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How employee referral programs can save you money

How employee referral programs can save you money

Finding the right talent to help you grow is one of the hardest aspects of managing a business. However, there’s a vast pool of potential resources sitting right under your nose: your employees’ networks. Here are some tips to help you make the most of an employee referral program and how it can boost retention as well as your bottom line.

The benefits of employee referrals

A Booz Allen Hamilton survey of leading US employers found that 88 per cent secured their best staff through referrals. In short, referrals can both save and make you money. So what are some of the best strategies for increasing your referral rate?

1. Boost participation using an employee referral bonus

Extra money is a great motivator for getting more out of your employees, and referrals are no exception. When working out an appropriate sum for a cash incentive, think about the role being filled. Does it entail a high degree of responsibility? How much would it end up costing the company if the right person isn’t found? What are you saving by not sourcing through a recruitment agency or career site?

2. Get staff to tap their social networks

Your staff are undoubtedly across several social media platforms, so encourage them to look for appropriate candidates there. This could turn out to be as simple as an employee posting to their Facebook wall, informing friends of a new job opportunity.

LinkedIn can also be an excellent source of referrals, as most users post their job titles, experience and responsibilities, which your employees can easily find using simple keyword-based searches.

3. Be creative with incentives

There are incentives other than cash that can also be effective in motivating staff to get involved in your employee referral program. They mainly revolve around friendly competition (also known as ‘gamification’) and non-cash rewards, and include:

  • Thanking the employee publicly.
  • Tracking the number of successful referrals on a scoreboard.
  • Holding a prize raffle for employees.
  • Offering other non-cash incentives, e.g. travel or wine vouchers.

4. Make your business a place people want to work

Of course, your employees are only going to refer people to your company if they feel positive about their work environment. Establishing a positive, supportive company culture will attract star employees who will boost overall productivity. The best part of all is that when employees like the people they work with, they’ll be more likely to stay with the company longer and encourage their friends to do the same.

It makes basic sense that your organisation’s best people are likely to mix and mingle with individuals who share similar values and capabilities. Referrals can be the best way to access that talent and get it working for your organisation.

A fully engaged workforce can be the deciding factor in the success of a business. Find out other ways to engage your workforce.

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