Written by Ziv Eliraz, CEO, Zao

There’s a reason why employee referrals are touted as the #1 hiring source. Each referral is a credible thumbs-up from a trusted member of your organization, confirming that the candidate is qualified for the job and will fit-in with your culture. Plus, when tons of people are responding to your job postings, referrals can be an effective way to separate the good from the bad, while accelerating time-to-hire.

It’s all good. So, why not expand that model?

Traditionally, referral programs have been built around an organization’s internal network, with employees identifying likely prospects. However, smart companies understand that their external network is filled with potential sourcing allies — business partners, vendors, professional peers, college connections, even former employees. It just takes a different approach to get them on board.

Four ways to extend your referral program reach:

1) Incorporate Rewards

Relevant rewards can be a powerful incentive. Plus, they work. Research shows that when companies offered rewards to trusted members of their external network, 41% of referral hires came from those non-employees. As a result, referral hires were 69% higher than through employee channels, alone.

Tip:  Make sure the value of the reward is calibrated to the business result. For example, a token gift card or social recognition could be given to acknowledge a hot lead — while cash compensation would be more appropriate when a referral is interviewed or hired.

2) Go Mobile

Consider contractors and other virtual contributors members of your workforce. Although they may not be employees, they can still provide value through referrals. However, because many operate from remote locations, your referral program should be accessible on-the-go — through smartphones, tablets, or other mobile devices. This lets your external network easily refer candidates wherever and whenever the opportunity strikes.

Tip:  Create an employee referral app or a mobile-accessible portal that is tailored specifically for external network members. This helps them feel like they’re part of the program, and makes it convenient to participate.

3) Automate The Process
While your external network can make a significant contribution to your referral pipeline, recommending candidates is an added duty they must perform without immediate reinforcement. Try to make the referral process as quick and easy as possible by automating the process. New technologies can automatically compile jobs, sending relevant reminders to the correct people at the right time, and recommending appropriate next-step actions. Automation not only keeps the referral program continuously active, but also guides your external stakeholders in their role.

Tip:  Rolling “push” communication is a smart idea. For example, you can automatically share job updates every Wednesday at 3 p.m., or whenever your network is most active. That way, your program participants learn when to expect information. Also, it’s wise to personalize message content — sending relevant messages to the right people. This avoids frustration for participants, who would otherwise have to search for information they need.

4) Incorporate Game Dynamics

Gamification uses game-based strategy, learning and mechanics to increase engagement in non-game systems. While it may seem like an uncommon strategy, 70% of the world’s top 2,000 public companies will have integrated gamification into at least one business application by 2014. In this case, it can be a fun way to involve external parties in your referral process, using quick feedback, creating friendly competitive challenges and other methods that keep your participants engaged.

Tip:  A great way to introduce game dynamics is through a leaderboard or a point-based tracking system. Members of your network can see how they’re contributing to the overall referral process, and see how they compare with top performers. This not only creates a sense of friendly rivalry, but also offers ongoing feedback that helps remind participants that their recommendations are not being ignored.

Tap Into Your Full Sourcing Potential

Of course, employee-only referral programs aren’t a bad idea. However, at some point, there is a limit to how many people an individual employee knows directly. While your internal network can provide some excellent referrals, your external network can amp up the quality and diversity of potential hires. Although you may not think of external allies first, they can be a great referral resource because they understand your organization’s culture, they know your business needs, and they often have a vested interest in your success.

What do you think? Do you involve your external network in the employee referral process? What kind of results have you seen?

(About the Author: Ziv Eliraz is Founder and CEO of Zao, social employee referral platform. Connect with Ziv on LinkedIn and Zao on Twitter and Facebook.)

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