What is a Job Referral and Why Do They Matter?

December 29, 2016 Deb Broderson

What is a job referral and why do they matter?

Job referral is just another term for an employee referral.  Employee referrals, and employee referral programs, help companies recruit new employees at a lower cost and with greater speed.  In addition to clear cost benefits, Employee Referral programs also increase the engagement levels of people already working for your organization. 

Be aware, not all Employee Referral Programs are equal

Wait, I hear it now.  You are thinking, “We have an employee referral program, so we’re okay.” Not so fast.  Think of it this way, just because all cars have four tires and a steering wheel, does not make them all the same. For legacy referral programs, some of which have real challenges, that analogy is also true. This leads to less than stellar participation rates.

To better understand why, let’s look at some core design and execution flaws in many employee referral programs.

  • Many companies just use web forms and/or emails for their infrastructure and that is probably adequate for a small company. However, in a mid-to-large size Employee Referral Programs, you need both infrastructure and automation to facilitate success of the program. Without a strong back-end solution, the program management will become unwieldy and the lack of analytics will limit your ability to make smart, data-driven decisions.
  • In addition to technology, there are some consistent challenges with the potential of derailing your program. When these occur, participation rates decrease and your ability to achieve the desired engagement levels and ROI will diminish.

Not sure what people in your organization will think about a new employee referral program or a revamp of the current one?  Survey your potential participant universe. Consider launching surveys to specific audiences and gather their input. 

Knowing why people aren’t participating is just as valuable as knowing why they are participating. If you have a current program you can ask:

  • Prior referrers who haven’t referred within a specific period
  • Current referrers
  • Non-participants

Don’t currently have an employee referral program?  Then think about sending a survey to target departments with significant hiring needs.  Find out what they think. 

For organizations aspiring to be a top performer in your industry; there is a direct connection between hires from referrals and job performance.  A strong Employee Referral Program will improve retention rates and decrease the cost per new hire.

Looking for more information about Employee Referrals?  Check out our resources.

About the Author

Deb Broderson

Deb Broderson comes to Perks with 30 years of diverse experience leading channel marketing, marketing operations and program management teams within the technology industry. Deb has provided strategic direction to Fortune 500 clients, developed and executed global, multi-channel, go-to-market strategies and created worldwide field marketing organizations. Deb has worked on both the agency and client-side of the business, providing a well-rounded perspective to client challenges. Deb was honored as one of the Top 50 Channel Chiefs in North America by CRN.

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