employee referral program

Incentivize Caregiver Recruitment

employee referral programEvery agency owner in home care tells me they have an employee referral program. However, most are unhappy with its results. Why is that?

In the 2016 Best Caregiver Study, Leading Home Care found the “number one way that top caregivers learned about their current employer was through other employees.” Another finding of the study was the majority of caregivers are “more likely to refer a friend when there is a referral bonus.”

Although this study was conducted on a small sample (120 caregivers, 9 agencies), the data gives an indication of what works in employee referral programs:

  • Using your employees as recruiters is important to attract some of the best caregivers,
  • Having a financial incentive is important to get results.

Here’s what I have learned from talking to many in the home care world:

  • Having a referral program isn’t enough. Like many things in business, the gold is in the implementation. I know it’s obvious but many have developed a program but failed to share its specifics with employees.
  • Have a communication strategy. Most agencies mention the referral program at Orientation and assume caregivers know it exists. But in the information overload of Orientation, most caregivers will not remember it exists when the opportunity to refer a friend or family member strikes. Having a communication strategy is more than “reminding” employees. In fact, given the high turnover rate in most agencies, there is a good chance most caregivers have not heard about the referral program if you only remind them every so often. Create a communication campaign to promote and illustrate the successes of your referral program. Mention in your employee newsletter / news alerts. Award cash bonus in hand at employee meetings.
  • Structure. There are different schools of thought on how to structure a referral program. Most agree that the pay-out should happen after the new hire has worked for a number of hours. The idea is to avoid new hires showing up for Orientation only, the referral pocketing the money  and no valuable work was performed. On the other hand, you don’t want to wait too long before paying out. Most agencies pay the award after the new hire has worked between 2 and 4 weeks. In some cases, it’s based on the number of hours worked. Ninety hours is an average that seems to make sense for many.

    • The amount of the award varies widely. I have heard as low as $25 and as high as $350 per referral. First, find out what others in your market pay in referral bonuses. You want to be competitive. Consider what you can afford. Edge on the side of generous. Employees who come through a referral tend to have a longer tenure than those recruited through online job posts. When determining your bonus amount, keep in mind the cost of turnover and factor its mitigation in your calculation.
    • Keep it fresh. Employees will tune you out if you keep bringing the “same old, same old.” Think of ways to perk caregivers’ interest around the referral program: organize a context one month. Look back on your long-term caregivers and identify those who came through a referral. Feature them in the newsletter. That’s when the communication strategy comes into play. Have a plan for different messages or tactics every month. Don’t improvise your strategy.
    • Measure and assess what’s working. You know I am a “system person.” When you implement a new program, you need to track it. Track how many caregivers are hired as referrals. Identify who your top referral employees are. Measure the employment tenure of your referred caregivers. Analyze the data every month, every quarter and every year. Learn and adjust going forward.

Employee referral is one piece of the recruitment plan. There is a lot more to successful caregiver recruitment. Contact me for an assessment of your recruitment plan and to learn how you can tweak it to get better results.

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