The Employee Referral Strategy That Will Burst Your Hiring Pipeline

September 14, 2015 at 11:35 AM by Rob Stevenson


It's no great secret that the best source of hire is sitting right next to you. Referred candidates are more likely to get hired, more likely to stick around, and more likely to fit in with the team. By now, you've certainly instituted a program to incentivize your team to refer as many candidates as possible. While throwing some cash  in the event of a full-time hire will certainly yield some dividends, there's a more wholesome program you can institute that will result in many more submitted candidates.

When you set the success metric as the hire, you limit your team to think only about that single stage of the hiring cycle. If you want to make offers, you need on sites, and if you want on sites, you need phone screens. The strategy I here promulgate works because it encourages and rewards your team for their submissions regardless of how far the candidates make it through the funnel. 

The issue with only rewarding your team for their hired referrals is that it forces them to think only of candidates who they're certain can progress all the way through the funnel. This is problematic because it encourages people to filter out candidates on their own. For example, I might hold off on referring an engineer friend of mine because I'm not certain she could advance all the way through our hiring process, but the truth is I'm not qualified to make that assessment. Although she might be worth a phone screen, I have no incentive to present her as a candidate if I think that's as far as she can get. Instead, it makes sense to encourage me to refer as many candidates as possible by rewarding me regardless of how far they make it.

Of course, you can't be passing out cash for every single phone screen, but once a single team member has passed along a certain amount of candidates, doesn't it make sense to reward them?

First, set up a point value for each stage of the hiring funnel. For example:

Phone screen: 5 points

On site interview: 10 points

2nd round on site: 15 points

Offer made: 20 points

Full time hire: 30 points

Now, award your team member the point value commensurate with the furthest stage their referral progressed. Your team then begins amassing points based on multiple referred candidates. Set a point value upon which to dole out rewards, say, $1000 per 30 points, or $5000 in the event of a full time hire. Put another way, would you pay $1000 for 6 quality phone screens? I've got news for you--if you're utilizing job boards or external recruiters, you already are.

Our friends in the space who are heading up recruitment at their respective companies report that this strategy builds a far more robust pipeline than merely rewarding for full time hires, and, just as importantly, doesn't end up costing them any more than the flat $5k hire bonus. 

Do you have any unique strategies for increasing referrals? His us up in the comments!

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