One of the major sources any Talent Acquisition Manager or an HR professional will rely on is its internal references. Hiring from this source has proven reliable because the candidate is aware of what the company has to offer through the company’s employees before joining. Less time and effort are required to set up the context and filtration.
But what is in it for the employee who is doing all the work in pitching your company as the best place to work? Most companies have a referral bonus which is paid out once the referred candidate completes certain tenure, depending on the company’s policy. That is a win-win for both the candidate and the employee. While the former gets a job, and the latter gets paid for referring them to the job. What is the company doing to leverage this source of hiring?
We saw how internal referrals are a great source to recruit potential talent out there at a lesser cost. Moreover, this cost is going to the employees of your own company, increasing retention costs as well. Naturally, with so many pros, HR professionals and recruiters would want to leverage this source of hiring as much as possible. Let’s look at how Springworks used an internal reference policy and how EngageWith helped us achieve that.
Set a proper method of referring
Most companies have a mailing address to which employees can refer a candidate by attaching the resume. Having one mailing address will flood the inbox with resumes. Additionally, it will be harder to keep track of one particular candidate.
We started to collect the referrals via a Google form. It is simple and easy to track, plus it helps the recruitment team track any candidate in real time. With Google forms, we can also keep track of the source of the referrals, whether the candidate is a known person in the employee’s family or has simply reached out to them via social media for a referral – this helps us keep a tab of the company’s perception and image, and how our employees are pitching us.
Mention referral amounts clearly and focus on diversity
For each referral that we ask for in the company, we mention the referral amount clearly, and further, we give a higher referral amount for female candidates, which helps us increase diversity. We also increase referral bonuses for roles that are taking time / are tricky to close.
Payout segregation in 4 parts
The biggest incentive for the employee is a referral payout. It is believed that the referred candidate is coming with trust since they are attracted to the company and will stay with it for the long run. We announced that the referral payout would happen in 4 equal parts, each at a milestone of a candidate’s journey with the company. With this, we also announced that we would not be having any recovery clause if the candidate leaves the company, however further remaining balance amount will lapse.
We saw a more considerable inflow of referrals since almost 80% of the amount is provided within a year of the candidate joining us.
Instant and public referral payout using EngageWith
We process all our referral payouts via EngageWith bonuses, and not with payroll. This means that the employee does not have to wait till month’s end to get the amount thereby increasing its value. Further, we make sure that every payout that we make is announced in the company – this helps us in two ways:
- Public recognition definitely boosts the employees’ morale- a feeling of being recognized and valued turns out to be a feel-good factor for them
- It helps us keep our employees aware that they are always welcome to refer candidates to the company.
With a referral you can easily:
- Save your recruiting costs which go towards paying agencies and job websites
- Make the work of your recruitment team easier
- Generally, these employees have higher retention rates because of the already-established connection with the existing employees and the clarity of the expectations.
- It comes with trust since it is coming from your own employees.
Companies with a good referral amount can follow smaller things such as making the process better, making it instant, and making the recognition public to really take their referral policy to the next level.