Why your employee referral program isn’t working

Have you gone through the motions of setting up your employee referral program, only to be left underwhelmed by the lack of interest and results?

Throughout my time in the recruiting industry over the last 2 decades, I’ve helped numerous businesses implement successful referral programs. Often, they already have one in place but can’t put a pin on why it isn’t successful. I’ve narrowed it down to three common factors that I see prevent an employee referral program from being successful.

  1. You don’t promote it enough

    You set up an employee referral program, let your employees know about it and then wait for it to bloom into existence. Sound about right?
    You can’t just talk about it once. Putting this into action needs to include consistent reminders to your team about how they can participate and what they gain in return.

  2. You don’t make it matter

    (and it needs to!) Offering a team member $100 or a giftcard won’t likely be enough to encourage them to spread the word or actively seek out people in their network that could be a fit. Make it noteworthy – give them something that will cover paying off a credit card, cover a weekend trip, allow for the entire family to go to a theme park for the day.
    I’ve seen companies pay tens of thousands of dollars in recruiting fees to a headhunter, yet shy away from offering more than $250 in their employee referral program. Just think about it, but offering your team an incentive that actually makes a difference to them, you may just give them the motivation to be intentional about recruiting.
    Pro tip: Talk to your marketing team for ideas. If you do it right, you can turn your money hungry employees into recruiters. You just need to make the stakes interesting enough for them.

  3. You’re making it too hard to earn

    Don’t tie the prize to retention. Lots of times, business owners won’t pay their employee for bringing in a referral until they’ve lasted 90 days, but that’s inferring that the employee is now responsible for their coworker’s retention.
    As a third party recruiter, I don’t guarantee that an employee I place will be around for 3 years. That’s up to the employer and the leaders within the company. You can’t expect the person that referred an employee to be responsible for their retention as well. Don’t get me wrong, you can offer both a sign on AND retention bonus, but don’t group the two together. It can make a referral bonus a lot harder to attain, and therefore, a lot less motivating to work towards.

Often times, a small tweak or consideration of the points listed above can make a massive difference in results. Your team will be more fired up about the actual opportunity to make money with less hoops to jump through. Want to hear more on employee referral programs?

Check out my video below

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