Employee referrals are an important source of quality candidates, often resulting in faster hires, improved employee retention levels and higher profitability. While this might seem like common sense, employee referral schemes are typically under-invested in when compared to other sourcing channels. They can also offer financial savings compared to hiring through a traditional recruitment agency.

For companies that are serious about building a competitive advantage, here are our top 10 employee referral scheme best practices:

1. Pay bonuses early. Paying bonuses for successful referrals six months after a candidate starts work is bad practice. If you’re worried about hiring the wrong people, fix your selection process and don’t hold your employees hostage by poor HR practices.
2. Communicate. Employee referrals shouldn’t disappear into the black hole of HR. This results in lost credibility with your employees and your referral. Slow responses also suggest your organisation isn’t serious about attracting or hiring the best talent – which impacts your employer brand.
3. Build a brand. Put on your employment marketing hat or partner with your marketing team. Consider running 2-3 campaigns throughout the year and branding your employee referral scheme through various internal communication channels.
4. Make a big splash when you successfully hire a referral. There’s no better time to encourage more referrals with your new employees. Be creative and make it an engaging experience.
5. Engage leadership. Your leaders play an important role in setting the tone for referrals. Attend their team meetings and highlight successes. Which leader’s team is generating the most referral activity? The most hires? Build excitement and teamwork by having contests and rewarding great results.
6. KISS. Keep it simple, stupid. Don’t make it complicated or time consuming. Submitting an employee referral must be a straightforward process. Set clear expectations at the outset so all parties know exactly what to expect and when – then stick to it.
7. Consider other employee incentives. It’s not always about the cash incentives. Think outside the box and consider other perks like free gym memberships, or extra annual leave days. These alternative perks will likely keep your employees happier and healthier.
8. Always accept referrals. Don’t just accept referrals when you’re in hiring mode. Always be prepared to accept a referral regardless of whether you have a vacancy. It keeps your employees on constant alert for talent.
9. Feedback. Employees won’t always get it right without guidance. Provide feedback on the strengths and weaknesses of referrals. Help your employees to help you by communicating your thoughts on their referrals clearly and constructively.
10. Every employee is a recruiter. For employees to participate in the referral scheme, they need to be kept in the loop and treated as recruiters. They need to know what positions are open, the kind of talent you’re seeking and which skills and backgrounds are the most important for each role.

If you would like to discuss how Ortolan People can help you implement or refine your employee referral scheme, contact us on 020 3743 0600 or email info@ortolan.com.