An employee referral programme is a human resources tactic used by businesses to persuade current employees to recommend qualified individuals for open positions in their firms, frequently in exchange for rewards.
How can you assess the effectiveness of your programme for employee referrals?
Your employee referral programme should be frequently evaluated for effectiveness and adjusted as necessary (or discontinue it, if it is not working). You might wish to monitor the following KPIs for your employee referral programme:
total number of recommendations.
number of recommendations by department, area, or job.
compared to other recruitment approaches, the proportion of employees hired through the employee referral programme.
Comparing the quantity of qualified candidates referred to other recruiting techniques
The ratio of referrals received through the employee referral programme to hires compared to other recruitment strategies using evaluated CVs was the same.
Ratio of workers participating in the programme (how many employees participated in the referral program).
recommended new hires’ retention rate in comparison to new hires obtained from other methods of recruitment.
Compared to new recruits obtained through other means, referral new hires take less time to onboard.
performance of new hires who were referred as opposed to new hires who were located in other ways.
employee surveys measuring satisfaction with the programme.
Comparing the price of employing one individual through a referral scheme with alternative options.
Examples of employee referral programmes with non-cash rewards
Distillary
The distillery recommendation programme demonstrates how crucial it is to first find out what inspires your staff, as money is not always the best reward. The distillery switched out financial rewards for technological equipment. As a reward for referrals, they provided gadgets like the most recent iPhone or Apple Watch. These challenging incentives turned out to be much more sought-after than money.
DigitalOcean
With their revamped programme, which rewards employees with a $3,500 referral incentive and an additional $1,500 charitable donation on behalf of the staff member, DigitalOcean provides a truly unique employee referral programme example. If the employee choose to make a larger donation, DigitalOcean matched it. Successful referrals significantly increased. 40% of DigitalOcean’s new employees in 2017 came through referrals.
Employee referral programmes largely rely on trial and error, like any marketing strategy. You need to evaluate and adjust your recommendation tactics to eliminate those that don’t connect with your staff members.