Employee Referrals: 8 Smart Strategies to Tap into This Superior Source of Job Applicants for Your Credit Union

By Christine Pena-Oquist

So you’ve heard that employee referrals might be one of your best sources for quality applicants, but you’re just not quite sure how to approach it. Here are 8 ways to maximize your results:

#1 Be active, not passive.

This actually applies to all of the following tips. So often, management or HR teams roll out new programs of one kind or another and then decide after some time that they didn't work. In many cases, the real issue is that “rolling out” a program is not enough. You can’t just expect that employees will take the time to figure it all out and engage on their own. You need to actively promote the program.

#2 Track the results.

It’s been said that you can't improve what you don't measure. If you already have some sort of employee referral program in place at your credit union, you are probably already tracking who referred who, so you can pay out incentives. But what we're discussing here are some simple metrics to help you set goals for improvement.

These metrics would be "total applicants from referrals" and "total hires from referrals" by month. You might also think about a percentage metric like % of total apps or % of total hires from employee referrals. Both of these would work well. The simple acts of plugging the numbers into a spreadsheet and setting goals for improvement will keep it front and center in your mind and inspire you to find ways to improve.

#3 Focus on the employee. 

This is important in all aspects of the hiring process. If you switch the focus from HR’s and/or management's point-of-view and look through the eyes of your employees and/or applicants, you will find ways to make effective changes.

Your employees' level of engagement in your referral program is what drives its success. You could even ask them directly for feedback. Here is an article that shares some common concerns that employees have with referral programs. Can you think of ways to address those?

#4 Alert your employees about new job openings.

This one might seem obvious, but you’d be surprised how many employers don't do this. The assumption might be that since referral incentives are offered, employees will be highly motivated to regularly check their website’s career page for new job listings on their own.

This is just not realistic. You know how busy your employees are! Their first priority is to do their job well, as it should be. They’re not necessarily going to think to do something based on the hypotheticals that there might be a new job opening for which they might know the perfect person to refer. Even employees who have thought to do this from time to time, probably let weeks go between checking.

To solve this problem, just send out a mass employee email every time you post a new job. It will take you less than a minute to paste the job ad into an email and press “send.” Then, every employee will be aware of the new opening and might just have the perfect candidate “come to mind.”

#5 Make it easy.

Your employees might spend a lot of time on Facebook interacting with friends and family, but that doesn't mean that they actually know the best way to share open jobs on Facebook.

It is to your benefit to just solve the puzzle for your employees and make it super easy for them to share your credit union’s job openings. To accomplish this, all you need to do is create pre-set links that take them to Facebook with the job URL ready to share.

Here is an example of how to set up that link. Just replace the [JOB-URL] with the web address of your job.


Here is an example of what a URL would look like, and how you could make it clickable in an email:


Share this job on facebook

#6 Make it transparent.

This is important, but might seem harder to implement. It is necessary that your employees can see in real time that their efforts are paying off. While they obviously find out when one of their referrals is hired and probably get a reward a few months later, this is not enough to keep them engaged.

Employee Referrals 8 Smart Strategies Tap Superior Source Job Applicants Credit Union CUhiring

The process should be as transparent as possible. You can accomplish this by using employee referral software that will show job seekers how many clicks, applicants, and hires they have generated in real time.

This might seem like overkill for a smaller credit union. But, even our smaller company, which had around 80 employees at the time, saw a huge increase in referrals when our employees were given instant access to information about their results.

While we have our own employee referral portal, there are also companies out there that provide stand-alone software for this purpose like employeereferrals.org. You might want to look into something like that for your credit union.

#7 Compensate them.

Many credit unions don’t actually pay their employees for referrals. Their not-for-profit status makes them resistant to spending on “extras.” Remember, however, that as a credit union, your primary mission is to serve your members. One of the most important components of providing this top-notch service is having quality employees. And, employee referrals is a proven source for them.

You don’t have to give huge incentives like some tech companies in Silicon Valley have been known to. Even a $25.00 gift card can go a long way in making an employee feel appreciated for their efforts.

But, if you really have no budget, here are a few ideas for inexpensive incentives: Have a monthly drawing so you only have to give one prize each month. Get a "traveling trophy" that sits on the desk of the person with the most referrals. Give away left-over swag (like t-shirts) from your events. Ask one of your sponsors to donate a gift card. Or, even just send out a company email recognizing the employee who referred a new hire. Whatever you decide, saying "thanks" is an important part of keeping your employees engaged.

#8 Don't treat your employees like thieves.

In an effort to manage the risk of employees referring sub-par applicants just to get paid, HR professionals tend to put protective policies in place. Such guidelines often restrict paying out employee incentives until the new hire lasts 30 days or even 6 months. This mimics the setup of a 3rd party recruiter, only they get paid 15% to 20% of the new hire's first-year salary. So, in those cases, it really is justified to cover such a big risk.

While it might seem like great “business sense” to reduce the risk of paying out on a bad hire, the percentage of employees that would purposely make a bad recommendation to the organization they currently work for is very low.

It really doesn’t justify the risk of turning your employees off by treating them like you don’t trust them. Lack of trust is a common problem reaching into all aspects of employee management.

To put it in perspective, credit unions regularly pay $100 to $400 to post job ads on boards like CareerBuilder and in the newspaper without a guarantee of a single applicant, much less a guarantee that any resulting hires will last 90 days.

"Delayed payment" setups push the "reward" so far away from the actual "act" that much of the motivational factor is lost.

Hopefully, you are inspired by this list to try some new things! Come back soon for more ideas on how to improve your hiring process.

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