RTT – Developing a Successful Referral Programme

Referral SchemeAn effective referral programme can be a powerful, economical channel to source fantastic talent; however one that can often be challenging to master. From structuring and incentivising the scheme, through to successfully marketing and managing the process, there are several elements deemed critical to ensure a referral scheme success. It seems that all too often these programmes are launched with a wave of enthusiasm only for them to lose momentum and slowly fade away.

These are the thoughts and takeaways from a Resourcing Think Tank held on Tuesday 23rd January, hosted by NEX Group’s Kiran Brown. This Think Tank sought to discuss the topic of “Developing a Successful Referral Programme” whilst covering:

  • Building a referral centric culture
  • Deciding the value of referral fees offered and when they are paid
  • Thinking creatively around the types of referral rewards offered and the promotional campaign around this
  • Understanding the optimum time to engage new employees to tap into their networks
  • Evidencing the value that referrals deliver back to the business.

Where do we Start?

Whether it’s your first time building a referral programme or you’re giving your current approach a thorough review, the process is very similar. Before designing your referral scheme it’s recommended to apply some focus to the areas below:

Ownership – Who should own the referral scheme and be involved in its success? Identifying your programme’s key stakeholders is crucial so that all are aware of expectations. Think outside of recruitment and HR; leaning on your business’s marketing team to create powerful visuals and storytelling is recommended.

Eligibility – Will you be restricting certain employees from partaking? If so, why? Does it make sense for one part of the business to be able to refer talent and not others? The focus surely needs to be around simply hiring the best people!

Awareness –  Is your referral scheme providing a consistent offering that the business and its employees are firstly aware of and, secondly is it actually understood? We need to ensure everyone internally is aware of the scheme for it to be used to its full potential.

Utilisation – Creating a culture where all employees act as a brand ambassadors for every role is of course the utopian scenario. But as aspitational as that might sound, we can take small steps to encourage them to follow the company LinkedIn, Facebook, Twitter, Instagram etc. profiles and get more involved with liking and sharing content with their online community. It’s a great way to generate candidate leads and build an engaged workforce. Additionally, encouraging hiring managers to utilise their and their teams’ social media networks to pipeline talent could prove very fruitful. However, don’t fall into the trap of waiting until you have a live vacancy to market; encourage your people to continually promote the business and talk about the great stuff that’s happening internally all the time.

When do we ‘Sell’ the Referral Programme to our Employees?

There are differing schools of thought on the optimum time to engage employees in the programme to tap into their networks. They include:

  • Highlighting the referral scheme in job specifications and company benefits information
  • Flagging it when the candidate’s offer letter is sent out; complete with details of current live vacancies
  • During the onboarding and induction process
  • At roadshows at other office locations “i’m going to be on site then and keen to discuss ____”
  • When employees receive probation reviews. This can be a great time to ask them who they know and promote the programme

Why do Referral Programmes Fail?

Stagnation – Often new initiatives and programmes start with a bang but become stale quickly. It’s therefore important to review your programme and it’s success regularly to ensure it’s still delivering the required results.

Overly complicated – A complex, form-led, time consuming process will be ignored. There needs to be a simple straight forward process to encourage people to use it and indeed get the most out of it. Using the company’s intranet (if you have one) is an obvious option to consider.

Experience – Management of the process in a large organisation can be challenging. When creating a culture of referrals, it’s crucial to show respect to both the referred candidate and referrer by following a professional process and following up on your obligations to both parties. This can be time consuming, so it’s important to balance the desire to encourage referrals against actual live vacancies. Often it just comes down to being upfront with expectations.

The common view seems to be that like most things, a bad user experience causes the biggest harm to the programme, typically due to a lack of communication with both the referrer and referral. Acknowledgement of the referral in the first place, advising both sides of the progress throughout the process, and providing constructive feedback at the end of an unsuccessful referral sounds like common sense, but is it a reality in practice?

Who Qualifies and when do you Reward the Referrer?

It seems to be a common approach that senior employees are not entitled to benefit from the programme because of the assumption that they should be recommending talent into the business as standard. However, why is this the case? Most people tend to refer good quality candidates as it is a reflection on them and their reputation; surely culminating in higher quality candidates but lower volumes. Therefore, why would you discourage or exclude anyone from the programme when the end goal is top talent?

Some organisations stipulate that you can only qualify for a referral reward if you actually know the person in some professional or personal capacity. Businesses often take the tact that a referred candidate sourced from a social media platform is more of a ‘good deed’ by the employee and therefore doesn’t warrant a reward. But why? If their proactive behaviour generates a placement that otherwise the business would not have made why should that individual not be properly rewarded? After all, it’s cheaper than an agency fee!

So what’s the going Rate for a Referral?

Firstly, does the reward have to be in pound notes? There are statistics showing that there’s no correlation between the amount paid and success of a referral programme. This shows the importance of focussing more around creating cultural drivers to refer.

Why not think more creatively and ask what the people taking part would be motivated by? Could it be additional holiday days, trips, an iPad, experience days, a hamper, flights, or a CSR initiative whereby the company makes a donation to charity of your choice? Furthermore, why not consider team or departmental rewards as opposed to purely individual? There is plenty to consider when building an exciting, imaginative and engaging offering. However, it’s important to explore the tax implications of the more creative referral rewards and understand what third party providers are out there to support you.

Measuring Success

As with any programme or initiative it’s important to understand how we evidence the value that it delivers back to the business. Tracking and monitoring the progress and results of your programme is essential to justify its existence. Learn how to make calculated changes and improvements and to sell the benefits to its users for continued buy in and referrals.

Yes of course there is the short term measurements like the number of referrals made and the success rates of those applicants from an offer and placement perspective, however can we create more powerful and compelling data for the business? Why not map the journey of where these placements have led to, looking at the business returns and successes of that person over the years. Could you show how referrals spread from one referral ‘acorn’ into a referral ‘family tree’? This would be a pretty compelling message to promote.

Finally, it’s equally important to ensure you’re measuring the user experience of the referrer, referred candidate and the line manager to ensure people continue to buy into the scheme and have a hunger to use it.

Think Tank Takeaways and Immediate Action Points

  • Firstly (and most obviously!) ensure your referral programme is fit for purpose
  • Understand clear goals of what you want the programme to achieve
  • Ensure that GDPR is factored into processes
  • Understand who the responsibility for the programme falls with
  • Consider who else in the business could be involved
  • Understand if the scheme could be tied into the overall Reward strategy?
  • Explore ways of measuring and linking the scheme to hiring managers
  • Utilise the power and reach of your workforces’ social media channels
  • Explore different ways of rewarding outside monetary value
  • Review and refresh the programme to ensure it continues to deliver and is front of people’s minds.


Rob Bascombe

Written by , Business Manager

Twitter: @RB_OasisHR

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