How to analyze the success of your employee referral program
Organizations recently have realized the importance of data in driving the success of employee referral programs as data analysis helps in making informed decisions regarding the elements of the employee referral programs which are worth keeping and ones which are not. All employee referral programs need to be tweaked over time to increase their effectiveness and analyzing data helps to determine the nature and extent of tweak. With employee referral programs going online, data is much more readily available in a format that makes it easier to analyze and interpret.
Having data at hand, however, does not serve a purpose unless you have clear performance indicators outlined to measure the success of your employee referral program. These performance indicators have to be in line with the organizational objectives relating to hiring and recruiting goals and budgets to ensure that employee referral programs are aligned to business objectives. Tracking the success of your employee referral program against measurable performance standards ensures that the employee referral program does not get side tracked from its original objective and remains relevant both to the organization and employees. Given below are some key indicators widely used by most organizations to analyze the success of their employee referral programs.
1. Employee Participation Metrics
Most organizations have defined targets around employee participation in their employee referral program. A low participation rate indicates low popularity of the employee referral program among employees which again could point to lack of quality communication regarding the program and its benefits to employees. Engaging Employee in the employee referral program is essential and having low rate of participation are signs of potential trouble which need to be immediately assessed to ensure the program remains successful.
2. Employee Referral Turnaround Time
Measuring turnaround time is critical to the success of the employee referral program as lack of responsiveness of the HR and Recruiting team is one of the primary reasons why employees fail to refer. Metrics for measuring turnaround time include:
• Time taken to respond to employee referral mails
• Time taken to screen and contact employee referred candidates
• Time taken to schedule an interview
• Time taken to roll out an offer
• Time taken to update employees on the status of their referrals
3. Performance of Employee Referral Hires Vs. Other Hires
It is important to measure the performance of employee referral hires against set performance standards as well as against performance of hires from other sources to assess whether employee referral hires turn out to be better performers than other hires. Metrics to include performance can include:
• Time taken to move from training to operational mode
• Average per day productivity measured over a week or a month
• Rate of attrition of employee referral hires against non-referral hires
• Voluntary versus involuntary turnover of employee referral hires compared to non referral hires
4. Employee Referral Program ROI
This is one of the most important indicators of success as it helps the assessment of the cost factor, time and effort of the program compared to other recruiting sources. The metrics to watch out for include:
• Percentage of all hiring through employee referrals
• Percentage of key jobs filled in through employee referrals
• Cost per hire
• Applicant to hire ratio
• Interview to hire ratio
• Percentage of diversity hire
5. Employee Referral Program Satisfaction Metrics
It is important to measure the satisfaction index of an employee referral program to understand which aspects go down well with employees and which aspects need improvement according to employees. A survey with a few well chosen questions on employee referral programs can help you get a good understanding of how the referral program is perceived among employees and what measures will help improve the image of the referral program in the eyes of employees.
6. Employee Referral Program Reward Effectiveness
Reward program is central to the success of the employee referral program which is why it is important to assess whether the reward program is actually succeeding in motivating employees to refer good candidates. Measuring the effectiveness of the employee referral reward program includes measuring:
• Which employee referral reward initiative drew maximum referrals and which drew the minimum referrals?
• How many employee referral rewards have been claimed so far?
• Employee referral reward as percentage of compensation offered for the open position?
• Per hire reward cost versus cost of hiring through other sources
7. Performance of the Employee Referral Tool
While evaluating the success of the employee referral program it is also important to determine how well the employee referral tool is performing vis-à-vis its objective. Measuring the performance of the employee referral tool helps you gauge whether the tool needs to be modified to make it more effective.
Organizations these days can very easily analyze the success of their program with the help of specialized employee referral tools like ZALP. Using technology to streamline processes can go a long way in contributing to the success of any business initiative.
Filed under : HR Trends
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