coworkers in the process which needs to ensure that they know :

  • How to refer someone
  • Submit a referral that’s quick and easy
  • Requirements for the specific role.
  • Describing the role, profile of the ideal candidate
  • Process of submission of referrals by the employees
  • Have access and mode of contact with the referred candidates

 Have a way to motivate and reward your employees  After setting up an employee referral program, the new hiring buddies that are gained thus are known as your co-workers. But since they are busy in their work and have their tasks and projects to handle, it's not always possible for them to keep track of the referring process, this is where one needs to add incentives to the process. An employee referral bonus program can go a long way in motivating them.  Keep a track of employee referrals  To gauge the success or failure of an employee referral program, one needs to keep track and analyze some HR metrics. These are :

  • Compare the number of total referrals with the number of referrals through hiring.
  • Number of referrals per role/department
  • Comparing the turnover and retention rates for referred candidates with the rest of employees

  Advantages of Employee Referral Program 

  • It is faster in many cases where a coworker can vouch for the candidate and make sure that the person meets all the requirements. This helps in skipping the initial recruitment process.
  • Since the process is faster through the hiring stages, it naturally reduces the related expenses.
  • If you have done a good evaluation of the candidates from employee referral programs, that means the candidate already has an idea of what the company culture is like, which means they fit better to the cultural
  • While looking for hard to find skills in an intensely competitive space, one could use some extra help. This is where the coworkers can act as an extra pair of hiring buddies, who can help to identify potential candidates for hard to fill roles.

Disadvantages of Employee Referral Program

  • There is a lack of diversity since employees generally refer to candidates who are like themselves or coming from similar locality or backgrounds.
  • There is a lack of transparency at certain times.

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