Employee referrals are a highly effective way to hire new employees. They tend to be the most cost-effective and fastest method, with referred candidates typically taking an average of 29 days to hire and onboard, compared to 39-55 days for candidates sourced from other sources. Referred candidates also tend to outperform and have longer tenure at the company, with a LinkedIn study finding that they are 15% more likely to stay with the company for at least three years. Given these benefits, it is not surprising that many companies seek to increase their employee referral numbers. In this article, we examine the strategies and practices of successful companies that have implemented effective employee referral programs without increasing headcount or overhauling their recruitment team. By examining their philosophies, techniques, and incentives, we hope to provide actionable insights that can assist companies in improving their own referral programs and utilizing the potential of their entire workforce as recruiters.

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Salesforce

Salesforce is a company that has successfully implemented an employee referral program as a key part of its recruitment strategy. According to a study by Fortune, 52% of new hires at Salesforce come from referrals by current employees, which is a testament to the effectiveness of the program. To incentivize employee participation, Salesforce offers a cash bonus of $2,000 for every successful referral, which has resulted in employees collecting a total of $7 million in bonuses. In addition to financial incentives, Salesforce has a process in place to review and contact referred candidates within seven business days and has an app that allows employees to track the status of potential hires.

To further encourage employee involvement in the referral program, Salesforce hosts Recruitment Happy Hours where team members can invite friends they want to refer. This provides a fun and informal way for recruiters to get to know potential candidates and build relationships, even if the candidate is not immediately interested in the opportunity.

Diversity and inclusion are also important values at Salesforce, and this is reflected in the employee referral program. The company has an Office of Ethical and Humane Use of Technology that works with employees and policy experts to craft policies that promote ethical and humane use of technology.

Salesforce's employee referral program is a key part of its recruitment strategy and has contributed to the company's success in attracting top talent. Its focus on diversity and inclusion, along with its financial incentives and efforts to build relationships with referred candidates, make it a successful case study for companies looking to implement employee referral programs.

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GoDaddy

GoDaddy is known for its innovative and effective employee referral program, which has helped the company source around one-third of its corporate employees through referrals. In an effort to further enhance its program, GoDaddy recently decided to add LinkedIn Referrals to its recruitment strategy.

To encourage widespread participation in the referral program, GoDaddy took a unique approach to market it to its employees. In addition to traditional methods such as posting recruitment messages in code and turning recruiting into a friendly competition, the company also distributed hand-held mirrors to its employees with the message that everyone at GoDaddy is responsible for recruiting and should be referring great candidates, not just the recruiting team.

The creative marketing efforts have paid off for GoDaddy, with the company's employee referral rate increasing from 17% in 2014 to 33% today. This success is even more impressive considering that GoDaddy reduced its referral bonus from $3,000 to $1,000. The effectiveness of hiring through referrals and GoDaddy's innovative marketing strategies have helped the company attract and retain top talent.

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YMCA

The YMCA of the Triangle, a large organization that hires thousands of employees every year, was struggling to efficiently fill its open positions. Its applicant tracking system was not able to support employee referrals, and the process for submitting and tracking referrals was cumbersome and unreliable. In addition, the YMCA offered different rewards to different employees without any centralized management or controls, which caused confusion and added to the workload of the human resources department.

To address these issues, the YMCA partnered with a company that specializes in designing and implementing effective employee referral programs. Together, they developed a strategy that utilized an automated chatbot to send email and text message campaigns to employees, inviting them to refer qualified candidates for open positions. As an incentive, the YMCA offered a $25 Amazon gift card to employees whose referrals were successful.

The results of this program were impressive. After using multiple sources for recruiting, the YMCA found that employee referrals were not only their top source for total hires but also their top source for quality hires. Research has shown that employee referrals tend to outperform hires from other sources, such as job boards or recruiting agencies. They are hired faster and tend to remain employed longer.

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Intel

As a leading technology company, Intel has always been at the forefront of innovation and finding new ways to improve its business. In recent years, one area where Intel has made significant progress is in its employee referral program.

Traditionally, employee referral programs have been an effective way for companies to source top talent, as referrals tend to be more qualified and have a higher retention rate compared to candidates sourced through other channels. However, Intel faced the challenge of wanting to diversify its workforce while still relying on employee referrals as a primary source of hires.

To address this issue, Intel implemented several strategic changes to its employee referral program. First, the company doubled its referral bonus for staff referring diverse candidates, offering $4,000 to employees who refer a woman, minority, or veteran and successfully get them hired.

In addition, Intel made diversity one of the strategic performance goals that determine 50% of an executive's annual cash incentives. This not only incentivizes executives to prioritize diversity in their hiring decisions but also holds them accountable for achieving diversity targets.

The results of these changes have been significant. By making diversity a key focus of its employee referral program, Intel has been able to increase the representation of women and minorities in its talent pool, helping the company become more diverse and inclusive.

Intel's success with its employee referral program highlights the importance of setting clear goals and incentivizing employees to prioritize diversity in their referrals. By taking a proactive approach, companies can use employee referral programs not only to attract top talent but also to create a more diverse and inclusive workplace.

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Phillips

Philips is a company that operates in the health technology and lighting industries and has implemented a successful employee referral program using technology. The company used various platforms, such as Skype and online forums, to gather information from employees and external candidates in 22 key countries to tailor its global employment brand to local audiences. As a result of this process, Philips saw an increase in employee referrals by about 30%, an increase in career site visits by about 20%, and a rise in awareness and willingness to explore a career at the company among new target audiences. The program also resulted in a reduction in time-to-fill and cost-per-hire and an increase in the quality of applicants.

In order to attract a diverse range of candidates, Philips' employer branding team used technology to communicate with external candidates and current employees to assess the perception of the company's employer brand and bring its employment promise to life through an online talent community. The employer branding team worked closely with talent acquisition and human resources to ensure buy-in for the process and to define the types of candidates the company should be targeting.

Philips' technology-driven employee referral program has been successful in attracting and engaging a diverse range of candidates, as well as improving key talent acquisition metrics. By leveraging technology to communicate with both internal and external stakeholders, Philips has been able to effectively tailor its employment brand to local audiences and promote its career opportunities to the right candidates. This case study serves as an example of how companies can use technology to enhance their employee referral programs and attract top talent.

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Pinterest

Pinterest is a leading social media company that has made a concerted effort to increase diversity within its workforce. As of July 2015, 79% of Pinterest's tech workers were male and the majority were either white or Asian. In an effort to change this, the company set a goal to increase the hiring rate for full-time engineering roles to 30% female and to 8% male for people who are from "underrepresented ethnic backgrounds."

To achieve these goals, Pinterest implemented a number of strategies, including a partnership with Paradigm, a consultancy firm that focuses on diversity. The company also set up a task force made up of employees from various departments to identify and address potential barriers to diversity within the company. Additionally, Pinterest challenged its employees to refer more candidates from underrepresented backgrounds and saw a 24% increase in female referrals and a 55-time increase in the percentage of referred candidates from underrepresented ethnic backgrounds as a result.

Pinterest has also made efforts to broaden its recruitment efforts by recruiting from a larger pool of colleges and launching an apprenticeship program and an early identification program. The company has also hired a Head of Diversity to lead these efforts.

Pinterest's efforts to increase diversity within its workforce have been successful, with employee referrals playing a significant role in their success. By setting clear goals and implementing strategies such as challenging employees to refer diverse candidates, Pinterest has been able to significantly increase the diversity of its workforce and improve its employee referral program.

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Conclusion

Employee referral programs are a valuable tool for companies seeking to hire top talent in a cost-effective and efficient manner. By leveraging the networks and connections of their current employees, companies can tap into a pool of pre-vetted candidates who are more likely to be successful and stay with the company for the long term. Successful companies such as Salesforce and GoDaddy have implemented effective employee referral programs by offering incentives, building relationships with referred candidates, and creatively marketing their programs to employees. By examining the strategies and practices of these companies and incorporating actionable insights, organizations can improve their own employee referral programs and utilize the potential of their entire workforce as recruiters. In short, employee referral programs are a win-win for companies and employees alike, making them a valuable asset in the quest to attract and retain top talent.

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