Turn to Your Current Team For New Hire Success

Employee Referral Program

Online searches are not the only recruitment method, and they may not be the best way to attract new compatible team members. I recently read an interesting LinkedIn Article about how Amazon uses its vast employee base to recruit new hires using a formalized system. This is probably good news, considering that they’re about to hire thousands of employees for at least one new headquarter location.

Your small business can’t afford the time to follow a highly-structured recruitment program; but, your employees can still help you with the hiring process. Here are some ideas that might encourage your team members to add recruitment to their job descriptions.

Recruitment by Employees Benefits Everyone

It’s no surprise that your employees will enjoy working with familiar people whom they like and respect. There are many reasons why your entire business can benefit, as well. Consider the following:

  • Instant expansion of your network: You probably already turn to your professional network for employee referrals. Even if you only have one employee, consider that your relationship resources might double, and it continues to expand with each new person added to your staff.
  • Targeted knowledge of hiring needs: Job boards use keywords to help you identify recruits who have particular skill sets, but your current employees can bring in applicants who can do the job while best matching your company’s culture. Personalities make a difference in small, close-knit teams.
  • Ease of onboarding: The first days of employment are very stressful for new hires. Those who know at least one member of your team start work with a greater comfort level.
  • Motivating rewards: As you’re about to learn, there are many ways to encourage team members to recommend applicants beyond the often-expensive signing bonuses that huge companies offer to their employees.

Are there any downsides? Naturally, it’s possible that close friends could spend too much chat time or otherwise disrupt productivity. Still, close friendships form within any business. As the head honcho, you need to learn methods to tone down water cooler time.

How to Build an Effective Employee Referral Program

Many businesses develop formal employee referral programs. The most successful systems are easy to understand and implement, with attributes like the following:

Clearly-defined job descriptions and requirements

This is always the first step. If you want to ensure that your team members bring in qualified candidates, then provide them with a good definition of your needs. If you don’t know how to write good job descriptions, review any recognized job board to examine the level of detail used in their listings. If you absolutely want candidates with specific educational levels or other skills, be sure to highlight those must-haves.


Most programs provide referral benefits after a new-hire remains on-the-job for a probationary period, typically 90 days. If you have a tight budget, there are other creative reward options. Anything from extra vacation time to sincere recognition in the form of dinner at a fancy restaurant can bring results.

Consistent rules

Every Employee Benefits program operates under a set of rules, and referral programs are no exception. The rules don’t have to be the same for everyone, but they should be fair across the board to prevent you from facing complaints (or even potential lawsuits). Just as important, no one should find them confusing. Make sure that you explain every possible consideration. The following items are essential:

  • Who qualifies for referral bonuses: Perhaps your program only applies to hourly workers. Or, it may include salaried employees, perhaps falling short of individuals at the top executive level.
  • Award value: If it’s a monetary award, you can specify a specific dollar amount. If it’s a non-monetary gift or other form of reward, you might want to specify a minimum value.
  • Timing: When do employees qualify for an award? It might be after the new hire successfully completes a defined probationary period (most common). Or, it may be the case that all or a portion might be awarded on the new hire’s first day.

Think of everything, write it all down, and ask a few people to review it. If they have concerns or too many questions, go back to the drawing board until it’s crystal clear.

Frequent reminders

I just read about a company that offered a motorbike reward. It was parked in front of the headquarters to serve as a very effective and creative reminder of the employee referral program. You don’t have to do anything as spectacular, but you do need to regularly remind your team that they can benefit by recommending friends and associates to your company.

Participant updates

Once employees offer referrals, keep them informed about the status. Are they still in the running? Did they accept an offer? Of course let them know that you haven’t forgotten as award time nears.

The Benefits Outweigh the Costs of Employee Referral Programs

If you think that you don’t have the time or money to run a successful employee referral program, think again. Recent statistics indicate that the cost of advertising and agency assistance is significantly higher than the price of typical hiring bonuses. Additionally, the average hiring process is quicker. Career portal hires generally take about 55 days, and job posts take about 39 days. Candidates brought in from referral programs generally get started in about 29 days.

Referred employees typically stay longer with the company, as well. About 47 percent of employees brought in via referral programs remain with the company for over three years. Only about 14 percent of employees brought in from job boards stay that long.

So, you can afford such a program. It saves money and potentially improves productivity in innumerable ways. A well-designed system can turn out to be a virtual money-maker that helps you attract the talent that you need.

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