Although referral programs can provide a valuable source of new workers, many employees are reluctant to provide referrals because they’re afraid that they’ll take the blame if the new hire doesn’t work out.
Here are a few ways to reduce this fear:
Provide a worthwhile financial incentive for referrals. Money can do wonders to overcome the fear of embarrassment.
Consider a mix of contests, raffles, etc. in addition to cash making referrals more fun and competitive.
Think in terms of the new employee’s “lifetime” value. If a worker can earn the company $50K per year for an average of three years, how much would you be willing to invest to get this return? If you pay recruiters 10% to 30% of the new hire’s annual salary, does it make sense to pay an employee only 1 or 2% for a referral?
Space out the referral bonus in quarterly payments, based on specific benchmarks. For example, you can give an initial payment for the referral, a second if the employee is hired, another one at six months, and the final one on the new hire’s anniversary date.
Train employees on how to approach prospects and make it easy for them to tell the prospect your company story. Give them a pamphlet, some type of document, or a web page link that defines the business and the opportunity the position offers the prospect.
Finally, measure the program’s results on a regular basis so that you can keep improving it.