How to create a world-class referral program


How to create a world-class referral program

Chris Mannion

If you're building a new team, you may first look to outsource your recruiting efforts. Although this can work for well-defined roles, the strongest startup teams usually come from trusted early referrals. There are four main reasons why:

  • Better fit to mission, values, and culture. Referrals come recommended by existing employees, advisors, or peers. They are much more likely to align with the working style and requirements of the current team.
  • Increase retention. Not only are referred hires much more likely to stay for the long term, but employees that refer their former coworkers and friends will feel more attached to the organization.
  • They have reduced costs and time to hire. Referred candidates are more likely to be engaged and accept an offer throughout the process. The process is much faster and cheaper than traditional inbound or outbound recruiting.
  • Enhanced employer brand. Leveraging existing employees, founders, and advisors to engage with their professional networks will create brand ambassadors that help boost reputation and attract top talent (and investors).

Although it can seem daunting to dedicate time to building a referral program when you're already busy making products and selling to customers, I will show you a simple process to setting up a world-class referral program.

Here's how step by step:

Step 1: Be very specific about the requirements of the role

You should make it easy for referrers to discuss your new role. 

Rather than use a generic job description and title, think through the requirements for the role. Write down what a strong hire will accomplish in their first 90 days and what skills will be needed.

(We built a great calibration tool to help; drop us a note if you're interested in early access).

Step 2: Share progress updates with referrers

Throwing referrals into a black box with no feedback is a quick way to demotivate future referrals.

Instead, keep referrers updated on their candidates' progress through the hiring process. You might send a short email highlighting when a candidate is due to be interviewed or a heads-up if you are rejecting their referral. This will also help referrers promote your company to their referrals and increase your chance of successful hiring!

Step 3: Make it very easy to submit referrals

You want your referral program to be as frictionless as possible to gather the most referrals.

Many modern tools help make the referral process easy to manage, from adding specific workflows in your Applicant Tracking System (if you have one) to creating a dedicated inbox for candidate referrals reviewed daily. Treat referrals like inbound sales requests from critical accounts, and you'll create a flywheel effect that will power your early recruiting process.

Step 4: Reward referrers appropriately

While many large companies have a fixed cash bonus attached to their referral program, you might find more success with other strategies.

A cash bonus may be appropriate for internal employees, but it gets awkward to manage external referrals. Instead, consider how to thank your referrers with personalized gifts or experiences. Sometimes, a handwritten thank you note with a personalized box of chocolates or bottle of wine will have much more meaning than a check in the mail.

Boosting success through connections

In this hyper-competitive job market, a strong referral program can help you build world-class teams and outperform more extensive and well-funded organizations. A small investment up-front will pay dividends in the long run as your employer brand and reputation improve, helping you attract more great hires with minimal outreach.

You'll eventually reach the limits of your referral program, especially when you need to hire for more specialized roles and want to diversify your candidate pipeline outside of your existing employee and advisor base.

Let us know how you get on!

Whenever you're ready, there are two ways I can help you:

1. Follow our daily content on LinkedIn

2. Signup for early access to our recruiting copilot platform

Start Your Journey with Recruit Copilot Today

With less budget, time, and resources than ever before - you need to make every hire count