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Employers today are endlessly creative when it comes to work perks. Beyond free snacks and ping-pong competitions, companies are offering up things like nap pods, on-site yoga, and countless versions of the in-office happy hour. The majority of these activities are put into place to fuel recruitment and aid in retention (while also giving older generations the chance to start sentences with “when I was your age…”).

While in-office dry cleaning is nice, take a look into any employee engagement survey, exit interview, or Glassdoor post, and you will likely find a single common reason why people like working for their organization: the people.

Our co-workers are part of our daily lives, and we often interact with them more than our own partners and friends. These are the folks who proofread your important email before you send it to your boss, stay late to work with you on a big project, and share the same annoyance level that you do when your pod-mate clips her fingernails at her desk. (Ew.)

Many close working relationships build over time, hard work, and those Friday margaritas, but there’s another way to build that camaraderie. Introducing a robust employee referral program will not only amplify your recruiting efforts, it also works wonders for retention. The steps outlined below will help you meet your hiring goals faster, increase employee engagement, and keep turnover at bay.


1. Have a Policy

Seems like a no-brainer, but the tricky part is crafting a policy that fits your workforce and budget. A great referral program can turn a small recruiting department into an entire company of recruiters—folks with thousands of social media connections, hundreds of former co-workers, and countless alumni contacts.

If your policy is more than a few years old, it’s time for a refresh. Outline what qualifies as a referral: Does the referral need to be someone the employee worked with in the past, or will a person who saw an acquaintance's Facebook post about the open role qualify? The right answer depends on how widely you want to cast your net. If you become overwhelmed with unqualified referrals, it makes sense to put stricter parameters around your policy. Will you pay the same amount for each role, or more for senior-level positions or hard-to-hire roles (read: engineers)? Think carefully about the payout structure. The best programs include a two-step bonus: 25% is paid out immediately after the candidate starts, and the remainder is paid anywhere between three and 12 months later.

When determining your budget for referral bonuses, look at what is currently spent on recruitment efforts, and build from there. Don’t discount the amount of time an internal recruiter spends sourcing, look at the referral bonus as a cost-savings measure when compared to agency fees, and remember that your referral program is not a replacement for career fairs and job postings, but rather a complement.


2. Spread the Word, Continuously

Once the heavy lifting of creating the policy is complete, it’s time to let people know about it. Ask a member of your leadership team to send out the first announcement in order to show the importance of and excitement around nurturing referrals. Send email blasts about new roles with a reminder that referrals are tied to a cash bonus. Train employees on the use of social media to make it easy for them to share your open roles. And keep in mind that it’s not only about sharing your current vacancies—your employees are an extension of your employer brand, so encourage them to post pics of company events and exciting news to build ongoing awareness among their networks.

While existing employees likely have a solid understanding of who will fit into your awesome corporate culture, don’t forget about your new hires. Include information about your referral policy in your pre-employment materials, and your newbies might just be inspired to bring a few of their former co-workers with them. Now you have an instant buddy system and can capitalize on the excitement that comes along with landing a new job.


3. Reward and Recognize Accordingly

In an effort to perpetually remind your team about the benefits of your program, make sure to celebrate the recipients. Don’t just quietly add an extra few Benjamins to your employees’ paychecks; their managers and co-workers should know that they are helping the company grow. You can create a bit of friendly competition by announcing when a referral is hired and spark a conversation around how the benefactor will spend his or her hard earned cash.

It may help to put the bonus in non-monetary terms. Instead of saying “Susan earned an extra $500 for referring Dylan for the Account Executive role,” try “Susan banked extra cash for her awesome referral. Don’t be surprised if you see her swapping her morning train ride for a black car a few times this month.” Allowing people to visualize what they would do with extra cash will prompt them to work harder toward earning it.



Finally, don’t let your hard work toward cultivating referrals go to waste. Make sure to track your recruitment sources and set goals for gaining more referrals in the future. With a little care and feeding, you’ll be on your way to recruitment and retention success with the help of your most valued asset: your people.