This document discusses trends in employee referral programs from a 2014 benchmarking survey. It finds that 71% of companies have a formal referral program, with 86% planning to launch one. Referrals make up over half of external hires for 38% of companies. The top goal of programs is to increase candidate quality. Centralized management is most common. Cash incentives are prevalent, though non-cash incentives are growing. Social referrals using third party tools are an increasing trend, as is expanding programs to include non-employees like customers and alumni. Effective programs make referrals easy and recognize participating employees.

1. Innovations
in
Employee
Referral
Programs
Kara
Yarnot,
Founder
&
President
recruitDC

2. Imagine………
2
MERITAGE TALENT SOLUTIONS’
EMPLOYEE REFERRAL
TRENDS REPORT
2014

3. 3
BENCHMARKING
PROGRAM STRUCTURE

4. Who Has Formal Employee Referral
Programs?
of companies report
having a formal
employee referral
program
71%
4
86%
plan to launch a
program in the next 18
months.
36%

5. Referrals Continue to be a Primary Source of
Hire for Employers with Referral Programs
5
% of External Hires that are Referrals
27%
0 - 25%
26 – 50%
51 – 75%
76 – 100%
Don’t know
47%
38%
4%
4%
7%
of companies with referral programs
report that more than half of their
external hires come from their
referral program.
8%
of companies report meeting or
exceeding their referral program
hiring goals.
25%
of companies don’t actually have
hiring goals for their program25%

6. 6
Increasing the Quality of the Candidate pool is
the top goal for companies.
GOALS OF REFERRAL PROGRAMS
10%
0%
30%
20%
50%
40%
70%
60%
90%
80%
100%
Increase Quality Increase Quantity Decrease Time
to Hire
Increase Retention Increase
Diversity
Other Don’t Know
Currently have program
Planning to launch program
93%
67% 61%
36%
58%
27% 27%
49%
32%
18% 9%
2% 2%

7. Referral Program Structure
REFERRALPROGRAM MANAGEMENT
Centralized
program
management is the
most common
management
structure.
76%
64%
Centralized
70%
60%
50%
40%
30%
20%
10%
0%
80%
9% 0%
16%
9%
27%
Decentralized Hybrid Not yet
decided
Currently have program
Planning to launch program
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8. 8
Tools Used to Manage Program
Currently have
program
Planning to launch
program
64%
55%
50%
18%
14%
27%
3%
0% 18%
Spreadsheets ATS 3rd Party Other Not
Decided

9. 9
Referral Program Incentives – Cash is King
of companies offer
or plan to offer cash
incentives for
referral hires.
59%
Cash awards to
employees for referral
hires are the most
common incentives
employed.
Average Cash Incentive Paid for Referral Hires
Less than $1000
26%
73%
69%
2% 0%
18%
4%9%
$
$
Currently have program
Planning to launch program
Between $1000 and
$4999
$5000 or greater Don’t know
18%

10. 10
Thinking Beyond Cash
of companies offer or plan
to offer non-cash
incentives for referral
hires.
25%
54%
Prize
Drawings
35% Others
27%
Company
Logo Items
15%
Vacation
Days

11. 11
Referral Program Enhancements
Social Referrals
Mobile
Accessibility
Improved
Marketing
Non-Employees
Improved
metrics
Complete Overhaul

12. 12
PRIMARY REFERRAL PROGRAM
TRENDS IDENTIFIED

13. 13
Social Referrals - Driven by the
implementation of 3rd party
Referral Technology
TREND # 1

14. Types of Social Referral Tools
Broadcast
Broadcast
&
Discovery
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15. 15
All of the 3rd party referral
tools are based on social
referral functionality.
Companies
planning to launch
referral programs
are more likely to
use 3rd Party
Referral Tools.
Currently
have
program
14%
Planning to
launch
program
27%
27%
3rd Party Referral Tools

16. How Satisfied Are You With Your Current
Referral Tools?
SATISFACTION WITH CURRENT REFERRAL TOOLS
16
of respondents who are Very
Satisfied use a 3rd party
solution.
Very
Satisfied
Partially
Satisfied
Neither Satisfied or Dissatisfied
Partially Dissatisfied
Very
Dissatisfied
of respondents who are Partially
Satisfied use ATS Solution,
63%
83%

17. 17
Moving Beyond the “Employee”
Referral Program
TREND # 2

18. 18
Individuals Beyond Employees Included
in Program
Customer
48%
100%
Social Media
Connections
48%
60%
Other
26%
20%
Alumni
70%
80%
Planning
to launch program
Currently have
program
Vendor
35%
40%
of respondents with programs already
include non-employees in their programs.
22
%
An additional 17%
plan to expand their
programs to include
non-employees.
17%
of respondents planning to launch
programs with include non-employees in
their programs.
45
%

19. Keys
to
an
Effective
Program
• Make
it
easy
for
employees
to
refer
• Educate
your
employees
one
what
makes
a
good
hire
• Get
execuOves
involved
• Thank
everyone
who
parOcipates
• Avoid
the
“black
hole”
-­‐
provide
updates
• Recognize
individuals
with
referral
hires
• Pay
bonuses
when
the
new
hire
starts
• Track
and
report
referral
metrics
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20. 2015
REFERRAL
SURVEY
IS
NOW
OPEN
Hand
me
your
business
card
and
I’ll
send
you
the
link
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21. THANK
YOU
Kara
Yarnot
President,
Meritage
Talent
SoluOons
@klyarnot
LinkedIn.com/in/karayarnot
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