Got Referrals? Building & Measuring a Top-Notch Referral Program (Q&A)

If you’re not thinking about referral programs strategically, I’m here to change your mind (and offer tips!). Recently, I spoke on a webinar with Glassdoor for Employers’ Mallory Brown on 9 Steps to Building Happy Hires through a dynamic, strategic referral program. There were 50 QUESTIONS during this webinar – so while a majority of organizations have referrals programs and generally know that referrals are the number one source of hire, there is still a lot of uncertainty around how to make these programs effective and engaging.

Here are some of the top questions (a lot had similar themes) we answered.

Do referral programs adversely affect a company’s diversity strategy (I think you dropped a stat on the webinar about referral programs being the number one source of diversity hires)?

Mallory: According to Undercover Recruiter, referrals are actually the number one source of diversity hires! But there is definitely an educational component here. It’s important to make the purpose of referrals clear to employees – to attract culture adds to the organization. It’s not about attracting more of what you already have, it’s about adding new perspectives that can fuel innovation and move your business forward. To ensure you get a good mix of referred candidates, make your referral program available to all employees, regardless of department, and make sure they understand the true purpose of your program.

How do you build value with a referral program without giving monetary bonus?

M: Monetary rewards aren’t necessary if employees are clear on the purpose of referrals. People want to be surrounded by other brilliant, driven people. They also want to work at a company with vision and purpose, so connect referrals back to business objectives and how referrals can help the company move closer to realizing its goals.

If you feel incentives are necessary but have limited funds, you can also get creative by offering other types of rewards. Ideas include charitable donations or volunteer time off, extra vacation time, gift cards or movie tickets, lunch out or a pizza party for your team. At Glassdoor, employees love to dress up, so I could see an incentive to pick the theme of a dress-up day (think “pajama day”) at the office working well. It may seem silly, but many people are motivated by things that don’t involve dollars but rather drive culture or personal goals.

What are examples of ways to broaden your referral network?

M: To cast a wider net, consider asking non-employees like former colleagues, business partners and/or vendors to refer candidates. You can even reach out to former employees (your alumni), given they’ve maintained a positive relationship with your organization. Analysis from SmashFly’s 2015 Employee Referral Survey shows companies that reach beyond employees get 28% more hires from referrals and 8% better quality candidates, so this is a no-brainer.

Can you share a sample referral program or results?

Josh: One of the best from our customer group is Bright House Networks (now Charter Communications). You can get the full case study here.

In 2014, the company set out to refresh its referrals program with the goal of boosting employee engagement, generating quality referrals, and reaching a point where 30% of its entire workforce came from referrals.

After implementing SmashFly Referrals in 2014 (already a full platform SmashFly customer), the company was able to personalize its messaging with unique landing pages for specific job interests, simplify the process with mobile-friendly forms and less formal requirements, and broaden its network by expanding potential referral sponsors beyond employees — to advocates, partners, alumni, and more. The results speak for themselves: In just over a year, Bright House generated 1,923 referrals and a 152% increase in tracked referrals. Over the same time period, it saw a 24% increase in filled positions and a 48% reduction in hiring costs. Those numbers aren’t all perfectly correlated, but they’re definitely related.

What are some best practices for engaging with leadership and receiving support for a referral program?

M: If you’re making the case for a referral program, I encourage you to look at your company’s Glassdoor profile to see the percentage of employees who would recommend your company to a friend. If the number is above 50%, that’s a good key indicator that employees are ready and willing to advocate for your brand.

Another tip: back it up with data and tie referrals back to the bottom line. Referrals are a proven channel for producing high-quality candidates, which can cut down your time- and cost-to-hire, as well as your time-to-find, significantly. Send leaders and hiring managers referral statistics and updates on your program regularly so they understand the impact your program is having on hiring and the bottom line.

How would you track referral success?

J: I think this a two-part answer. The first part is that it’s important for a company to define what success means to them. Is it ‘X’ number of more referrals? A higher volume of diversity applicants? An increase in pipeline for a specific job category? The goal or KPI could be any number of things, but it’s important to know what you’re driving toward in order to successfully measure against that objective.

The second part is the actual mechanics of measurement. And (big shock here) I think that’s best left to technology that’s able to track your referral program and process from the very step to the very last. This can be done without technology, of course. But it requires a lot of manual work and disparate systems (spreadsheets, tracking links, landing pages, etc.) that may or may not capture data accurately. When that’s the case, it can be very difficult to track activity and evaluate “success,” especially compared to the other strategies you’re spending resources and budget on. With technology like a Recruitment Marketing Platform, your referral program and processes can be automated and managed under one roof alongside every other recruiting effort, which ultimately results in clear line of sight into whether your program is delivering on your goals.

To help lower the volume of unqualified referral submissions, do you have a suggestion on how companies should market their referral program’s mission?

M: Be upfront and clear about what you’re looking for (need-to-have hard and soft skills) and how you’re measuring candidates for each role. The more employees know, the more equipped they will be to refer the right people. Also make sure you’re closing the loop with employees who have referred unqualified candidates so they know what to look for in the future. Employees who refer great people are great assets – and making sure they feel valued and communicated with is important to fuel their advocacy and efforts.

Keep in mind that just because a referred candidate isn’t the right fit now, it doesn’t mean you shouldn’t maintain a relationship with them for the future. For instance, someone who is nascent in their career may apply for a role they’re too junior for, but down the road they may be a great fit for a different opportunity. Make sure you’re nurturing candidates to stay in touch. In effect, you’ll be filling your pipeline with great talent for the future.

What is the name of the GE campaign you mentioned? How can we find it?

J: The campaign doesn’t have a specific name that I’m aware of, but it features Millie Dresselhaus, and it’s designed to raise awareness around GE’s initiative to hire 20,000 women in tech positions over by 2020. You can find the video here.

What are your suggestions on large volume referrals for entry-level roles?

J: This is an area where quantity of referrals can exceed quality. The best practice here is to structure a referral campaign in a way where it targets the precise type of talent you’re looking to attract. If you segment your messaging and leverage that segmentation to tailor it to a specific audience — of both referrers and referrals — you should be able to control the quality of referrals coming in.

Can a referral program have a positive impact on a group of disengaged employees?

J: I absolutely believe it can. But I would think of it as medicine to treat a symptom, not medicine to cure the underlying disease. A referral program can be a great way to expose those employees to — or remind them of — the values, purpose and opportunities that make your business an appealing place to work. If you have a unique referral incentive program (say, a donation to a cause that’s close to that person’s heart or the organization’s mission) that can be another way to re-engage someone around your reason for being.

Employee disengagement is often associated with those employees not feeling valued or aligned with your organizational purpose. If you can remind them why they joined your company — and why someone else might want to, as well — it could go a long way toward helping them reframe the way they think about building a career with your business.

Do you think a dedicated resource is needed to manage a referral program?

J:  If you don’t have technology to help automate the process of building and executing campaigns, managing referral activity, and measuring program success, then yes. Without that technology, someone will be responsible for manually doing all those things — and that manual process can absorb a lot of time, resources and energy.

If you do have referral technology (or you’re planning to invest in it), the answer is typically no. But that largely depends on how big and how dynamic you want your referral program to be. That said, with the right technology, you should be able to build and grow your program without dedicated headcount in the beginning and then play it by ear.

Enjoy this blog post? Get more tips on building and measuring a top-notch referral program by checking out the on-demand webinar on HCI.org.