Employer Branding

Why Employee Referral Schemes Aren’t Boring

Everywhere I have ever worked has had an employee referral scheme. I can’t say any of them have set the world on fire. They are one of those things that you feel like you have to have, without really doing a great deal with it. A bit like my kitchen really.

It’s been on my ‘to do’ list for a long time to revamp our company scheme. It has just never reached the top until recently. To be honest there are just so many other more exciting things going on in the world of recruitment right now. But when it got to that point that I just couldn’t put it off any longer, I surprised myself by finding that I have fallen in like with employee referral schemes again.

Why do employee referral schemes fail?

Frankly, a lot of them are boring. Rewards may not be significant enough to generate interest, or the schemes just aren’t innovative. They also need a lengthy policy with all sorts of rules. Some companies make it hard to get the reward with a list of requirements that must be fulfilled. Referral schemes need constant promotion if they are to stay top of your employee’s minds. There’s also the issue that some people have raise about diversity implications, but that’s not insurmountable.

We know we should all have a scheme though. They are cost effective, and your existing employees should be capable of being advocates for your employer brand (assuming of course that your company is actually a good place to work. If it isn’t it might be best to stop reading now).

Friends for benefits – tips on making employee referral schemes work

  • Firstly, decide the key aim of your scheme. Is it so save money on recruitment costs, improve your employer brand, or something else entirely? The reason for your scheme should form the basis of your rules and rewards.
  • Secondly, strip back the rules as much as possible. If you put lots of hurdles in place before people can get their reward then they might not bother. It should feel like a good experience but if people have to wait six months for the new starter to pass their probation period if might become something to moan about rather than a motivator. The only people who shouldn’t be entitled to a reward are those involved in the hiring decision.
  • Next, make the rewards interesting. Lots of companies just offer cash, but after tax it might not mean much, especially to your higher earners, unless you are offering plenty of money. We are offering iPads at the moment for successful referrals. You could think about offering a percentage of what the agency fee would have been, extra holiday, charity donations or chance to win a great annual prize. Or even just a choice of reward for the employee in question.
  • Change your rewards regularly and target your hard to fill roles with higher rewards. A one size fits all approach won’t deliver results. Some people criticise reward schemes that are hierarchical for sending the wrong message, but ultimately, one aim of any scheme must be avoiding high agency fees, so why wouldn’t you pay more money for senior appointments?
  • Don’t forget your social media links. Specifically offer rewards to your employees if they share your jobs with their connections and it results in a hire (ok, you got me, we haven’t quite got this working yet, but it’s on the plan). There’s software available now that will do this for you if you have the budget; if our FD happens to read this, I absolutely promise it will pay for itself. HRgem is rarely wrong – ask my husband.
  • Finally, remind remind remind. Continually tell people that your scheme is there, and what’s in it for them, and you might just get a result.

What are your experiences of employee referral schemes? Please share in the comment section below.

Related: What is the Point of a Recruitment PSL?

By Gemma Reucroft

Gemma Reucroft is a HR professional specialising in recruitment and employee relations, with a passion for coaching. She tweets as @HR_Gem.