How to Start an Employee Referral Program

By Emily Suess

If you’re a small business owner, we don’t have to convince you of the value of a great employee. Gathering the best candidates for the job is the only way you can be sure you’re hiring the most enthusiastic, competent employees available — employees that will stick with your company. One way to find these candidates is to develop an employee referral program that offers current employees an incentive for helping you recruit.

Start with the Incentive

The whole point of a referral program is to offer your employees an incentive to introduce you to top talent. The question is, what should the incentive be? Of course, that depends on your particular circumstances. Sometimes a little extra cash does the trick. You can offer a $50 reward to a current employee who introduces you to someone you end up hiring. Or, if you can afford it, you might want to offer the referring employee a $1,000 bonus on the condition the new hire stays with your company for at least one year.

There are other non-monetary incentives you can award if money is tight or you prefer to take the program in another direction. The choice of available office space, a more ergonomic desk, or even flex scheduling options are nice alternatives. The added bonus for you is that other employees will take notice and want to find a recruit for you as well. A little incentive can save you a lot down the road, especially when you fill your business with capable, loyal employees. The cost of continually advertising open positions can really add up.

Make the Referral Process Simple

Instead of handwritten forms, let your employees email you their referrals, and remember that the more information your require at the outset, the less likely your team will be to submit recommendations to you. Written essay-style referral forms decrease your chances of actually getting submissions. Who has time for that?

Keep Your Current Employees in the Loop

Remember, it’s hard to be a job seeker. Without discussing the private details of your hiring decisions, you can keep your employees informed about where you are in the hiring process. Chances are they will be fielding a lot of questions from eager candidates themselves about whether or not the position has been filled. A simple update about your plans to narrow the field down to two or three candidates by the end of the week is a considerate way to let both the employee and the referral know the selection process won’t drag on forever.

It’s equally important to make sure all your current hires are aware of the program. This gives everyone the chance to participate and provides you with an even better pool of talent from which to choose.

There’s no need to limit yourself to referred candidates when it’s time to hire a new employee just because you’ve started a referral program. Go ahead and spread the word about openings far and wide to ensure you can hire the best person for the job.

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Emily Suess
Emily Suess is a full-time technical marketing writer in the software industry and a part-time freelance copywriter. To learn more about marketing your small business online, check out her copywriting blog, Say It With Me.

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