3 Employee Referral Program Pitfalls that will Sink Your Efforts

Avoid these common pitfalls and your employee referral program will sing!

Like any well meaning employee related program, employee referral programs will experience pitfalls if action isn’t taken to prevent shortcomings.

It all starts out so nicely, human resources sets up a referral system, chooses rewards, launches an in-house marketing campaign, and then waits for new applicants to come rolling in, except no one applies.

What went wrong? What can you do different as you launch your own employee referral program?

For starters, the biggest pitfall is not strategically planning and launching your program. Instead of investing some time upfront to identify the best guidelines, rewards, and encouragement to participate, companies do the bare minimum.

But like anything else in life, if it’s worth doing once, it’s worth doing right, and that includes your employee referral program.

Be careful in your planning to consider these pitfalls as well:

Lackluster Rewards

The saying “everyone loves money” indicates it’s easy to please anyone by simply giving them money, but in reality it’s not that simple. The first pitfall here is a small reward of $100 for a referral that is hired. Not only is this not enough to encourage most professionals to dig into their personal networks, but it also isn’t enticing when other rewards sound more beneficial.

In this slideshare by RolePoint you’ll see several suggestions that include services and opportunities that would motivate people to participate just to get the reward.

  • Gift cards – Starbucks, Amazon, gas
  • Sports programming and tickets
  • Spa treatments or luxury amenities

Along with unconvincing rewards, there are often troublesome guidelines about collecting the rewards. Since hiring can be a lengthy process, it’s likely to take months from the time someone is referred and they start their position. If people are expected to wait months for the reward they won’t be anxious to participate. Make sure rewards are handled in a timely manner, as soon as the new hire is signed.

No awareness

If a company is prepared to pay $500 for a referral, it seems employees would be lining up to share their friends and family… not really!

The average referral program is mentioned to employees 1-2x per year, assuming that if they were interested they would address management to ask more about it. But they don’t ask, most employees won’t even consider sharing openings with friends and family, unless they are asked to.

Instead of sending the occasional email reminder that the company is hiring, make it a point to schedule marketing campaigns for your referral program a few times a year. Host a lunch in the employee cafeteria, give away promotional material, hold a drawing for the most referrals (on top of other rewards), and make sure you recognize your biggest referrer.

When employees see the effort you put into the program, they’ll feel better about referring others, and will take steps to earn those rewards, so make sure the program is mentioned often and given it’s due attention.

Ease of Use

Humans avoid difficulty, it’s in our genes, we don’t want to deal with anything that puts us out of our comfort zones. When you set up a referral program, it should be as effortless as possible for both the applicant and the employee. There are several ways to make this painless, from using a software program like our own, to handing out applications that already include reference numbers on the forms.

You’ll also want to make the entire process seamless, when someone has been referred they should receive updates about the candidates (taking into privacy laws where necessary). The employees will want to know when they’ve earned a reward and possibly how to get more candidates in the door. Greenhouse.io has a short, but useful article that discusses giving out rewards for just getting referral applications, it’s a great way to encourage employees to keep working on bringing in referrals.

Plan Ahead

Before launching take the time to consider employee referral program pitfalls, chances are your human resources department and other management offices will have some opinions in how it should be run, they may even have suggestions from past experiences which are always valuable. But the biggest tip you need is to plan ahead to give your program the best chances of being successful.

Alen
Bubich
Founder
Ready to Turn Prospects into Customers?
 
I'm a software developer by trade with over 15 years of experience. Over the last five years I've been bitten by the entrepreneur bug. Plenty of late nights, coffee runs and day-old pizza.
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