5 Things You Need for a Successful Referral Program

Firstbird Talent acquisition

In this time and age of uncertainty and revolutionary changes in the work-life balance due to financial and health apprehension, employees have raised the bar of their priorities and expectations in the workplace. Workers feel empowered to make requirements and benefits, such as essential benefits of remote working. Employers thus have to consequently adapt to the current recruiting reality by modernising their company culture and getting closer to their employees' core beliefs and needs.


Moreover, prospective candidates increasingly acknowledge that the organisational environment matters, especially in these increasingly remote home offices. According to the 2022 Job Seeker Nation Report, 55% of respondents would abandon a new job if the company culture is not aligned with their expectations or personal values. Nevertheless, the research also suggests that 45% of respondents are willing to find a new job. They seek or find job opportunities through personal contacts (friends 46%; professional connections 25%) and social media (39%). 

How can you combine all this data in an effective recruitment strategy? By building an employee referral program

What is an Employee Referral Program?

Before diving into the definition of the employee referral program, we need to take a step back and get to know its fundamentals: employee referrals. These refer to the applications for job openings coming via your employee contacts. Employee referrals are considered reliable and hiring time and cost-cutting: that's why 85% of companies include them in their recruiting mix.

But how does it work? Your current employees, but not only - even your ex-employees or even partners can provide you with referrals - share job advertisements and job openings within their networks with friends, acquaintances and former job or university colleagues. When a referral provided by an employee - at Firstbird, we call them Talent Scouts - leads to a successful hire, they receive a reward.

The concept of referral recruiting lays the foundation on the opportunity for companies to find high-quality candidates through the extensive network of their current workforce. It's a precious resource for reaching out to the passive workforce, as it guarantees direct access to them. 

However, a well-thought-out referral process is required for referral recruitment to be proficient by bringing in high numbers of employee referrals and being used systematically. That's when the employee referral program comes into play, structurally managing all incoming referrals and incorporating them into the application process. In the following paragraph you’ll find out what you need to have a successful employee referral program. 


1. An Automated Employee Referral Program 

An automated employee referral program is a structured approach to managing the referral applications by automating and digitising the touchpoints of a referral journey. It includes the automated programming of all stages in referral recruiting, from streamlining daily administrative tasks of managing employee referrals and the communication process, tracking the applicants' progress throughout the referral touchpoints, to monitoring when a reward is due and the referrer entitled to receive it. 

Let's dive deeper into the digitisation of the communication process, automated for both employees and TA teams: 

  1. Opening positions will be promoted on time, regularly and broadly via efficient internal communication channels.
  2. Your employees can share the job openings outside the working environments with their network through social media channels with one single click. 
  3. All the incoming applications will be tracked and automatically attributed to the responsible referrer Talent Scouts. 
  4. The incoming referrals will be incorporated into your talent pool and will be processed according to your regular hiring process.
  5. Since employee referrals are integrated into your hiring process, the system will keep track of the applicant's progress. You will be able to give out timely updates to your referrers on the status of their referrals.
  6. Showing appreciation to your employees has never been so easy! Once you build up the reward strategy, the reward payment procedure is transparent and simple. You will be notified whether the requirements for a reward have been met and when to arrange for the reward's payment.
  7. The referral platform also allows ranking the referred applicants and automatically feeds the application data to a talent pool.

An assisted handling of employee referrals will rejuvenate your referral procedures and allow you to shorten the time and cut costs of administrative efforts associated with the manual management. There won't be any more small talks, endless phone calls and emails, lost referral applications, neverending excel lists, additional tasks and administrative efforts around rewarding!  

2. Compatible Referral Software 

An automated feedback loop such as those above will increase your responsiveness by accelerating your recruiting process and proactiveness to keep referral candidates' pipeline steady.

Therefore, the purchase of the referral software is a high-priority decision when it comes to successful employee referral programs. When implementing a digital referral platform, be careful that it is equipped with the following features: 

  1. It is compatible with your existing applicant tracking system and human resource management system. 
  2. It integrates with social media channels and is equipped with sharing functions.
  3. It is equipped with tracking features, and displays gathered data on statistic dashboards
  4. It allows customised and company-branded job content 
  5. It has a mobile app that relates to a web-based, mobile-friendly referral platform 
  6. It enables the ranking of suitable candidates, filters the applications and feeds data automatically to a database 
  7. It includes the customisation of reward policy and embedded reward shop
  8. It scales to adapt to future company growth and job market challenges. 

With such a digitised referral process, HR managers can quickly check the performance of the referral recruiting. You can easily monitor the via whom Talent Scouts and which channels you receive most the referrals, for example. Accordingly, data monitoring enables you to determine the best performing KPIs and adopt a data-driven approach to referrals, with consequent fine-tuning of your referral journey and elevating your employee referral program.

You can always check if the referral platform you're considering is compatible with your existing HR tools. Check what solutions the Firstbird referral platform offers in terms of automation. See Firstbird demo here

3. Referral Incentives

The sine qua non for any successful employee referral program is to reach a high employee engagement rate within the referral activities. Showing appreciation and recognition to your Talent Scouts for their commitment to extra tasks plays a central role in starting and keeping providing referrals. Accordingly, gratifying incentive policies and an entertaining and engaging reward system will prompt employee engagement within your employee referral program.

So, what are the main components of the winning reward strategy and how do you select the right amount of cash bonuses and the most attractive non-monetary incentives? There is no secret ingredient as every company has different organisational setups and, therefore, requirements and demands. However, the main difference between monetary and non-monetary incentives is that monetary rewards are usually paid in a cash bonus when the referred candidate gets hired. The payment of cash bonuses usually occurs after the probationary period, even if our referral experts advise splitting the amount into two stages of payment so that the Talent Scouts' satisfaction is doubled. 

The non-monetary rewards are the most desirable objects or items, as your employees wouldn't usually purchase or afford them. They are typically paid out for referral activities such as sharing job vacancies on social media, reaching a considerable number of job views, referring outstanding candidates, or submitting referrals daily. Since they are more gratifying because easier to achieve, our referral experts suggest implementing them in your reward policy.

However, the Firstbird digital referral platform includes:

  • The activation of a reward shop.
  • Enabling you to customise even more non-monetary incentives.
  • Personalising this way your referral experience.

For example, talent Scouts could easily choose among available items according to the points collected for their referral performance. 

4. Motivated Talents Scouts

Talent Scouts are the main actors of employee referral programs: employee referrals' sustainability and active usage depend entirely on them. However, rewards and referral incentives are not the only motivation drivers to keep engaged with the referral activities by regularly providing you with new referrals. 

Company culture again plays a crucial role in employee engagement. Satisfied employees are more demanding with their employers: they require their workplaces to align with their personal perspectives and objectives. It reflects in fair compensation, flexibility to work from home, growth opportunities and health benefits, and getting recognition for work commitment and support by receptive leaders to pursue career advancement and achieve personal goals. 

Moreover, employees also expect employers to guarantee a diverse, equitable and inclusive working environment. And this is also confirmed by the prospective candidates: 38% would turn down a job offer if the company lacked diversity in its workforce or had no clear goals for improving diversity. Therefore, if employers want to retain their current workforce and attract the top quality job seekers, they have to offer these workplace conditions. 

If your employees are satisfied with their role and engaged within the company mission, they will be happy to contribute to the company's growth by proposing talented prospective colleagues. And having your employees advocating for your company will increase your competitiveness in the job market: 66% of candidates believe that interactions with employees are the best way to get an insight into the company culture. As your spokesperson and brand ambassadors, Talent Scouts will share their contentment with the workplace. Happy employees will convince your applicants to accept the job offer better than the high compensation.

5. Scalable Growth Strategy 

The best imprint you can give to your employee referral program is designing the referral strategy that includes evolving over time to accommodate your future growth needs. Securing that the referral software of your choice is well-fitted and equipped with the proper functions is a strategic move to consolidate a smart usage of your referral data. 

Good traceability of referral data is indeed crucial as it allows you to reshape your previously set criteria and rethink the KPI of your employee referral program. This way, you can adjust and adapt with data at hand to your employee referral program as it gradually takes off and the referral journey develops.   

The Firstbird team of experts can support you in outlining the top-performing referral tailored to your company case by customising the functions of the Firstbird referral software. You'll be able to set up a digital employee referral program from scratch or automate your manual referral recruiting channel so that it counts among your most promising recruiting channels. Talk to Firstbird!

Would you like to be part of the global Benchmark Study on Employee Referrals? Firstbird is currently gathering experiences on the usage of employee referral programs across markets and industries for the third year in a row. Contribute to filling out the Firstbird survey and endorse the statistical analysis of the critical referral topics such as:

  • What are the best reward strategies and payments? 
  • What referral hiring success rate to aspire to?
  • How to raise the level of employee referral activities and engagement? 
  • What are the critical factors for successful referral programs?

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