Employee referral programs or incentives are a common theme these days.
Some are successful, and others are not. Few people ever dig deep enough into them, though, to truly understand why their program is successful or not. Typically, if the program is successful, the company just enjoys the successful recruitment avenue. If they are not successful, most companies either throw more money at them or just abandon the program altogether. Either way, it’s critical to understand why a referral program is working or not, as the story tends to tell quite a bit about the organization at the ground level.
At Incept, we have found employee referrals are critical to our growth and recruitment success. This is true for several reasons. Referred employees are typically higher performers, have better attendance, and stay with the company longer – thus reducing our cost per graduating employee. In addition, employee referrals have a positive impact on morale. As documented in multiple polls conducted by Gallup, having a best friend at work increases employee satisfaction and morale.
We all know increased satisfaction and morale lead to increased productivity, and increased productivity leads to increased profits. Sounds like a winning combination right? At Incept, we have found employee referrals to be the most cost-effective channel for recruitment. Despite the large payout that a current employee receives for bringing a friend to Incept, this channel still remains one of the lowest cost per acquisition methods we use.
The referred candidate already knows about the company and the job, but the best part is they know about it and understand it from the perspective a person that is in the same role they will soon be in. They get the unfiltered story about our management team, our Conversational Marketing Experts (CMEs), our policies, the type of work that will be expected each day, the way they can expect to be treated, and how they will feel each day when their shift is over. For us, at Incept, these things are awesome motivators for a new candidate to choose Incept over one of the many competitive contact centers in our area!
I can go on and on about the benefits of an employee referral program, but if you are having success with one you likely already know about most of them. What you really need to know is this: if your program is NOT working, then why?
As much as we would all love to believe that it’s all about the money, the simple fact of the matter is it’s not all about the money. If you are attempting to build a full staff of productive employees and your only hook is compensation, you will likely end up paying a lot of money per hour to people for very short periods of time! Instead of investing all of that money in signing bonuses and higher-than-standard wages, invest some of those dollars in a basic health check on your current staff.
Find out if they are happy. Do they enjoy the work they do each day? Does it make them feel fulfilled? Do they feel like they are part of something bigger than themselves? Do they understand what your company’s mission is? Do they know why their job is important? How do they feel about their managers? Do they feel as if they have all the tools necessary to do a good job every day? Do they feel like anyone at your company cares about them as a person? Do they feel like there is room for advancement or any benefit to achieving their maximum potential in their current position? The questions could go on and on, but the point is simple: if your organization is not healthy, no matter what you do with your employee referral program, it will never show the success you need from it.
Once you have done your health check, spent the necessary time to make the adjustments you find are necessary, and invested in your current staff, you will find that your employee referral program begins to work. You will also find that you can likely spend less money on your referral program and net even better results from it. When your employees are happy and believe in your company, they are eager to recruit new employees for you. After all, who doesn’t want to help out a friend with a great job? Now it’s up to you to turn your company into a place that is considered great.