For many companies, employee referrals are a coveted source of hire. These referrals offer a reduced time-to-hire, an improved quality-of-hire, and ultimately a higher ROI than other sourcing strategies. The success of any referral program, however, depends on how well the program is implemented and managed.
It’s important to evaluate the effectiveness of your referral program on a regular basis. Here are five signs to look for to know when it’s time to upgrade your employee referral program.
1. High or Increasing Recruitment Costs
Your referral program may be in trouble if your recruitment costs continue to rise, yet hiring outcomes remain stagnant. On average, employee referral programs can save your company $3,000 per hire. The money you’re paying to recruitment agencies could go towards enhancing your current employee referral program instead.
2. Referral Can’t be Made in Under a Minute
Many referral programs today are managed through an ATS platform or a shared inbox. These systems may seem convenient, but in reality, they can make it difficult for employees to submit referrals quickly and easily. Unfortunately, in today’s fast-paced world, employees are not going to waste time making a referral on a hard-to-use platform.
3. Lack of Consistency and Visibility
Your employees aren’t going to keep making referrals if they never see the results. You can’t accept referrals and then let them fall into a black hole. You must add both consistency and visibility to your referral program so employers can track the progress of their referrals. Remember, referrals are your best source of hire, so, if you want to improve the quality-of-hire, consider revamping your referral program.
4. Poor Company-Wide Promotion
Many employers start their referral program with a big promotional and therefore see a surge in referrals. Then over time, the program is forgotten about and the number of referral numbers start to slump. If your company has fallen into this trap, then updating your referral program can help get it back on track.
5. Referral Program Mismanagement
Referral can provide a great ROI, but they also can be overwhelming to manage, especially for an in-house HR team that is using emails and spreadsheets to manage the program. If your team is having trouble tracking referrals, managing rewards, establishing eligibility, and keeping employees updated, it's time to update your referral program.
If you identified with one or more of these signs, now is the time to upgrade your employee referral program and reap all the great benefits it has to offer. For help discovering what type of referral program is best for your company, check out these six Pre-Built Employee Referral Program Templates.