Why Focus on Referrals
If you’re reading this article, it’s likely you already know the value of referrals for your staffing agency. You may already know that referrals deliver higher quality talent to your customers at a lower cost. In fact, many firms say they’re the best source for quality candidates:
- Staffing Industry Analysts says referrals are the most reliable way to source new candidates.
- A recent Jobvite study found that referrals were the second most effective source of new hires, second only to internal candidates. Referrals are 5x more effective than average hiring avenues.
- Avionte emphasizes that candidate referrals cut down time to hire.
So, let’s dig into how getting more referral candidates can help you remain competitive and focused on candidate experience, all while scaling faster.
You can grow your candidate pool faster (and smarter) with referrals
According to a study by HR Technologist, employees sourced via referrals move through the pipeline 55% faster than those sourced through career sites. Think about the impact this could have on your business. In today’s market, with demanding clients, tight timelines, and talent that disappears from the market in a flash, reducing your time to hire could be the difference between thriving and just surviving. To top it off, referral candidates tend to stick around longer than non-referral candidates. Companies with referral programs average a 46% retention rate compared to a 33% retention rate in companies that hire primarily from career sites. Not only are you getting hires through the door faster, but you’re also getting talent that fits with your business better.
You’ll save time over cold outreach
Your candidates and your recruiters are inundated with information. Top talent gets buried with emails and their voicemail boxes are stuffed full of calls from recruiters that they never return. The majority of the people reaching out to them are annoying strangers. And we all know that they’re used to recruiters promising the moon and delivering a pebble. So, it’s going to take a whole lot to break through all that noise and get their attention. For your recruiters, the scene isn’t much better. They’re wading through candidates, many of whom are unqualified or a poor fit for the job. Even when they land on an ideal match, the odds of getting through to the talent are not at all in their favor.
- The average response rate to a cold call in the staffing industry is 1-3%.
- The average response rate to a cold email in the staffing industry is 1-3%.
- Text fares better much better with an average response rate of 35-45%, but those responses may often be a simple “not interested.”
You’ll improve the candidate experience and establish trust.
Candidate experience is now the hallmark of the staffing industry. And, let’s face it, in the past, staffing firms dropped the ball with establishing trust with their candidates. With a strong referral program, you can show your talent that your firm is a step above the rest — that you keep them and their happiness at the center of all you do. Here’s how referral programs show you care:
- Show candidates that you value their input on talent.
- Prove to them that you stay true to your word by rewarding them with bonuses for helping you get new hires.
- Build deeper relationships with candidates by partnering with (and impressing!) people from their network.
Why Use a Digital Referral Program
Turn your entire workforce into recruiters for your firm
If I asked you to think of as many people as you could off the top of your head who would make a fantastic graphic designer, you likely wouldn’t come up with more than a couple names. Perhaps your mind would turn to people who showed up recently in your social media feed or those who have done graphic design work for you in the past. Now, imagine that you put a call out on social media for a graphic designer. Friends and friends of friends, coworkers you hadn’t thought of in years, acquaintances whose career path you might not even be familiar with — you could reach all of them with your post. You’d likely generate a far more substantial list of graphic designers. This is the difference between traditional referral programs and digital referral programs. Traditional referral programs often rely on your recruiters to ask candidates to think of people to refer. These programs work, but by nature, they curtail your reach compared to a digital referral program. With a digital referral program, every contact in your database, every person your team is in contact with — from your passive candidates to your past candidates, from your silent subscribers to your active workers — becomes a potential recruiter. When your audience becomes brand ambassadors, they recruit from their network for you. You essentially turn your contractors into a recruiting workforce. They give you access to their past coworkers, their talented acquaintances from high school, and the friend of a friend with just the skills you’re looking for.
Track your referral leads automatically
How does your team currently track their referral leads? Perhaps they have a spreadsheet of candidates they’ve spoken to about referrals. Or maybe they make note in your ATS of referral requests. The problem with these common methods of referral tracking is that they rely on your recruiters’ memories and on manual processing. If your firm is like most, this manual tracking comes with a lot of problems. Without a fail-safe tracking system, your busy recruiters may let referrals slip through the cracks without even realizing it. Failure to follow up or reach out to the right candidates means that your team may be leaving talent (and revenue) on the table. Many candidates report that staffing firms are unreliable when it comes to following through on referrals. Manual tracking means your data is less reliable as a single source of truth, which can lead to frustrated or angry candidates. If your candidates don’t believe they can reliably benefit from your referral program, many will opt not to use it at all. A digital referral platform solves these problems. Automated tracking gives you clear insight into who has heard about your referral program, who has shown interest, and who has recommended talent to your agency. Your team will never have to hunt down conversations, comb through texts, or compile notes from your ATS to solve a referral dispute again. Automated tracking also gives you clear insight into which recruiters source referrals most efficiency. You can use this information to improve messaging, refine outreach tactics, and incentivize success.
Consistent promotion across all recruiters
Once you have clear insight into what referral tactics work best for your audience, you can easily standardize promotion, messaging, and process across all your recruiters with a digital referral platform. Your recruiters will no longer have to reinvent the wheel. By using templated messages and consistent promotions across all channels — from your website to your social media accounts — you can ensure that every candidate receives the same information and incentives. How do you make sure your team is doing all they can to generate referrals? We’ve built out a list of best practices that you can start implementing today.
15 Referral Marketing Best Practices
Here are our data-backed tips on how to build a successful referral program.
1. Know your audience
Before starting a referral program, do your homework. Use your knowledge of your candidate base to give your audience what they want. Think about the messaging, benefits, and values that your candidates respond to and use that to inform your referral program:
- Do your candidates gravitate towards short assignments? Be mindful of how steep your pre-bonus work requirement is. If you require 6 months of work before anyone gets a bonus, it might be a barrier to getting more referrals.
- Do your candidates prioritize pay above all? If so, referral bonuses that are too low might send your audience walking.
- Do you work with candidates in multiple verticals? Consider job-specific referral programs that cater to the needs of different audiences. A travel nurse may respond to different messaging than your light industrial workers.
- What is your expected margin on contracts for each position? You may want to adjust referral bonuses based on your expected ROI.
2. Investigate your competition
Examine your competitors’ referral programs, bonus rates, and even the language they use to engage their network. Imagine that someone works both for your company and for a competitor — how do you make sure they send their friends and colleagues to you? Try the following:
- Match or beat your peers’ incentives.
- Investigate the structure of your most successful competitors’ referral programs to inform your program structure.
- Examine the language your peers use to describe their referral program and think about how to make your messaging better.
- Identify reasons beyond the bonus that people should refer candidates to your company (your great recruiters, quick response rates, unwavering support, higher salaries, etc.).
To get you started on competitive research, we’ve compiled examples of current referral programs in the section below.
3. Implement dual-sided referral programs to increase leads
Dual-sided referral programs incentivize both sides of the referral equation. It’s the type of referral program popularized by Uber and Airbnb — a happy customer tells all their friends about their good experience with a company, their friends become the company’s newest customers, and everyone gets a little reward to celebrate. It’s a win-win-win situation — for the company, for the brand ambassador, and for the friends. What’s more, creating this win-win-win situation helps make referrals more successful. When only the brand ambassador is rewarded, people they approach for referrals may be suspicious. Are the brand ambassadors just out for a bonus or do they really believe in the company they’re promoting? Dual-sided referral programs not only help make the brand ambassador more trustworthy, but they also strengthen both the established and the new candidates’ relationship with your firm. Your candidates are more likely to give referrals, too. Instead of feeling opportunistic, they’re more likely to feel like they are giving their friends a gift.
4. Get buy-in from your recruiters
Your recruiters will make or break your referral program. After all, you’re looking to maximize and grow the network of candidates that your recruiters have sourced, nurtured, and built relationships with. Referrals should be part of your company’s DNA. When you give your team the tools they need to make the most of their existing candidate pool, you’ll generate more leads and grow your business faster. Here’s how to make sure your recruiters are always sourcing referrals.
Train your recruiters on the importance of referrals
By making referral generation strategies part of your recruiters’ training, you’ll prime them to always seize an opportunity to make more connections. Consider sharing the best practices in this article from day one.
Review referral progress with your recruiters every week
Check in each week on your recruiters’ referral progress. This gives your recruiters the opportunity to share knowledge, address referral generation problems, and discuss what tactics have been most successful.
Set specific referral goals for every recruiter
Talking about generating referrals is a good start, but holding recruiters accountable for a specific number of referrals each week, month, or quarter is a sure way to drive positive action. Consider gamifying these goals and incentivizing success — you can offer bonuses and prizes to the recruiters who meet and exceed their referral goals.
5. Make referrals fun
Referrals are loaded with things that make people happy — free money, new job opportunities, and the chance to improve people’s lives. Capture this positive spirit in the way you promote your referral program. Don’t immediately bog it down with logistics, fine print, and caveats. Instead, spotlight fun, sharing, and mutual success. Check out how AMN promotes their referral program:
From the image of a smiling travel nurse to the punchy messaging, AMN isn’t just selling its candidates on the $1,000 perk — they’re getting their candidates even more excited about being part of AMN.
6. Include your referral program details on your website
We’re constantly amazed at how many staffing firms don’t do this simple step. By creating content that explains your referral program, you’ll get more placements for your business. One simple way to do this is to partner with a referral software (like Staffing Referrals ?) and then get your program details on your site so that visitors can learn about and share your referral program.
7. Promote your referral program over as many communication channels as possible
Every channel of communication that your team uses to connect with candidates can fuel your referral program.
Use email signatures to get more referrals
By adding a referral program link to your team’s email signatures, every single email becomes a potential sourcing tool.
Add referral language into your call scripts
Recruiters may be shy about getting referrals over the phone, so give them the tools they need to get to the ask. No matter where a contact is in the recruiting process — whether they’re a cold lead or a dedicated employee — as long as they’re happy with the service your firm is providing, it’s never wrong to ask for a referral. And we’ve found that it’s even easier for recruiters to ask the simple question… “have you seen our new digital referral program” than it is to put someone on the spot to come up with specific names.
Text candidates to ask for referrals
As most staffing leaders know by now, business texting is a powerful way to get ahold of hard-to-reach candidates. It’s a great way to make a quick connection when a phone call is too time-consuming or intrusive — and because the response rate is 10x better than phone or email, it tends to be a valuable way for recruiters to cut through the noise. Encourage your recruiters to take advantage of the power of texting by asking for referrals over text. Give them specific text messaging templates to help them easily generate more referrals.
Promote your referral program on social media
It’s likely your recruiters spend a lot of their sourcing time on LinkedIn and Facebook — for many industries, Facebook is the holy grail of sourcing. You can make social networks even more valuable by continually posting about your referral program.
8. Be transparent with brand ambassadors and consistently update them on new referral opportunities
If your brand ambassadors don’t have a clear picture into what their current opportunities are, they are likely to lose interest. Just as you nurture candidates throughout the placement process, you want to keep your brand ambassadors constantly informed of where they are in the referral process and how they might generate more leads (and more rewards).
Let your brand ambassadors track their progress
You want your brand ambassadors to feel some sense of ownership over the referral process. If they have to rely on you and your team for information about their referrals, it’s much more likely they will feel out of the loop or not have the info they need when they need it. By establishing brand ambassador dashboards, the people generating referrals for you will have constant, real-time insight into the state of their referrals. They can track their friends’ progress from recommended to hired, gauge when they can expect to see bonuses, and gain insight into stalled referrals. Another bonus of giving your brand ambassadors insight into the process is that it makes it easier for them to nudge and nurture their own referrals. Your brand ambassadors will be following up with your candidates, encouraging them to move forward with your staffing company.
Consistently update brand ambassadors on new referral opportunities
You don’t want those dashboards to be your brand ambassadors’ only source of updates, though. Establish a regular rhythm with your team for referral outreach and updates. By giving them information through multiple channels, including their dashboard, email, text messages, and even an occasional phone call, you can ensure that your ambassadors will remain engaged and proactive in generating candidates. For tips on outreach messaging, check out our downloadable Referral Marketing Email and Text Templates below.
9. Invite past customers to join your referral program
Use your referral program as an opportunity to stay in touch with your broader network. By bringing past candidates and clients into your program, you not only open yourself up for more referral business, but you warm up past relationships, too. By reviving old connections and bringing them more actively in contact with your company through your referral program, you up the chances that an inactive candidate will take on a job for themselves.
10. Allow non-customers to benefit from referring friends
It’s not just candidates who have good insight on potential leads. One of your recruiters’ friends may know an ideal software engineer. Someone who saw an ad for your referral program might have an entire family of nurses to recommend to you. Don’t limit your reach — open your referral program up to anyone who can provide you with leads on top talent.
11. Automate your referral program outreach
As discussed above, digital referral platforms like Staffing Referrals can automate referral program outreach — your team can set it up and let it run, generating more connections without generating more work.
- Create email sequences that nurture brand ambassadors throughout the entire referral process, giving them the incentive, motivation, and information they need to keep your company top of mind.
- Create text sequences that can draw in passive ambassadors, gauge candidate interest in reaching out to their friends and acquaintances, and keep your team available to answer quick questions that might otherwise delay the referral process.
- Schedule social posts in advance so recruiters can constantly generate interest in the referral program without having to think about it.
12. Give your brand ambassadors the tools they need to share your program
Recruiters aren’t the only ones who need to be educated about the benefits of the referral programs. You want to give your brand ambassadors the information they need to easily reach out to their community. And you want to make that outreach as effortless as possible.
- Describe your referral process clearly and succinctly for your brand ambassadors.
- Provide brand ambassadors with a link to your referral program so they can easily promote it to their network.
- Create easy-to-personalize email, text, and social templates that your brand ambassadors can send out on their own.
- Make sure your team is always available to field any questions ambassadors have about the program.
13. Integrate your referral program with your ATS
A successful referral program has a lot of moving pieces. Each recruiter has their own network they’re working to grow. Each brand ambassador has their friends, family, acquaintances, and social networks. And each new candidate requires nurturing, onboarding, and their own education about your referral program. Even with a well-organized program, it’s easy for some referrals to fall through the cracks. And lost referrals are lost money. Integrating your referral program with your ATS helps mitigate some of these losses. The more you can automate the integration — from your recruiters’ email accounts, text messaging accounts, social feeds, and phone touches — the more successful your referral program will be.
14. Select referral management software designed for your industry
The staffing industry is unique in that it runs solely on people. There’s no product to sell. Instead, the industry is fueled by strong relationships that move talented people into the jobs that suit them best. Generic referral management software often has product-focused companies in mind, whose referral program needs are based on a different economic and social model. Consider an industry-specific referral management software like Staffing Referrals built by folks who are familiar with your candidates’ needs, knowledgeable of industry trends and forecasts, and responsive to the unique demands of your fast-paced people-first business.
15. Track the ROI of your referral program
When it comes to assessing the ROI of various sourcing streams, a lot of staffing firms fall into the trap of believing how things seem. They may know they’re getting tons of leads from Facebook or that their new web application is blowing up. But when it comes to nailing down the source of the candidates who are signing those contracts, things can get a little murky. To understand how your referral program is performing, be sure to closely track the ROI.
- Track each referral from the time a brand ambassador puts them in touch with your company to when they sign a contract.
- Monitor how much revenue you generate from referrals.
- Compare this to the cost of your recruiters’ time, of recurring outreach efforts, and of referral software and other related tech.
Referral Marketing Email and Text Templates
Invitations to join the referral program
Here’s a brief email and text sequence that your recruiters can modify and send to your existing candidate pool and larger network to invite them to become brand ambassadors with your company. Encourage them always to personalize these templates to make them fit for each contact and the recruiter’s relationship to them.
Subj: Special invitationHi [Brand Ambassador First Name], I’m thrilled to invite you to our new referral program so that you can earn extra income by inviting your friends, coworkers, and other connections to work with [Company Name]. If your friend meets the requirements and takes a position with us, they’ll get a $500 bonus. You’ll get a $500 referral bonus, too, for every single person that joins us on your referral. Sound pretty great? (Click here to invite your friends) I hope you’re having a wonderful day! Best, [Recruiter First Name] [Recruiter Signature]
Text Message #1
Hey [Brand Ambassador First Name], just checking in to make sure you got my email about joining our referral program because it could help you earn a little extra while helping your friends out. Let me know if you’d like to chat about it — [Recruiter First Name]
Subj: [Brand Ambassador First Name], help your friendsHi [Brand Ambassador First Name], Do you want to help your friends into great jobs while earning a bonus? Invite your friends to [Company Name] — if your friend takes on a new position, you each get a $500 bonus. (Click here to invite your friends) Questions? Hit reply or send me a text at [Recruiter Text Number]. Best, [Recruiter First Name] [Recruiter Signature]
Subj: [Brand Ambassador First Name], know anyone who fits the bill?Hi there, Do you know anyone who is searching for a [Job Title] position? Connect them to [Company Name] — if they work with us, you and your friend will both earn a $500 bonus. Interested? Click below: (Click here to invite your friends) Best, [Recruiter First Name] [Recruiter Signature]
Text Message #2
Hey [Brand Ambassador First Name], know you’re busy and just wanted to see if you’d had a sec to check out our referral program. Have any questions about it? — [Recruiter First Name]
Here’s a referral request sequence that your recruiters can personalize and use with their candidates. Email #1
Subj: ConnectingHi [Brand Ambassador First Name], Are any of your friends and colleagues searching for a job? Help them out and earn a little extra income by referring them to us here at [Company Name]. Just forward your unique referral link to them. If they accept a position with us, you’ll both earn a $500 bonus. (Click here to invite your friends) I hope you’re having a good week! Best, [Recruiter First Name] [Recruiter Signature]
Text Message #1
Hey [Brand Ambassador First Name], following up on my email, do you have any friends or colleagues you can think of who might be interested in working with [Company Name]. If you do, here’s an easy way to refer them to me: [Unique Referral Link]
Subj: Re: ConnectingJust sending a quick reminder so you’ll think of [Company Name] if any of your friends or colleagues could use a job lead. Send them your link below and you can both earn a $500 bonus. (Click here to invite your friends) ——– Hi [Brand Ambassador First Name], Are any of your friends and colleagues searching for a job? Help them out and earn a little extra income by referring them to us here at [Company Name]. Just forward your unique referral link to them. If they accept a position with us, you’ll both earn a $500 bonus. (Click here to invite your friends) I hope you’re having a good week! Best, [Recruiter First Name] [Recruiter Signature]
Subj: Checking inHi there, It’s been a bit since I reached out and I just wanted to check one last time to see if you had anyone you wanted to refer to [Company Name]. Just forward them your link: (Click here to invite your friends) If they apply through it, you’ll both get a nice bonus :). Best, [Recruiter First Name] [Recruiter Signature]
Text Message #2
Hey [Brand Ambassador First Name], just forgot to add in my email that posting your referral link on social media is another great way to get your friends jobs! Here it is, so you can keep it handy: [Unique Referral Link]
Staffing Industry Referral Program Examples
Vertical: Healthcare Offer: $400 Requirements: New to Focus Staff, 13-week contract
Vertical: Travel Nursing Offer: $500 cash or gift card Requirements: 30 days
Vertical: Healthcare Offer: $1/hr worked Requirements: Extensive requirements here
Vertical: Travel Nursing Offer: $500 Requirements: Subject to approval after placement, a minimum term, and/or assignment completion
Vertical: Healthcare Offer: $350-$1,000 Requirements: 30 days
Vertical: IT, Industrial, Engineering Offer: $500 on average Requirements: 90 days employment
Vertical: IT Professionals Offer: Not indicated Requirements: Not indicated
Vertical: IT Professionals Offer: Not indicated Requirements: Not indicated
Note: Referral program is only briefly mentioned on the benefits page.
Vertical: IT Professionals Offer: $1,000 Requirements: Not indicated
Vertical: IT Professionals Offer: $250 – $1,000 depending on number of referrals Requirements: Not indicated
Commercial / Light Industrial
Vertical: Industrial Offer: Unspecified Requirements: Unspecified
Vertical: Industrial, Administrative Offer: $50 – $100 per referral Requirements: Minimum of 160 hours worked
Vertical: Industrial Offer: $50-$100 Requirements: Unspecified
Vertical: Industrial, Administrative Offer: $100 per referral Requirements: Minimum of 160 hours worked
Vertical: Industrial Offer: Starting at $25 Requirements: Minimum of 80-200 hours worked
Vertical: Administrative Offer: $50 (temporary employee); $100 for direct hire Requirements: 100 hours or direct hire
Vertical: Administrative Offer: $200, for both clients and job candidates Requirements: 520 hours
Vertical: Industrial, Administrative Offer: $100 per referral Requirements: Minimum of 80 hours worked
Vertical: Administrative, Financial Offer: $500 gift card Requirements: Extensive terms and conditions here
Vertical: Administrative, Industrial Offer: Chance to win $10,000, direct hire bonuses of $100-$250 (excludes industrial positions) Requirements: Extensive terms and conditions here
General Referral Program Examples
Few referral programs have generated as much buzz — and business — as Lyft and Uber’s. Referrals have been a huge part of both rideshare companies’ successes. Both companies offer dual-sided referral rewards for riders — this has been a wildly popular way to grow their ridership. But the real incentives start with people recommended drivers to both companies — earning both referrer and referree as much as $1,750. Uber even offers an added referral bonus to former Lyft drivers.
Airbnb has become a $31 billion company, due in large part to their wildly successful referral program. In a talk digging into how the company made their referrals as successful as possible, Jimmy Tang and Gustaf Alstromer of Airbnb discuss how their referral program grew exponentially, driving 900% year-on-year growth for 1st time bookings.
Tesla’s tiered, dual-sided program offers escalating rewards as loyal Tesla customers introduce more and more of their circle to the Tesla life. In keeping with their luxury-first brand, referral rewards include the opportunity to launch your photo into space, a Tesla for your tot, and priority access to new vehicle features.
Like Tesla, Jet is selling an experience. The curated shopping site is fun, easy, quick, and high-end, and they made their referral program in their image, too. Their dual-sided referral program was gamified from the beginning — before the company launched, they incentivized people to share their link with their friends by offering 10,000 shares in the company to the person who could generate the most referrals. The referral leaderboard showed everyone’s progress — and folks were so eager to join in the referral fun that one guy spent $18,000 promoting his referral link. He won more than just those shares — he garnered a ton of attention for Jet.
Looking for more on how referrals can help your staffing firm? Check out our case studies.