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How Referrals Can Increase Employee Retention And Cultural Onboarding

Sofia, Bulgaria | May 25, 2021

by Aleksiya Kokolios

According to data from Stanford University, the retention rate of employees gained through referrals is 35% higher than that of employees hired through external channels. At the same time, the research reveals that the hiring process of job candidates recommended by existing employees is 55% faster than a standard recruitment. 

Referral programs are often considered the extra mile in most companies, yet they pose the secret to utilizing the hidden internal resources of every organization. Classified as an internal method for recruiting, employee referral is a structured program that organizations use to find talented people by asking their existing employees to recommend candidates from their professional networks. Such programs are used by well-known companies such as Google, Fiverr, and Accenture, thus attracting between 40% and 60% of company employees, but are often put aside or not properly executed by smaller IT companies. 

There are different strategies for generating good referrals to reach the right people for your team. Here is what our team at BICA Services can share on the topic of increasing your brand awareness, understanding the connection between onboarding and retention, and gamifying referral programs to make them more engaging. 


The jumpstart


Referral programs are a significant part of the complex bundle that makes each organization much more efficient, if the company processes are executed properly. There are several things to be done before putting the referral program in practice:


1. Build brand awareness among prospective employees - one of the first steps in the recruitment plan for every organization must be making your company recognizable among prospective employees.  

  • Create work content to proactively narrate what it is like to be part of your company. Stress on the company culture, values and goals, and avoid overused marketing descriptions (“We are the leading IT company”).
  • Organize office tours before/after each interview and network your employees with their prospective colleagues.
  • Appoint employee ambassadors - word-of-mouth advertising is one of the best strategies for attracting skilled cadres to your company. Empower your employees to spread the word about what they do and why they like their job. 
  • Be vocal about the curriculum you build around the recruitment process - align your marketing and HR strategies by combining various expertise to prepare a quality HR referral program and promote it actively.


2. Master your pitching - while you are not a company founder that is trying to attract investment, remember that you are on a hunt for one of the most valuable things a professional has - their dedication, knowledge and skills. 

  • Present clearly the value, impact and benefits of your organization and the way the new job can accelerate a person's development. Try to individualize your approach and find something interesting for your job candidates to make them  identify with the company values. 


The steps in creating a good referral program


1. Develop a transparent procedure for the referral program.

  • Create clear and simple criteria for selecting and onboarding new employees through your referral program. This will help you avoid misunderstandings on the end of existing employees about the profile of the people they have to recommend. 
  • Choose a communication channel through which you gather all employee referrals in one place and can track the employee that referred them. This is helpful in cases when you provide employees with benefits for attracting good company fits.
  • Encourage employees to refer to specialists with whom they have worked together, rather than their friends. This can be done through requiring specifics about their joint projects.


2. Create incentives and benefits for employees to participate. Stimulating employees through a financial bonus, a gift, or a special activity for every good fit they attract to the company is a very good idea to keep them interested in contributing to the program. 

  • You can experiment with different formats to gamify the referral program - for instance, take up a leader board where the employees who have contributed the most are displayed. Another option is creating appreciation badges that grant employees, constantly involved with the program, hours off for professional or personal development.
  • Allow employees to choose their gift - have several options from which your most active employees can freely choose.
  • Combine referral programs with CSR causes - provide employees with a portion of the bonus for recommending a person, then double the rest and donate it for charity.


3. Work with your employees on mastering culture onboarding. Schedule training sessions to introduce them to the referral program criteria, the main channels of communication, and the processes to be followed. Leave time for questions and be ready to answer and provide more information. 


4. Develop an app as an internal project or take advantage of an already existing one. Apps are a far more interactive and engaging way to involve employees with the referral process. 


5. Promote the referral program among existing employees. Remind them about the project regularly by using push notifications, automated emails, and internal links.


Things to keep in mind when onboarding and developing referral programs:


1. Existing employees are often sensitive about how HR recruiters treat the people they recommended. 

  • Try being transparent with them about the process, give feedback and updates on the interview stage of their connection, etc. Sometimes, when their connection gets rejected, employees get discouraged from participating in the program. Your ultimate goal should be to avoid that by being explicit about the performance of the people they referred to.


2. The quick turnover at the Sofia IT job market - The most common reasons for quitting and reduced productivity - feeling underestimated, displaced, or having no good reason to refuse another proposal.


Onboarding the right way


According to statistics, 17% of IT employees leave their job in the period between their first week and third month in the company while 33% choose to quit before their probation period ends. Apart from introducing new employees to how the company works and what their work duties are, it is of vital importance to install the organizational and workplace culture in newcomers. Representing a step towards complete integration, cultural onboarding has proven to increase employee satisfaction and retention rates.

  • Create an individual approach towards every new employee and adjust the speed and intensity of the onboarding process to make it less stressful for the person to get used to the new environment.
  • Organize the very first days of every employee in an interactive way, combining meetings, learning sessions, and networking. Make sure to create a balanced schedule that also allows the newcomer to take some time and digest the information.
  • Utilize your knowledge about the new employees to keep them- what are they interested in and how can you help them develop in that respective niche? 
  • Develop an engagement plan that starts from the moment you send the job offer. Have discussions with the employee at stake and start with the cultural onboarding process as soon as possible.
  • Organize informal meetings with the team members - meet them individually with existing employees, in an informal environment where they can talk about work-unrelated topics.


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