Employee referral programs in 5 steps

How to Create and Manage Successful Employee Referral Pro-

gram: A Guide for Corporate Recruiters.

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Employee referral programs in 5 steps recruiterblog.facecontact.com

In this report we decided to compile and structure all available information about em-
ployee referral programs. See links to source articles in appendix.1

Contents

Contents .......................................................................................... 2
Business Impacts of Referral Programs....................................................... 4
Steps to create effective employee referral program..................................... 6
Step 1. Design your campaign and your message. .................................... 6
Step 2. Promote inside your company. ................................................. 8
Step 3. Promote outside your company. ..............................................11
Step 4. Rapid follow-up. .................................................................13
Step 5. Pay Referrals rewards...........................................................14
Step 6. Manage and track your referral program. ...................................15
Case studies .....................................................................................17
Examples of Referral Program Guidelines. .................................................27
Appendix 1: Sponsor ads.......................................................................33
Appendix 2: List of links of related or used articles. .....................................34

1
Special thanks to Dr. John Sullivan & Master Burnett for their significant input into this re-
port.

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Steps to create effective employee referral program

Employee Referrals Program (ERP)

Step 1: Design your program and your message.

Step 2: Promote inside your company.

Step 3: Promote outside your company.

Step 4: Track referrals & rapid follow-up.

Step 1: Design
Step 5: your
Payprogram
Referrals
and
rewards.
your message.

ERP Benefits
Great quality of candidates
Lower costs
Greater speed and satisfaction

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Business Impacts of Referral Programs

Great quality of candidates

• Produce employees who are 20-30% more productive on the job.

MIT Sloan School of Management Professor Emilio J. Castilla discovered that employees
recruited through employee referral programs can have significant performance dif-
ferentials from employees who were sourced via other channels. While Professor Cas-
tilla’s research focused on a single call center, his findings are similar to those of a
growing list of companies including FirstMerit Bank, Tenet Healthcare, and Allstate, to
name a few. In 2006, Booz Allen Hamilton surveyed 73 major employers, and 88%
found that hires made via employee referral performed better on the job than candi-
dates hired via other sources as measured by their companies’ performance appraisal
systems. According to Dr. John Sullivan the minimum and maximum observed data
points between employee referral program hires for employees meeting minimum pro-
ductivity by end of probation period is 92-100% compared with 74% for hires by all
other sources.

• Produce employees who have 2x higher retention rates.

Professor Castilla also noted that employees who were recruited via employee referral
programs also stayed longer than employees recruited through other sources, provid-
ing the employee who referred them did not separate. This is a trend that many cor-
porate program managers have also noticed in such companies as SRA International,
PricewaterhouseCoopers, Allstate, Texas Instruments, and Southwest Airlines. Accord-
ing to Dr. John Sullivan employee referral program hires results in 9-21% voluntary
turnover in 3 years compared with 39% for hires by all other sources.

• Produce 15-30x less non-qualified applicants.

Baptist Healthcare and Allstate have both found that referrals produce a lower per-
centage of “non-qualified” applicants, a characteristic that reduces the screening de-
lay inherent in most recruiting systems and enables recruiters to focus on getting the
right candidates in front of the right managers in the shortest possible time. According
to Dr. John Sullivan employee referral program hires results in 22-58% of applicants
that meet job requirements compared less than 2% for hires by all other sources.

Lower costs

• Reduce the burden on recruiting departments.

It is not uncommon for managed referral programs to produce more than 50 percent of
an organization’s total new hires. Because managed programs focus on tuning the pro-
gram to produce only qualified applicants, a great deal of the labor that the recruiting
department would usually expend screening and sorting applicants is eliminated.

• Produce a high ROI (>500%).

In making the business case for implementing an employee referral program, Dr. John
Sullivan discovered that the ROI for an employee referral program could be well over
500 percent if the performance differential could be quantified and included. Obtain-
ing that level of ROI did not include branding value (employees talking positively to
strangers about the firm and its products). The vice president of marketing of Agilent
said that the value of employees talking up the company to friends, colleagues, and

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family to a company the size of Agilent could top $100 million. Such a return would
have produced an ROI in excess of 3,000 percent.

Greater speed and satisfaction

• Produce hires more quickly than alternate sources.

Employee referral programs when managed properly produce candidates that are, for
the most part, prescreened for “culture” and skills fit by the employee. In organiza-
tions that tag applicants with source of hire, the impact of this characteristic is tell-
ing. Such applicants require less rigorous formal screening and therefore advance
through recruitment processes much more quickly than candidates from other sources.
European communications giant Vodafone found that by focusing recruiting activities
on employment brand management and employee referral, the average recruiting cy-
cle time per position could be reduced by more than two-thirds.

• Increase manager satisfaction with the recruiting department.

Because employee referrals prove more reliable and productive, management satisfac-
tion with the recruiting department tends to increase as the percentage of requisitions
filled via referral programs increase. Managers are generally highly satisfied with req-
uisitions filled through the referral program. This trend has been noticed by Nation-
wide Insurance and CMP Media.

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Steps to create effective employee referral program

It turns out that referral programs are a lot like marriages; when they work, they provide ex-
ceptional happiness and results for all involved, but once one party gets let down, they fast
deteriorate to a shell of their potential. While the concept behind employee referral pro-
grams is a simple one, the programs themselves must be well managed if the goal is to pro-
duce anything more than mediocre results. If you believe in making “fact-based” recruiting
decisions (most don’t), referrals should be your number one source (followed by recruiting at
professional events). Please find below several steps for successful employee referral pro-
gram.

Step 1. Design your campaign and your message.

• Develop a slogan.
Referral programs are no different than any advertising or marketing campaign de-
signed to get people to do something you want. As such, borrow from the advertising
world and develop a slogan that helps stake out mental real estate for your program.
Much like the Budweiser campaigns, change your slogan periodically to keep the ex-
citement level up. Some sample slogans include:
− “It’s all about you.”
− “You can help us ‘pick the team.’”
− “If you happen to be playing with Tiger Woods, can you get his card?”
− “Browse your Rolodex for us.”
− “We know that you know the very best people.”
− “Give it up.” (your best referrals)
− “You know somebody, don’t you?”
− “Help us build a great team, so we can all win.”
− “Simply the best…that is who we need.”
− “We can’t be champions without your help.”
− “Every employee is a talent scout.”
− “If you want to work alongside the very best, be a talent scout.”
− ‘Drop a dime’ on the best people you know.”

• Shuffle the advertising and marketing materials.

All advertising, whether it be product or employee referral program related, begins to
lose its impact over time. Professional marketers understand that there is this magic
window between when a campaign establishes a foothold and when it becomes old and
easy to ignore. Remember the Budweiser Frogs or the “whassup” campaigns? They
came and went fairly quickly, each establishing a strong foothold. Work with your
product advertising department to identify new and exciting ways to get your message
across. Change the advertising copy often and rotate the placement or channels used
to push your message. If you haven’t tried these, consider placing marketing materials
on cafeteria tables, using an A-frame in the lobby, paycheck stuffers, placing referral
messages on employee scratch pads, and alerts over the phone and the computer to
remind employees to refer top people that they just finished talking to via phone or e-
mail.

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• Design Messages to Provide Immediate Value

More often than not, even the best marketing efforts found among average programs
involved messages that were informative but not of value. Top-performing programs,
on the other hand, refined the ability to develop messages that had value outside
their immediate application to the employee referral program.

For instance, emails alerting employees in a specific location about mission-critical or

hard-to-fill jobs may also contain guidance on how to use an online directory to find
old friends or former colleagues. Because the process of how to find someone has re-
levance outside the act of making referrals, there is a much better chance the mes-
sage will gain traction and lead to employees trying the activity suggested.

Other messages might introduce funny facts about the organization or tips on using an
employee benefit in an innovative way that prime employees with interesting stories
they can tell others when talking about their employer.

Some of the elements that can be designed into messaging campaigns to provide value
include:

− A summary of key business performance indicators in a language the average

employee could understand.
− Tips/guidance on tools and techniques employees can use to identify suitable
talent.
− Wow stories that provide “interesting” conversation material for employees to
chat about with people outside the organization.
− Updates on what urgent needs exist and priming questions that might help em-
ployees figure out who they know. If I were to ask you a very specific question,
say for instance, do you know any financial analysts that used to work for Bear
Stearns, it would be much easier for you to answer quickly than if I were to ask
you a very broad question.

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Step 2. Promote inside your company.

• Hyper-Segmented Messaging
While an average program may draft employee referral program messages once a
quarter, the message is usually generic in nature and broadcast to the entire organiza-
tion. Top-performing programs, on the other hand, may generate thousands of cam-
paigns a year, some of which may be targeted at only a small handful of employees.

Segment messaging may include:

− Employee location
− Job family
− Job performance rating
− Labor type (employee, contractor, consultant, etc.)
− Tenure
− Previous employer
− Past referral success/failure
− Diversity characteristics
− Affinity group membership
− Management level
− Preferred method of communication
− Educational background (degree, institutions attended, etc.)

While some messages are relevant to the entire employee population, the vast major-
ity are not. The secret is to avoid “dumbing down” messages to make them relevant to
everyone and instead deliver extremely relevant messages to much smaller popula-
tions. It may seem like a lot of work, but the payoff makes it well worth it.

• Three-Pronged Message Delivery

Another key learning from Dr. Sullivan’s research is that not all employees pay atten-
tion to the same channels of communication. Some people read posters, while others
ignore them. Some people read every email, while others employ filters to sort out on-
ly the most important. Some people prefer face-to-face, while others require written
materials.

What the research shows is that you need to leverage at least three channels if you
want your message to reach a majority of the employee population. What happens if
you don’t use at least three? The research shows 72% of employees were unable to re-
call basic program features when prompted, compared to 43% in companies using
three or more.

The key Dr. Sullivan found was the number, not necessarily the use of specific chan-
nels. While email was common among nearly all top-performing programs, there were
a significant number of top-performing programs that do not leverage email at all, like
construction companies.

The most common sources of communication used include:

− Signs in public places (have you considered bathroom stall doors?)

− Email
− Websites
− Intra-office mail
− Voicemail broadcasts

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− Team/Departmental/Functional meetings
− Mail sent to employees homes
− Payroll notices/Stubs

Also use the following channels:

− Company newsletter and intranet. Announce special events, such as give-
aways or quarterly drawings, as well as the status of the overall program and
the status of individuals referred. This should be done on a weekly basis via e-
mail, the company intranet or written reports.
− Hold referral parties. Hold quarterly “referral parties.” Eli Lilly is famous for
holding “Rolodex parties,” but given technological advances, PDA or email
dump parties might be more appropriate. You schedule time in key targeted
departments, during a slow period, to meet in their conference room with
snacks or even lunch to get employees to give up the names of key individuals
that they met recently. These events work particularly well after a large per-
centage of the team has just returned from a large professional event or con-
vention.
− Referral alerts. Announce in the mailroom, through email, or even over the in-
tercom that there is a critical need for certain position. Just like blue-light
specials and amber alerts, this program can excite people and spur action in a
short period time.
− Awards and recognition. Providing awards and recognition at all-hands meet-
ings is a simple, effective way to remind people of the importance of referrals.
Awards should be given to the manager who encourages their department to
produce the most referrals and mention should be made of the number of top
performers in the organization who got their jobs through referrals.
− Announce successful hires. In many companies, all employees, with the ex-
ception of the recruiting staff and often times, senior personnel, are eligible to
participate in the referral program. But when higher-level employees do refer
individuals, company-wide e-mails are sent out to announce and recognize
their contributions. Their efforts also can be acknowledged at special meetings
or luncheons.

• Pay attention to the top-management.

− Include senior managers and HR people. The idea behind a referral program is
to get as many people as possible scanning the streets and talking up your firm.
To exclude anyone, especially highly visible individuals like senior managers
and HR professionals, is not advised. Excluding them makes them feel like they
are second-class citizens, and they will not refer at the same rate if they are
excluded specifically from the program and the reward. If you’re worried about
these individuals referring people who are qualified just to get the money,
then these individuals should be fired on the spot. The best programs allow hir-
ing managers or anyone with a perceived conflict to “opt out” of the bonus or
donate it to charity.
− Make the business case to line managers. Even if you’ve got the budget for
the referral program, you will need to reenergize hiring managers if you want
to reenergize your program. Rather than bombarding them with memos and
promotional materials, get their attention by reminding them of the dollar im-
pact that referrals can have on their departments. Start by showing them the
superior performance and retention rates of referees. Then go one step further
and quantify that performance in dollar terms — something they clearly under-
stand. If their department is low in referrals, show them the exact dollar costs
as a result of having low departmental referral rates.

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− Manager talk. Have key managers give talks at scheduled management meet-
ings characterizing the importance of referrals. Have them share a few success
stories, pointers, and program updates. This will generally energize employees
who frequently think that only HR cares about referrals. You can get the CEO
to announce that she is a big supporter of referrals and has even made refer-
rals herself.
− Incorporate into the motivation system. The utilization of employee referrals
is part of the manager’s bonus criteria.

• Educate and train employees.

− Reinforce the employee’s role in building the team. Great referral programs
are not about money; they’re about empowering employees to play an active
role in building an all-star team for them to work with. Exceptional employees
understand that working with the very best people helps them learn, reduces
the time required to clean up other people’s sloppy work, and ultimately leads
to a better chance at success. The major action to take is to change the per-
ception of who benefits from the referral program. All promotional materials
and communications must be redesigned to emphasize this program is “all
about them.” The subliminal message is that if they don’t help by becoming
24/7 talent scouts, they might just end up working alongside a lot of pretty av-
erage people!
− Educate your employees on how to talk to top talent. You might not realize
it, but most employees actually don’t know how to meet and screen individuals
for referrals. As a result, they have a bad tendency to refer their close friends
or relatives. However, if you are willing to educate them, you’ll find that re-
ferral volume and quality will go up significantly. The key to employee educa-
tion is to help them understand what questions they can ask, and what tools
and approaches they can use to identify and to strike up a conversation with
the best talent they meet. Teach them that it is okay to use community events,
charity events, association meetings, list serves, and blogs to identify potential
candidates for referral. You should also consider having individuals who consis-
tently produce great referrals to give talks or mentor others.
− New hires in key positions are asked for referrals on their first day on the job.

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Step 3. Promote outside your company.

• Reinvigorate “event” referrals.

Getting referrals from employees who attend events is the most underused approach
to referrals. Every year, literally hundreds or thousands of your employees attend se-
minars, association meetings, and other professional events and come home with
nothing but a hangover. Referral programs must work with managers and corporate
travel to identify which individuals are attending professional meetings and to encour-
age them to “bring back” the names of the very best people they encounter at these
events.

• Email referrals.
The program allows referrers to email open job descriptions to their friends.

• Use employees to help you convert passives to actives.

Just like Cisco proved, employees can be great salespeople. Someone will (or already
has) come up with a scalable version of the Cisco Friends campaign — one that won’t
overwhelm employees with inquiries, while allowing them to focus up to a half-hour of
their time a week building relationships with great potential hires.

• Focus employees on top performers and key skill-sets.

Your employees already know who the top performers are at your competitors and
what might make them look for another opportunity. But today they don’t have a re-
sume or a way to tell you about how great they are, and these top performers won’t
apply for a job you have open today. You’re already sitting on a gold mine, and tomor-
row’s employee referral program will more easily exploit this by regularly asking them
to name names. Your research efforts might yield other target hires that your best
employees can help you pre-qualify, pre-sell, and motivate — but you’ll have to make
sure that the right people in the company know who the gold candidates are and
where to spend their energy.

• Leverage employee relationships and affiliations to get ahead of hiring demand.

Relying on employees to refer jobs to friends or submit their friends for jobs is at most
10 percent of the battle. What about the people your employees know who could be
great for future openings? Realizing that passive talent is incredibly valuable but does
not always lead to immediate hires, employees will not only help you engage and build
relationships with passive talent, they’ll also be rewarded for these activities, not just
the longer-term outcomes of these activities. They may do many things to help broa-
den your reach among people they know.

• Use proactive referral tools.

Even new or reenergized referral programs produce less-than-optimal results when
they rely on advertising and word of mouth alone to produce referrals. Instead of the
standard “wait for referrals” approach, recruiters need to proactively seek out top
performers in targeted jobs and ask them directly for names. It turns out that top per-
formers are often too focused like lasers (and they seldom need the extra money) to
find time to make referrals. What is needed is a program to directly approach them
face-to-face during breaks in management meetings and after their return from a trip
to an event and then to ask them specifically for the names of the people that really
impressed them.

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• Referral cards.
If you don’t currently have them, there are few better ways to reinvigorate the refer-
ral program than referral cards. Referral cards are attention-getting cards (Southwest
Airlines used mock boarding passes) that you give to employees to hand to people they
meet in their everyday business and personal life who have a special skill. They say
something very complimentary (like, “Your customer service skills are amazing!”) and
suggest that they might fit well with your organization. These cards work the best
when you’re looking for customer facing skills because we see those people every day
when we purchase things, eat lunch, travel, or return things.

• Non-employee referrals.
The program should include a method to incorporate referrals from non-employees
(vendors, consultants, ex-employees, and even spouses and customers).

• Extend employee referral programs to passive job seekers.

Your target hires in 2015 will be even more likely to be employed than they are today.
In the future, employees will be encouraged to drive leads and prospects vs. resumes
and applicants, and recruiting processes will be better prepared to support this. They
will also be your best networkers, opening up their rolodexes or actively building rela-
tionships that will lead you to great talent. Extended or multi-level referral programs
that reward indirect referrals (for instance, a friend of a friend of a hire) will become
very common.

• Get feedback.
Ask successful referrers which approaches or sources they have found effective in
identifying their candidates. That information is used to educate other employees at
“lunch events” or departmental meetings.

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Step 4. Track referrals and rapid follow-up.

• Create a culture of rapid follow-up.

A common thread that runs through passive recruiting and employee referrals is the
need for proactive and rapid follow-up. Employees quickly shut down if you don’t fol-
low up with their submittals. Wait on a passive candidate and the trail quickly goes
cold. We’ll never be able to guarantee that every referral will get an interview (like
several companies did in the late 1990s). But employers will get better at knowing
who their best referrers are, and that immediate follow-up is needed for top candi-
dates or those recommended by their best referrers.

• The entire referral process should be web-based and paperless.

Referring team members should be kept in the loop through a web portal that allows
them to track the status of referrals online and by emails that update them when:

− The referral has been initially contacted.

− An interview is scheduled.
− A post-interview decision has been reached. To move forward, the system ad-
vises recruiters and managers of the next steps.
− A hire is actually completed.

• Give referrals high priority.

Nothing deflates a referral program faster than having a slow response rate to em-
ployee referrals. Prioritize referrals and develop a system to screen all of them within
five days. To keep the energy level up, respond rapidly to the employee and the can-
didate and be honest as to the reasons why someone is not selected. Never delay
payments or add restrictions on who can participate; such features are program killers
must be eliminated immediately.

• Provide feedback on weak or bad referrals.

Most employees have good intentions when they’re making referrals, but if you don’t
notify them after they’ve made a particularly weak or bad referral, they have no way
of improving future referrals. The best systems rate referrals and the individuals mak-
ing them so that future referrals by this individual are given a higher priority as a re-
sult of their previous successful track record.

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Step 5. Pay Referrals rewards.

• Do not delay reward/bonus payment.

Withholding payment of the bonus for 90 to 180 days post-hire is silly. Do sales people
have to give back their sales bonuses if the customer stops buying after 90 days? Do
you delay payments to staffing agencies or executive search firms? Well, of course not.
So why should you treat your employees more harshly than you do your vendors? Re-
wards work only if they are immediate and there is no “risk” of not getting them.
Nothing discourages participation more than delaying the reward based on something
beyond the employee’s control. Paying half of the fee upfront is not an acceptable al-
ternative. In addition, it’s not the employee’s responsibility to hire a candidate, only
to refer them. Hiring managers do the final assessment and they determine whether
the person is the right fit. If the person does quit prematurely, it’s the manager you
should blame, not the employee making the referral, because they have no control
over how the individual is treated.

• Provide different rewards for different jobs.

All HR programs should reward performance, and referrals are no different. Referrals
for hard-to-fill jobs and mission-critical jobs should get a bigger bonus than easy-to-fill
jobs. In addition, there should be a supplemental bonus if someone turns out to be a
top performer after they are hired. If you fail to include reward differentials, your key
jobs will be filled more slowly or not at all. In fact, the best programs allow referrals
only for jobs that are high impact or are hard to fill.

• Use big-dollar bonuses only for top jobs.

Paying too much money can actually kill a program, as large bonuses incent employees
to spend more time looking for referrals than doing their jobs. This angers their man-
agers and eventually it will cause these managers to resist the program. Research
shows that anything over $1,500 will generally have little impact on referral volume of
quality candidates.

• Don’t pay a miniscule reward.

Do not embarrass yourself by paying a ridiculously small bonus. Yes, you can pay noth-
ing or just have drawings for prizes and still have an effective program, but don’t pay
$50 or $100 for something that if you had to hire an external consultant to do would
cost thousands of dollars. If you’re paying significantly lower than the market stan-
dard, you will get push back from your employees who compare what your firm pays to
what is paid by close competitors.

• Reinvigorate the rewards.

Although some well-designed referral programs produce great results without any
monetary rewards, most research shows that offering a monetary reward increases
both the number and quality of referrals. This does not mean that you should offer a
lot of money ($1,500 is the recommended maximum), but it does mean that you
should vary the rewards and change them periodically to keep people excited. Many
firms successfully use drawings for trips, luncheons with the CEO, a reserved parking
spot or other non-cash items. The key here is to vary them and to see what works and
what doesn’t. When something does work, it generally needs to be changed less often
— about every six months or so.

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Manage your referral program.

• The submission of “names” only (i.e. no resumes) for top candidates should be ac-
cepted and encouraged (top performers will often opt-out of a bureaucratic process).

• Accountability and budget allocations.

It’s amazing how many organizations delegate the referral program to a junior person
or intern. If you want to reenergize your program, rotate someone into the job with a
background in marketing. Managing the referral program should be someone’s full-
time job, and the percentage of the recruiting budget that is allocated to it should
correspond with the percentage of total hires it produces. The fact that referrals seem
“easy” is no reason to under-appreciate and under-fund them. Getting “top per-
former” referrals requires great talent, time, and money.

• Make the rules simple.

Complex submission rules will dissuade employees from participating. Try to create
guidelines that are easily understood. However, make sure you address problematic
areas, such as how to deal with a situation in which two people claim to have referred
the same candidate who ultimately was hired.

• Avoid employee program manager turnover.

Because of weak metrics, most employee referral programs are under-appreciated by
recruiting, HR, and senior management. As a result, turnover rates among ERP pro-
gram managers are quite high. Because the learning curve is steep, the replacement
manager almost always “damages” even the strongest referral program. In order to
avoid this problem, the position needs to be given as much recognition and pay as ne-
cessary to encourage the program manager to stay in it for at least three years. If the
person running the program views this position as one small step on their way to be-
coming an HR generalist, you have made a bad hiring decision.

• Add mechanisms for resolving disputes over who “gets credit” for duplicate refer-
rals. There should be an appeal process for individuals who feel they were unjustly
denied a referral bonus.

• Maintain clear records.

By time-dating each resume that has the properly filled out referral card, for example,
you can avoid potential problems. Keep data that list the referral, the date, the name
of the candidate, all pertinent candidate data, a copy of the resume/application, and
a copy of the referral form. Also, when the status of the referral changes, update it
accordingly.

• Don’t allow referral spamming.

Designing a process that allows individuals to inundate the referral system with high-
volume, low-quality resumes will cause the program to suffer or even fail. If you allow
it, some employees will bring you stacks of resumes that they got from a recruiter
friend or from the Internet. Although it’s tempting to accept them, never accept large
volumes of resumes or referrals. The reason for this is that the person giving a large
volume of referrals cannot know them all, and one of the key design features for pro-
gram success is that employees only refer people they know on a professional level.
Unless it’s an unusual circumstance, limit referrals to no more than three a month for
many individuals.

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• Historical data.
Add a feature where an employee’s “next referral” is weighted based on the success
of previous referrals.

• Gather metrics for continuous improvement.

Surveys reveal that well over 75 percent of referral programs do not use metrics to
monitor the performance and health of their programs. An even greater percentage of
organizations do not evaluate the on-the-job performance of new hires by source.
Without this crucial metric, you cannot calculate the added value of referrals. Other
metrics need to be kept on voluntary turnover, offer acceptance rates, and termina-
tion rates. Employee participation rate by reporting group can be a particularly telling
metric. Some metrics you may consider proposing include:

− “On-the-job” performance of referral hires (measure and compare the ERP’s

performance ratings to other sources of candidates)
− Program ROI
− Retention (turnover rate) of referral hires
− Percentage of all hires who come from referrals (variant: percentage of key
jobs filled by referrals)
− Manager/referee/referrer satisfaction with the referral program
− Percentage of diversity referrals/hires (especially in management and key jobs)
− Process time by step (delay from referral point to interview date, which results
in fewer top performer hires)
− Employee participation rate in the referral program
− Cost per hire (as compared to other sources)

• Distribute ranked referral metrics to managers.

It’s not enough to gather metrics about referral programs. If you really want to drive
performance, distribute ranked referral results by individual manager. The report
should go to each manager every month so that they can see by name where they rank
against others on producing quality hires. There is no tool that will get managers at-
tention faster than distributing ranked metrics. Distribute a “best to worst” list of
company-wide departmental referral performance in order to embarrasses dawdlers.

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Case studies

VistaPrint reinvented the printing industry in 1995, by bringing printing and marketing ser-
vices online for small businesses and the result was billion dollar growth. Austin Cooke, vice
president for global recruiting, was charged with supporting the company’s rapid growth
when he accepted the position two years ago.

There were just a couple of challenges standing in his way: only 19% of the company’s hires
were coming from employee referrals, and Cooke’s entire talent acquisition staff consisted of
four contract recruiters.

Cooke’s solution: Increase the company’s recruiting staff by 700 people overnight, by engag-
ing the company’s full-time workers as recruiters. Some of the key steps to his implementa-
tion plan included:

• Gain the support of senior company leadership for the concept.

• Engage the company’s employees as recruiters by educating them about the program, gain-
ing their trust, and providing easy-to-understand incentives.

• Extend the company’s reach by soliciting the recruiting efforts of family members and
friends of employees.

Cooke developed an internal marketing campaign to educate employees about the program
and company executives sent letters to employees’ homes endorsing the program, but he
worked hardest at the most critical element — building employee trust.

The talent acquisition team followed up on every referral within three days of submittal and
provided open feedback to employees on the status of referred candidates. The idea: Trans-
parent communication and timely follow-up creates trust and encourages employees to make
more referrals. Cooke says that many referral programs start out with a big bang and then
fizzle, so Cooke hired a marketer, not an additional recruiter, to create continuous marketing
buzz around the program, and the company offered a referral contest award trip to Hawaii
and informed the spouses of employees about the opportunity. Besides follow-up and consis-
tency, Cooke attributes the success of his program to its simplicity. There were clear and
easy directions for submitting candidates, easy-to-understand rewards and lots of recognition
for the referral leaders.

Two years later, VistaPrint has hired close to 1,800 employees and Cooke has increased
the company’s recruitment staff to 24. But it’s the increased hires from employee refer-
rals that he cites as the greatest reason for the company’s growth, because the internal
referral rate has increased from 19% to 46%.

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As Cisco demonstrated in the tight IT labor market in the late 1990s, it’s possible to turn your
entire company into a recruiting force for you that generates up to 50 to 60 percent of new
hires, increases productivity, and lowers time to fill. With larger volumes of active candidates
and the ubiquity of the Internet driving large volumes of resumes, the Cisco Friends approach
(where candidates could connect with a Cisco employee in their field instead of applying)
would be a difficult strategy to undertake today without a tight screening process in place.
Yet considering the time, when Internet usage was not as prevalent as it is now, labor mar-
kets were tighter, and Cisco was still establishing a name for itself, the Friends program was
nothing short of brilliant. Cisco employees acted as an extended sales force, helping convince
on-the-fence and passive candidates that the company was a viable (and friendly) employer.
John Chambers, its CEO, measured referrals as a key performance indicator and kept employ-
ees on track with the program when numbers slipped. And the mountain of press generated
about the innovative program helped turn it into a magnet employer.

Cisco, the Silicon Valley high-flier, literally can't hire fast enough. Last year it hired an aver-
age of 1,000 people every three months, and still had hundreds of jobs it couldn't fill. Its re-
sponse was the Friends program. Launched in April 1996, the message was simple: If you have
a friend at Cisco, give them a call -- there might be a job waiting for you! If you don't have a
friend at Cisco, visit our Web site and we'll find one for you. Your new friend will teach you
about the company, introduce you to the right people, and lead you through the hiring proc-
ess.

Dawn Wilson doesn't remember exactly how long it took -- six days maybe, no more than
eight. But it was fast. Wilson, a printed-circuit board (PCB) designer at Tandem Computer,
was surfing the Net and landed at Cisco Systems (http://www.cisco.com). She saw a fun-
looking button in the screen corner inviting visitors to "make friends @ Cisco." She clicked on
the button and whoosh -- she was swept into the company's recruiting pipeline. Wilson was
contacted by Cisco, evaluated by engineers and managers, and offered a job -- in less time
than most companies take to scan a résumé into their HR databases.

Michael McNeal, Cisco's director of corporate employment, says Friends is designed to "put
some grace into the hiring process." All too often, he complains, recruiting is slow and imper-
sonal -- for companies as well as candidates. And too many recruiting programs ignore the
fact that most people evaluate new jobs through personal networking.

The day after Wilson clicked on the Friends button, for example, Jaime Gonzalez, a lanky,
soft-spoken PCB designer, phoned her at home and talked about life at Cisco. He described its
blazingly fast design-to-production cycles, its wide-open atmosphere, and what it was like to
work for his boss. He also prescreened (informally) Wilson's credentials. After the call Gon-
zalez emailed human resources to report that he had "befriended" Wilson and told his boss
about a potential new hire.

A few days later Wilson visited Cisco and met her new friend, along with a bunch of his col-
leagues. Wilson says she was unusually relaxed during the visit because she felt like she knew
some of the people already. That's the point. In some respects Friends is simply a next gen-
eration version of an employee-referral program.

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Indeed old-style referrals remain a critical part of Cisco's hiring strategy. The company offers
employees $1,000 every time it hires someone they referred. The day they make the referral
they also get a Cisco Lotto card. Lotto winners receive mugs, athletic bags, and wildly popu-
lar stainless steel commuter mugs.

Referral rates at Cisco are twice the industry norm (Referrals and the Friends program now
account for an astounding 50% to 60% of all new hires.). That creates a performance edge be-
cause referrals tend to yield qualified employees with long tenures; people are putting their
reputations on the line. CEO John Chambers tracks referral rates as a key performance indica-
tor and needles his staff if the numbers slip.

One of the first companies to create a "labor supply chain" is oil refining giant Valero Energy,
whose headcount exploded elevenfold over the past six years--from 2,000 employees in 2000
to about 5,000 in 2002 to 22,000 today.

In January 2004, the San Antonio company launched a computerized system designed to speed
up the way it finds talent, reduce costs and better serve an ever-more international company.

Project designer Dan Hilbert, Valero's employment manager, says starting up a new refining
complex can require the skills of internal and external employees from around the world.
"Project managers might be in the United States, combined with outsourced engineers from
Canada, plus programmers in India and manufacturing workers in China," he says.

The company’s labor supply chain is a system for closely monitoring steps in recruiting and
hiring. It begins with an analytic tool that predicts the company’s labor needs based on past
experience. It also includes computer screen "dashboards" that show how various components
in the chain, such as ads placed on Internet job boards, are performing according to cost,
speed, quality and dependability.

The candidate experience utilizes a customer relationship management approach. The de-
partment has a heavy focus on improving the candidate experience, both to increase its offer
acceptance rate and to improve its brand image. Their approach utilizes customer-
relationship-management-like tools to ensure that all candidates feel they are getting timely
and “personalized” responses to their applications. Some of the things they do to improve the
candidate experience include: a quick, time-saving, single-click application process, a refer-
ral system, at least three personalized emails to each candidate throughout the application
process, and a postcard in the mail after the job is closed.

If the dashboard shows "green," performance is good. If it shows "yellow" or "red." Valero
staffing managers can intervene quickly to fix the problem--which could mean switching from
a job board if the site leads to low-quality hires.

The outcomes are impressive. In 2002, it took 41 pieces of paper to hire someone and more
than 120 days to fill an open position. Each hire cost about $12,000. With the labor supply

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chain in place, little paper is needed to bring someone aboard, the time-to-fill figure is below
40 days and cost per hire dropped to $2,300 last year, Hilbert says. In 2004, Valero’s so-called
recruiting efficiency index--a ratio of staffing costs to the amount of compensation added to
the firm--was a remarkably low 6.9.

Part of what fueled the firm’s labor supply chain was high-octane growth through acquisi-
tions. The company ranked 22nd on the Fortune 500 list last year and boasts annual revenue
of $75 billion.

Valero hired Hilbert in 2002 to modernize its staffing. The 50-year-old executive, who has
worked as both a recruiter and the CEO of an Internet startup, says his first steps were to
map out the staffing department’s processes and quantify its results. "To me it’s just Ac-
counting 101," he says.

Hilbert also tried a new way to hire for the staffing department. Rather than add to Va-
lero's dozen or so full-time recruiters, he tapped temporary workers, contractors and college
interns as the workload grew. And it mushroomed: Last year, monthly job openings at refinery
operations soared from 25 to more than 150. The additional staffing department workers gen-
erally cost about half or less than the $40 to $50 per hour that a permanent Valero recruiter
does, and their number has fallen from a peak of seven to two as demand tapered off.

With contingent workers a dip in productivity might be expected, but the opposite oc-
curred. Hilbert says that’s because everyone took on specialist roles--from recruiters who
worked more closely with hiring managers to interns who took pride in finding the perfect
niche job boards for postings.

For using technology and streamlined practices to create one of the first labor supply chains,
Valero is the winner of the 2006 Optimas Award for Innovation. Valero does a superb job of
marketing the benefits of working for Valero to its employees. According to Hilbert, “their
very happy employee base is an energized and mobilized recruiting machine” that accounts
for over 30% of all positions filled.

Michael Homula has helped Quicken Loans to create an employee referral program that turns
every employee into a "talent scout." The referral program relies on frequent refreshing, cre-
ative approaches, and extensive promotion to drive high-volume participation.

According to Mr. Homula, 64 percent of new hires begin as referrals from current employees.
The company has a team of full-time talent scouts whose sole job is to encourage employees
to refer friends, classmates and others in their personal networks, and to give these referrals
special attention. "We've turned 3,400 people into a massive recruiting force," Mr. Homula
said.
For example, the organization went through training to remind all employees of their role in
helping to meet its hiring targets. As part of the program, employees received packs of base-
ball-style trading cards, complete with chewing gum. Each pack contained nine cards, called

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Career of Dreams cards, that featured photographs of all-star recruits who had joined the
company through referrals. The theme of the cards was, "If you call them, they will come."

The program is so effective that 61 percent of hires come from the ERP each month.

Best practices:

• All referrals are contacted by a live program coordinator within 48 hours of submis-
sion.
• Utilizes highly branded contests (example — a contest for finding the best salesperson
in the Detroit area), in addition to bonuses to drive participation. Such contests offer
unique and highly valued prizes.
• Referring team members are kept in the loop through a web portal that allows them to
track the status of referrals online and by emails that update them when:

− The referral has been initially contacted.

− An interview is scheduled.
− A post-interview decision has been reached. To move forward, the system ad-
vises recruiters and managers of the next steps.
− A hire is actually completed.

• Surveys are periodically conducted internally to measure:

− Employee satisfaction with the program.

− Ease of process.
− Referral "experience."
− Employee motivation and their willingness to refer.

• Focus groups are held periodically to generate new ideas for contests and promotions
and to gather feedback on the current process.
• They provide training to employees on how to better make referrals.
• In addition to process metrics, Quicken Loans tracks retention by source, quality of
hire, and cost per hire.
• Bonuses are grossed up to cover taxes.
• A proactive referral process approaches key individuals directly for high-quality refer-
rals.
• Extensive e-mail marketing is delivered to the target employee population to:

− Educate them on current hiring needs.

− Drive referral for specific types of jobs.

In 2006, AmTrust launched a new employee referral program called LINX. What makes this
program unique is the prompt attention given to referrals, the tips and tools developed to

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ease the referral process for employees, and the rewards and recognition of participants to
increase employee awareness.

AmTrust hired a LINX Coordinator whose sole responsibility is to manage the LINX Referral
Program. This individual ensures a high level of responsiveness to referrals and LINX partici-
pants.
Participants that provide successful referrals receive bonuses of anywhere between $500 and
$5,000, and are also eligible for future drawings on prizes. The company’s intranet also has a
page called the “LINX All-Star Page” that is dedicated to displaying and recognizing successful
LINX participants. The program has demonstrated immediate success. An impressive 40% of all
external hires were sourced through the LINX program in 2006.

When employees make referrals, bank recruiters quickly contact those people. Through the
Linx program, employees are kept up to date on the status of their referral's interviewing and
selection process. In addition, a separate Linx Web site provides employees with tools and
ideas on how to recruit and what to say to prospective employees, how to describe AmTrust's
culture and what it's like to work there.

"Our program educates employees on the basics on how to recruit because most of us are not
natural recruiters," explains Ron Bower, AmTrust's director of recruiting. "We spend a lot of
time and work on the educational part."

The referral team uses a variety of ways to call attention to the employee-referral program.
It has its own brand to project a positive look and feel and to help the program stand out
above the many messages employees are already bombarded with daily. The team also devel-
oped graphics and messages for computer screensavers, hallway posters and other print and
Web-based materials.

"We post articles about the program on our company intranet from time to time, remind our
managers to bring up the program during their staff meetings and our team members make
visits to the branches to create some excitement and interest among our employees about the
program," explains Bower.

Please find below some more details about Employee Referral program at AmTrust:

Quality of Source: Year One Turnover

Source 2005 2006 2007

Employee Insufficient 27.44% 16.50%

Referrals Data
Agencies “ 34.52% 4.55%

Internet “ 37.38% 24.66%

Average for “ 38.84% 20.98%

all sources

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Recruiting Expenses
Category 2005 2006 2007 Change

Salaries 690,000 751,000 1,000,000 + 310,000

ERP 91,000 110,000 191,000 + 100,000

Agencies 1,400,000 823,000 335,000 - 1,065,000

All In 4,300,000 3,467,000 2,900,000 - 1,400,000

Recruiting Force
Category 2005 2006 2007
# Recruiters 5 7 7

# Coordinators 0 2 3

# supporting 0 1 1+
ERP
Average 25 16 12
Requisition load
Total hires 864 786 961

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Other examples at glance

Johnson & Johnson had an employee referral program for years, but last year the employer
re-energized efforts by rolling out "Efferal." The "E" stands for electronic and employee refer-
ral, says Ellen Gilbert, director of recruitment marketing at Johnson & Johnson in Raritan,
N.J. "We wanted to promote the use of the Internet because a company goal is to better lev-
erage our intranet and the Internet."

Along with publicizing ER "success stories" on Johnson & Johnson's intranet and using banner
ads and posters, the company designed Tylenol medicine boxes with the Efferal theme that
were given away on kick-off day.

The company didn't change the cash awards. "What has changed is the interpersonal commu-
nication and promoting the satisfaction an employee receives from connecting a friend with a
great opportunity," says Gilbert.

Referral awards are paid two weeks after the new employee's start date. "We don't build time
into the system. We've found that there's a real drop-off in interest if we wait 90 days," Gil-
bert says. "Employees get a real sense of gratification when the payout is immediate."

Nortel Networks, the world's second-largest maker of network equipment, has upped the ante
in the war for talent: It's offering $1 million in cash and prizes to employees who entice
skilled contacts to join the company. This, despite the fact that referrals already account for
nearly half of Nortel's hires in North America.

The Canadian technology giant needs to fill 5,300 optical Internet positions (mostly in the
United States and United Kingdom), so it's asking employees to refer family, friends, and their
best-skilled acquaintances. It's paying its employees $2,000 for every new hire they refer, and
enters each such referring employee in lotteries that promise $100,000 payoffs. The com-
pany's million-dollar publicity stunt has already garnered more than 2,000 applications.

Primedica Corp., a Horsham, Pa.-based pharmaceutical research company, a division of

Charles River Laboratories, has witnessed the power of revamping referral efforts. Before the
revamp, about 20 resumes annually were received via employee referrals.

In the first 11 months of Primedica's "Sea Green" referral campaign that started last year, 220
resumes surfaced. In the same time frame, 60 percent of hires at one research site came
from employee referrals, says Carol Kline, director of human resources.

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Kline created the "Sea Green Employee Referral Program," which incorporates a scratch-off,
lizard-green-lottery-style card that employees receive when they hand in a "resume or appli-
cation for a candidate qualified for a posted job opening," Kline says. "The card enables them
to win something for their efforts immediately."

Prizes include a free vacation day, travel mug, "See Green" T-shirt or a video store gift card.
Primedica awards $500 to each employee who refers a successful hire once the new hire has
been employed for 90 days.

A unique feature of Johnson & Johnson's program is that practically all employees, regardless
of their position level within the company, are eligible for the cash awards. "This includes
vice presidents and higher," Gilbert says. "We also include HR people, as long as they are not
directly involved in any part of the recruitment process for the specific job."

At Lincoln Financial Group in Hartford, Conn., the employee referral program contributes sig-
nificantly to the company's low staffing cost ratio of 10.9 percent (or cents for every dollar of
compensation recruited). Fifty-five percent of Lincoln Financial's external hires—at all lev-
els—are recruited via the employee referral program. For example, during a six-month period
last year, five senior-level positions were filled through the program.

"Absolutely the best employees come from employee referral programs," says recruiting man-
ager Jerry Holt. Holt works for Dazel, a Hewlett-Packard software division. Dazel offers bo-
nuses to its referring employees after the referred hire has been with the company for three
months. The company also deposits a separate amount into a pot. At the end of the year, the
accumulated pot gets split between three lucky referring employees, 50 percent, 25 percent,
and 25 percent. If enough employees make qualified referrals, that pot can get to be a pretty
nice size. It won't get you a Porsche," Holt says, but it might help you out with a Mustang.
Holt sees employee referral programs as being the No. 1 most effective strategy. "Dazel's is a
great program. It gets the attention of employees to think for five minutes a day about who
would like to be a part of the team," Holt says.

Angela Greenfeather, Recruiting Operations Program Coordinator of Sabre Inc., in Fort Worth,
said the company’s employee referral program is one of the most inexpensive and effective
recruiting methods. In the first 24 months, the program generated over 7,000 resumes. How
does Sabre do it? It awards cash (from $100 - $1,000 based upon position) to the referring
employee. In just over two years, the program has paid out over $450,000, while still saving

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Sabre almost $1,000,000 in recruiting expenses. The employee referrals are paid within 30
days of the new hire start date.

Sabre has now taken its program to the next level by introducing an Internet strategy called
Networking@Sabre. This internet-based program is designed to attract candidates to the firm
by connecting them to an employee (a "Sabre friend") who shares the same career objective.
By accessing the icon on the Sabre career site, the candidate may ask questions about Sabre.
Their questions are directed to a Sabre friend. The Sabre friend contacts the candidate within
48 hours of receiving the questions. After dialog, the Sabre friend submits the resume of the
potential candidate to the firm and then is eligible to receive the employee referral. Sabre
friends and the employee referral program generate over 41 percent of all hires.

At The Associates, in Irving, Assistant Director of Human Resources Nichole Moseley has seen
employee referrals increase tremendously. Employee referrals once accounted for a "mere" 35
percent of the company’s applicant base, with 28 percent of those applicants being hired.
With some program enhancements made May 1, 2000, that program now is responsible for 56
percent of the hires. The Associates pays a referral bonus of $500 for general employees and
$1,500 for exempt, with one-half paid when the person is hired and the second half paid in
six months. For information systems employees, the referring employee receives $6,000, with
one-third paid at hire and the remainder paid after one year. Ms. Moseley said the company
also offer special referrals based on specific business needs.

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Examples of Referral Program Guidelines.

Example 1: www.hospitalreferralreward.com

I. GUIDELINES:

• A facility will pay monetary Referral Rewards to eligible employees who refer qualified
external candidates who are hired into eligible positions posted on the particular facil-
ity’s page of the National Employee Referral Web Site.

− Referral Rewards will be paid for referrals to Full-time and Part-time eligible
positions.
− Referral Reward eligible positions are: RN, Pharmacist, Physical Therapist, Oc-
cupational Therapist, Speech and Language Pathologist and “Hard to Fill” posi-
tions as designated by each facility.
− Referral Rewards will also be paid for Per Diem conversions to Full-time or
Part-time eligible positions if the conversion occurs within six (6) months of the
original hire date of the employee being referred. The referral must have been
made according to Section III (1) below at or before the time of the original
hire date of the employee being referred - not the conversion or status change
date.
− Featured Jobs are posted locally by each facility. Visit the National Employee
Referral Web Site, www.hospitalreferralreward.com, to see the Featured Jobs
of a particular facility or contact the facility’s HR department.
− Not all positions are eligible for a Referral Reward. All facilities will gladly ac-
cept referrals on General Jobs, but no Referral Reward will be paid. Addition-
ally, facilities have the flexibility to continue existing Per Diem referral reward
programs, but those programs operate outside of the ERP and are not governed
by these guidelines.
− PFS (Patient Financial Services) does not participate in the ERP but may reward
referrals according to other applicable programs.

• The guidelines governing eligibility to participate in the ERP are:

− Most active Tenet employees, including Per Diem, Part-time, Full-time with
benefits, and Full-time without benefits are eligible to participate in the ERP.
− Employees who are not eligible include:

ƒ Corporate Officers (VP and above)

ƒ All A-Team members (on corporate payroll)
ƒ Department Directors, Managers and Supervisors who are the sole hiring
decision-makers on an applicant
ƒ Any employee working in Human Resources
ƒ Staffing office Directors, Supervisors, and Coordinators
ƒ Individuals who are not employees of a Tenet facility, i.e. agency, out-
side contractors, and outside vendors

***Questions regarding the eligibility of any other employee or position should be re-
ferred to the facility’s Human Resources Director (HRD) or the Regional Recruiting Di-
rector. Only the HRD is authorized to make final decisions regarding eligibility, par-
ticipation, and payment of a Referral Reward.***

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• Referral Rewards will be paid only for qualified “external” candidates hired in to an
eligible position.

− The referred employee must be hired by a Tenet facility for a Full-time or Part-
time eligible position.
− If the referred employee is a former employee of a Tenet facility, they must be
eligible for rehire, and must have had a break in employment from any Tenet
facility for more than six (6) consecutive months.
− Facilities are not obligated to hire an applicant referred by an employee.

• Referral Rewards will be paid when an eligible referral is made in accordance with the
guidelines of the ERP:

− There is no limit to the number of referrals an employee can submit or Referral

Rewards an eligible employee can receive under the ERP.
− Minimum Referral Rewards are:
Position Minimum Referral Reward
RN (Registered Nurse) – any position for which $3,000 (Full-Time)
RN license is required or preferred $1,500 (Part-Time)
Pharmacist
Physical Therapist
Occupational Therapist
Speech & Language Pathologist
“Hard To Fill” - Each facility establishes these $1,500 (Full-Time)
eligible positions and controls campaign time $ 750 (Part-Time)
limits (i.e., the time period in which referrals
will be accepted).

− Referral Rewards are paid to eligible referring employees by check or direct

deposit in 2 installments: 1) 50% of the gross amount of the Referral Reward af-
ter the referred employee completes 90 calendar days of employment in the
eligible position; and 2) the remainder at the time the referred employee com-
pletes one year of employment in the eligible position.
− Referral Reward payments shall be scheduled once the hire date of the re-
ferred employee has been validated. Both the referring employee and referred
employee must be employed by a Tenet facility in eligible positions at the time
of the scheduled payments. No Referral Reward payments will be made to em-
ployees not then employed in eligible positions.
− If the referred employee separates employment or otherwise ceases to be em-
ployed in an eligible position under the ERP at any time within one year of
hire, no further Referral Reward payments will be made to the referring em-
ployee with respect to that referral.
− If the referred employee converts from an eligible Full-time or Part-time status
in an eligible position under the ERP at any time within one year of hire, the
HRD will have the sole discretion as to whether further Referral Reward pay-
ments will be made to the referring employee with respect to that referral.
− Partial payments or prorated payments of a Referral Reward will not be made
to a referring employee.
− If two or more eligible employees refer the same qualified applicant to the
same eligible position under the ERP, and the referred applicant is hired into
an eligible position, any Referral Reward will be split evenly among the refer-

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ring employees regardless of the means of submission of the referral under Sec-
tion III (1) of these guidelines.
− In instances where disputes arise from Referral Reward payments, the HRD has
the authority to interpret and apply these ERP guidelines appropriately.
− Referral Rewards are considered taxable income and are subject to IRS taxes
and withholdings.
− An attempted referral under the ERP, even if made in accordance with Section
III (1) below, will not be eligible for a Referral Reward if the referral is made
after the hire date of the referred employee.

II. PROCEDURE:

• An eligible employee makes a referral of a qualified external candidate under the ERP
when:

− the eligible employee accesses the National Employee Referral Web Site,
www.hospitalreferralreward.com, and enters the referred applicant’s informa-
tion; or
− the referred applicant lists the eligible employee’s name on the application as
the referring employee when applying for an eligible position at the facility’s
website or the Career Center of the Tenet Healthcare website; or
− The referred applicant submits a referral card with the referred employee’s
name to the Recruiter in the Human Resource department, and the Recruiter
enters the referral into the system.

• Faxes, handwritten forms, memos, phone calls, or other correspondence will not qual-
ify as a referral.
• When an eligible referral qualifies for a Referral Reward under the ERP, the facility’s
Human Resource Department will notify the referring employee and the facility’s Pay-
roll Department to coordinate the appropriate timing and payment of the Referral Re-
ward.
• The HRD has the authority to interpret and apply the ERP guidelines as outlined above.
• Any concerns or disputes regarding the administration of the ERP, including fraud,
abuse, or misrepresentation should be immediately reported to the applicable facil-
ity’s HRD.
• Audit Services may periodically conduct audits of the ERP.
• The HRD has the authority to investigate and resolve any issues regarding the admini-
stration of the program and has sole discretion to require verification of any referral.
• In those instances where verification is required, the referred employee will sign a re-
ferral verification confirming the referral of record on the referral website and/or ap-
plication.

Eligibility for or participation in the ERP does not alter the at-will nature of the employment
of any employee. The ERP can be modified or discontinued at any time at the discretion of
Tenet’s corporate Human Resources.

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Example 2: Fair Isaac

Who is eligible to participate?

All active Fair Isaac employees are eligible to participate in this program EXCEPT:
HR and Recruiting Solutions Staff; employees directly involved in a referred candidate’s hir-
ing; CEO and VP-level employees; and temps, contractors, vendors; or any other non-
employees of Fair Isaac.

How does the Employee Referral Program work?

First, you’ll submit all referrals online through the Human Resources page of the Corporate
Information Center (CIC). Click on the Find Jobs link on the left to gain access to current job
listings and their requisition numbers.

Ok, you’ve referred someone amazing. We’ve hired them. What’s next?

Your referral bonus (less all applicable withholding taxes) is generally paid on the first avail-
able payroll cycle after the referred employee completes 30 days of employment.

Referral Bonuses are as follows:

Pay Band
For A Candidate Hired In
A B, C or D E, F or Hard to Fill
US $500 $2,500 $5,000
UK 300 GBP 1,500 GBP 3,000 GBP
Singapore 1,000 SGD 4,000 SGD 8,000 SGD
Japan 50,000 JPY 300,000 JPY 600,000 JPY
India 20,000 INR 60,000 INR 120,000 INR
Europe 400 EUR 2,000 EUR 4,000 EUR
Brazil 1,000 BRL 5,000 BRL 10,000 BRL

*Bonuses applicable to individuals assigned to any country not listed above will be determined
by applying a 6-month average currency conversion rate to the US equivalent.

Employee Referral Program Rules

For all of the details on the Employee Referral program, please refer to the Employee Refer-
ral Program Policy at by clicking on the link to the left.
Recruiting Solutions will handle all payment coordination.

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Example 3: Northrop Grumman

Rules and Guidelines

The Joint Referral Campaign for Northrop Grumman’s Information Technology and Mission
Systems Sectors.

Northrop Grumman’s Information Technology and Mission Systems sectors have joined to give
you one more way to earn referral bonuses. Now it PAY$ to refer a friend to both sectors.

To receive an employee referral award, the following criteria must be met:

Employee Eligibility

• You must be a current Information Technology or Mission Systems sector employee at

the time of the award payout.
• Hiring managers are eligible to receive an award for referring a candidate to a position
that is NOT under their direction.
• Annual Incentive Plan (AIP) employees and employees whose primary function involves
the recruiting or hiring of Northrop Grumman employees are not eligible to receive
awards.

Candidate Eligibility

• Information Technology and Mission Systems sector candidate positions eligible for
employee referral awards are identified with a red asterisk (*) on the Northrop Grum-
man Careers Web site.
• Candidates must meet the basic qualifications for employee referral award-eligible
positions.
• Candidates must accept an offer of full or part-time employment into an award-
eligible position. Full or part-time positions do not include summer hires, internships,
on-call or temporary positions.
• Candidates must not be a former employee, co-op, intern, on-call employee, consult-
ant, contractor or currently employed in a temporary employment status by Northrop
Grumman or its subsidiaries. (Information Technology will honor any candidate listed
above who has not worked for Northrop Grumman within the past 12 months.)

How to Submit a Referral

• Referrals should be submitted online. Click here to submit a referral.

Award Eligibility

• The Employee Referral Award Program Offices will determine whether or not all con-
ditions for award eligibility have been met after the referral's start date. In the event
the same candidate is referred by more than one employee or by more than one
source, the award determination will be paid based on the earliest recorded referral
date or the receipt date of referrals from other sources. Once your referral has
agreed to be submitted and updated/confirmed the profile you initiated for them,
you will receive an email from NGC. This will be a referral confirmation for you.
In the event of a dispute, you will need to produce this email, entitled: “Profile Up-
date Alert”. An award may be withheld if the employee making the referral cannot
produce this email at the time of the award determination.

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• The company reserves the right to determine which positions will qualify for an award,
and may change the amount of the award. Referral Awards will be based on the em-
ployee referral award values at the time of the referral’s start date.
• All referral award incentives are subject to tax withholding.

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Appendix 1: Sponsor ads

FaceContact.com is a free online tool for Referral Program

management.
FaceContact.com manages the whole process from the initial job distribution to the hiring.

Basic version (FREE).

1) Job Distribution
− Links. Send referral tracking links through email or other channels. Personal-
ized mass Job Emails distribution. Contacts uploading from almost any address
book (Outlook, Linkedin, Plaxo, Gmail, Yahoo, CSV and more).
− Widgets. Posting of jobs on a corporate website via job widgets. It make pos-
sible to manage corporate job board without admin help.

2) Referrals Tracking & follow-up

− Online dashboard. All candidates and referrers are shown on one dashboard.
− Online referrals. Simple and effective online application and referrals proc-
esses.
− Rapid follow-up. Referrers and candidates can see their status in job online
and receiver reminders.
− Non-employee option. You can use your company clients and friends to find
new candidates. You can also track several referrals in a chain to get access to
new referrers and candidates pool (acquaintances of acquaintances).

3) Bonus feature

− Free job posting to reach 15,000,000 active job candidates through Indeed,
Simplyhired, Myspace, Google base and others.

Premium features

− Payments and taxation processing.

− Setup of own job website with editable job board.
− Referrals cards management.

Pro version.
− Job posting on the Recruiters Marketplace - community of thousands profes-
sional recruiters.

Visit www.facecontact.com for more details.

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Appendix 2: List of links of related or used articles.

1) 55 Low-Cost Ways to Recruit Nurses, by Dr. John Sullivan May 7, 2007

2) 6 Ways Recruiters Can Support Building a Better Organization, by Howard

Adamsky,Dec 6, 2005

3) Assessing Employee Referral Programs: A Checklist, by Dr. John Sullivan,

Sep 12, 2005

4) Assessing Employee Referral Programs: A Checklist, by Dr. John Sullivan,

Sep 12, 2005

5) Best Recruiting Practices from the World’s Most Business-like Recruiting Func-
tion, Part 3, by Dr. John Sullivan, Oct 3, 2005

6) Budgeting for a World-Class Employee Referral Program, by Dr. John Sullivan

Mar 24, 2008

7) Building a Recruiting Culture — the Ultimate Strategy, Part 1, by Dr. John Sulli-
van, May 1, 2006

8) Building a Recruiting Culture, Part 2, by Dr. John Sullivan, May 8, 2006

9) Candidate Relationship Management by Kevin Wheeler, Feb 1, 2007

10) DO EMPLOYEE REFERRAL PROGRAMS REALLY WORK? By Mary Cheddie, SPHR

11) Do Your Hiring Processes Earn You Money or Cost You?, by Lou Adler,
Dec 16, 2005

12) Effective Approaches for Attracting Competitors’TMP Launches Employee Re-

ferral Program on Facebook, by John Zappe, Nov 29, 2007, 10:49 am ET, Em-
ployees to Your Firm, by Dr. John Sullivan, Mar 3, 2008

13) Employee Referral Program Killers, by Dr. John Sullivan, May 5, 2008

14) Employee Referral Programs (ERPs)

15) Five Great Things You Can Do Today to Find More Great People Tomorrow, by
Lou Adler, Aug 18, 2006

16) Google Continues to Innovate in Recruiting and Candidate Assessment, by Dr.

John Sullivan, Jan 8, 2007

17) How Cisco Makes Friends, By: Bill Birchard

18) How Does Your Employee Referral Program Stack Up? by Dr. John Sullivan,
Feb 13, 2006

19) How Kevin Bacon Can Help You Recruit No-Cost Referrals, by Dr. John Sullivan,
Jul 24, 2006

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20) Increase Your Company’s Recruiting Staff Overnight, by Leslie Stevens,

Apr 1, 2008, 5:15 pm ET

21) INTEGRIS Health Employee Drives Away in a New Toyota Prius

22) Managing: Starting an employee referral bonus program, Eric Walter

23) Metrics for Improving Referral Program Effectiveness, by Dr. John Sullivan,
Jan 30, 2006

24) Metrics That Matter, Michelle Martinez

25) Operating Referral Programs on a Limited Budget, by Dr. John Sullivan,

May 28, 2007

26) Progressive Referral-Base Networking, by Mike Nale, Jul 31, 2007

27) REELING THEM IN: THE ART OF EMPLOYEE REFERRAL PROGRAMS, By Andrea C.
Poe

28) Referral Cards Can Wow Those You Meet, by , Dr. John Sullivan, Jan 21, 2008

29) Referral Programs Can Produce Millions in Business Impacts, by Dr. John Sulli-
van, Jan 23, 2006

30) Six Best Practices in Recruiting , By Dr. John Sullivan & Master Burnett

31) Source of Hire: What a Difference Three Years Makes by Todd Raphael
May 7, 2008, 10:25 am ET.

32) The Future of Contingent Search, by Dr. John Sullivan, Jun 19, 2006

33) The Future of Employee Referral Programs, by Dave Lefkow, Feb 9, 2006

34) Turn Employees Into Recruiters, Michelle Martinez

35) Upgrading or Reenergizing Your Referral Program, by Dr. John Sullivan,

Feb 6, 2006

36) Using Messaging Campaigns to Spur Employee Referrals by Dr. John Sullivan,
May 12, 2008

37) Where Have the Diamond Mines Gone? by Kevin Wheeler, Dec 8, 2005

38) Who’s the Best Java Developer You Know?, by Howard Adamsky,Jun 12, 2007

39) With European Online Networking, Relationships Precede Business, by Todd Ra-
phael, Jun 8, 2006, 9:55 pm ET

40) Your Employee Referral Programs: Kick it Up a Notch!, By Davis Advertising.

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