How to Acquire Quality Employees Through an Internal Referral Program

Do you take pride in hiring only the best people for your company? I’m sure you do, of course. But what would you do when you suddenly need to increase your headcount by 200%? How about 1000%? Can you still hire only the best while supporting a quickly growing business?

Keeping Your Culture While Increasing Headcount

This is the same question that Tim puzzled over when he needed to hire more people for his company. He’s the CEO of a fast-growing software company. After a couple of years in the business, the company experienced a sudden rise in demand.
“It all came crashing down!” Tim exclaimed in excitement. “One day we were just fixing bugs. The next we were getting tons of orders, emails and support requests!” The demand for their software was so high that their small team of five people couldn’t handle all the work. As a result, the company needed to increase the team tenfold to cater to the growing number of customers.

“It was a defining moment for our company,” recalled Tim. He talked about the need to step up their game to keep customers coming back. They had to create migrate servers, improve customer support, and fix the rising number of bugs. Tim shared, “It was clear that we needed more people. Immediately.” Tim wanted to expand his team quickly to handle the increasing amount of work, of course. But he also wanted to keep the company culture intact.

He knew that hiring too quickly would ruin the rapport and cohesiveness of a software dev team. He knows how hiring fast ruined a some of his friends’ companies. Even so, the need to get work done prevailed. Tim advertised job posts on newspapers and radio stations. He made use of job boards. He asked his employees to refer people who fit the job description.
Would Tim be able to keep his company’s culture despite a quick rise in employees?

Benefits of An Internal Referral Programs

There are three common ways on how to hire people:

• Job boards like Jobstreet and Craigslist
• Traditional job posts in newspapers, radio, etc.
• An internal referral program

Of the three methods, the internal referral program is unique in that:

1. You do not have to advertise your job post to the public like in job boards and traditional job posts. This means competition won’t be clued in to your expansion efforts. It also helps filter unfit applicants, a problem that plagues public job ads.
2. You already have a mutual connection with the referred candidates. So, you find out more about the person, far beyond what his or her resume says. Then, you discover their ability to work in teams, how well they communicate, and how fast they learn based on what your referrer says about them.
3. Your employees are active in the hiring process. They will see that they are partners in helping grow the company and their teams. Not only that, most employees only refer people they want to work with, which makes it easier to build cohesive teams.

Statistics also show that referred employees are better for your company in terms of retention and productivity. According to studies:

• 46% of employee referrals stay at their job for three years or more, while only 14% of those hired from job boards stayed.
• Referred hires start their jobs faster at only 29 days after being accepted. Compare this to job board hires who start after 39 days.
• Referred employees produce 25% more profit versus employees hired from other methods.

Tips for Creating An Internal Referral Program

1. First, organize a team that will handle all the referred candidates. This way, all the employees have to do is to give the contact information of their referrals to the team. Otherwise, if you give the employees more work they will shy away from referring anyone at all!
2. Give employees a run-down on how the system works. Tell them what kind of people the company is looking for. Go through the process of hiring in clear bullet points. Most importantly, explain the rewards you offer to people who refer successful applicants.
3. Keep employees engaged and updated. The only way to encourage employees to take part in this program is to make them feel a part of it. Inform them if there are any open jobs. Notify them through emails, bulletin board posts, even through custom referral cards.

When they do make referrals, update them with the progress. Send a quick notification about where their referral is in the application process. Don’t forget to send some small appreciation for the referral. Even a small thank you note is enough.

4. Widen your referral sources. Get referrals from past employees, stakeholders, clients, suppliers and partner companies. Don’t limit your sources to your current employees.
5. Publicize successes. When someone’s referral is hired by the company, announce it in the company blog, Facebook page, emails, bulletin boards, the works. This encourages people to refer even more when they see success stories.
6. Provide feedback. If the employee’s referrals didn’t get in, tell them why and how they can send better applicants. Help them help you by pre-qualifying your requirements for a better candidate match.

 Get Better Employees By Using A Internal Referral Program

This is what Tim found out later. “In the end,” he shared, “I did manage to get the number of people I needed for the job.” But he never expected that people hired from different sources could spell a difference.

“It surprised me!” He said. “In as little as a month, I was starting to see a trend in the types of people I hired through the different avenues.” He shared about the observations he made with regards to the quality of the hires.

“I noticed that the people I hired through employee referrals were different.  Compared to the employees I hired using job ads and job boards, they were more into it.”

At the end of the day, the future of the company does not need to rest on you alone. Keep in mind that no individual effort can ever beat the power of good teamwork.