This document provides guidance on developing a successful employee referral program. It discusses increasing quality referrals, engaging current employees, partnering with hiring teams, and implementing the program. Successful programs emphasize modest rewards and recognition over large financial incentives, have a transparent process, and provide educational materials for employees. They also create a branded program with marketing materials and a central information hub for employees. Measuring the number and percentage of referrals hires, time to fill, and retention by source can demonstrate the program's impact on recruiting metrics and success.

1. DEVELOPING A SUCCESSFUL
EMPLOYEE REFERRAL PROGRAM
CINDY YARBROUGH

2. AGENDA
• Increasing quality employee referrals
• Engaging current employees in the
talent acquisition mission
• Partnering with the hiring teams on
targeted campaigns
• Implementation of a successful
employee referral program
• Guiding more relevant referrals
• Budgeting
• Measurement of success
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3. INCREASING QUALITY EMPLOYEE REFERRALS
• Companies filled about 20% of their
openings with a Employee Referral
Program
• It isn’t easy to design a good ERP;
however running it successfully requires
attention to details
• Within a year of having the ERP ideas in
place, companies should be able to
achieve referral rates as high as 50%
Source CareerXRoads-2015
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4. ENGAGING CURRENT EMPLOYEES
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5. SPEED
APPLICATION-TO-HIRE TIME
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• Research has shown that successful
employee referral programs can speed
the time-to-hire by 48% over other sources
• Not only because you have more
candidates applying for open jobs, but
because you can stockpile referrals to
build a talent pool that’s ready to apply
– Source- index 2015

6. RETENTION RATES
After one year of employment,
referred employees have the best
retention rate at 45% retention
after one year compared to 33%
from career sites and 22% from
job boards
Source- Jobvite index 2014
45%
33%
22%
Employee Referral Stats
Referrals
Career Sites
Job boards
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7. EFFICIENCY
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Applicate-to-hire ratio
• Referrals are #1 and are hired at a rate of 1 out of 3 applications for top-
performing firms and 1 out of 10 at average firms. (Compared to an average
applicant to hire ratio of 1 out of 18 from all sources).
• An Employee Referral Program can help recruit “hard to fill” and/or
specialized roles.
• An ERP can also help fulfill diversity goals, if desired.
Source: Dr John Sullivan and Associates research

8. WHICH MEANS, THE MORE REFERRALS YOU HIRE…..
• The higher the ROI from each employee
on average
• The more high quality employees you will
have
• The faster you will fill your openings
• The less turnover you will have
• The more efficient your recruiting process
• The less money you spend on other
methods of recruiting
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9. 9
PARTNERING WITH RIGHT HIRING TEAM

10. NOT ALL ERPs ARE CREATED EQUAL
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11. WHAT ARE YOU DOING NOW?
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• Focusing on financial incentives
• Delaying and dividing those financial incentives
• Not much transparency through the process
• Promotional materials are non-existent
• No leadership engagement

12. ACCORDING TO RECRUITING ROUNDTABLE
Best-in-class employee Referral Programs:
• Emphasize recognition and modest rewards
• Have a well-defined, transparent process
• Provide comprehensive materials to educate
employees about the positions they are we’re
focused on
• Provide a suite of emails and other materials
that their employees can uses when they
reach out to potential candidates
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13. WHAT’S NEXT?
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14. IMPLEMENTATION
Ask yourself the following questions:
• What’s the purpose?
• Is the program global or local?
• What are the tax implications involved in
offering a reward?
• What is the overall goal of having a
referral program?
• What does the administrative process look
like? How will the process work? Who will
administer the program? How are referrals
tracked?
• What positions are eligible for a reward?
• What will training look like for employees,
recruiters and coordinator?
• What does success look like?
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15. THE BRAND
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With the help of marketing you will go beyond simply a referral “policy” and create a complete
brand, including a name, a logo, and multimedia campaign. This will help spread awareness, generate
excitement, and cement the idea with your employees as a worthwhile individual pursuit.

16. THE MULTIMEDIA CAMPAIGN
WOULD INCLUDE
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• Posters around the office
• Table tents on tables in break room and conference rooms
• Screen savers and computer log-in pages
• Kickoff campaign: Pass out flyers and swag

17. EXAMPLES
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18. SHAREPOINT HUB FOR ALL ERP INFO
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• The new program should have a prime real estate on your SharePoint or Intranet so
employees have a place to go for:
– Info on how the program works
– Online submission forms and any process requirements
– “Hot Jobs”, key upcoming openings
– Description and narratives about your openings
– Reward/payout information
– Success stories
– FAQ’s
Avoid the
black hole

19. MAKE IT EASY TO SUBMIT
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employeereferrals@agile1.com

20. INCENTIVES
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• $500 for an internal referral that becomes
a hire, with that amount increasing
commensurate with the difficulty of the hire
• Payouts should be paid in one transaction
within 30 days of the start date
• Monthly or quarterly drawing to provide
“participation awards”: small gift card,
tickets, etc

21. WHAT SHOULD THIS COST
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• As consultants, we learned a long time ago that what one company can do with $100,000
would take another organization five times as much (think government). The secret to
budgeting for a world-class ERP is working backwards. Ask yourself the following:
– How many hires are projected for the next budget cycle (growth + attrition)?
– What percentage of hires would we like to generate via the ERP: 35%, 46%, 70%,
or more?
– What resources would be required in your organization?
• Estimate the cost for each resource identified and total them up.
• Now add about 20% to cover things you might have overlooked and you’ll have a decent
budget for year one.

22. 22
Overly complicated, divided
payment incentives…..
For positions requiring 0-2 years of
experience-$250 at 6-mo., $500
at 12-mo.
For positions requiring 2+ years of
experience-$500 at 6-mo., $1000
at 12-mo.
Essentially, $750 entry
Smaller, simpler, immediate, more
effective payment incentives…
$500 standard referral bonus more
for exceptionally difficult fills
A transparent process, with a central
hub so your employees know where
to go for information and resources
to make the process easier.
Before
After

23. MEASURING SUCCESS
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24. MEASURING PROGRAM SUCCESS
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You will Measure:
Source of hire
Retention by source of hire
# and % of employee referral hires
# and % of employee participation
in the program
Total cost of recruiting in major
categories (agencies, Job Boards)
Time to fill by source of hire
Which you will use to determine:
Increase in percentage of hires from
Employee Referrals
Improvement in retention for
employee referrals compared to
other sources of hire
Improvement in time-to-fill

25. THANK YOU!