How Cisco Meraki achieved a 35% new hire referral rate
5 mins, 45 secs read time
Many would say that there’s no tool more powerful in recruiting than a strong employee referral program. Referred talent is the #1 source of new hire quality, showing high retention rates, engagement, and performance.
Greenhouse customer Cisco Meraki is proof. We recently sat down with Eryn Marshall, Director of Global Sales Recruiting, to learn more about how the company’s employee referral program has evolved from having minimal impact to being a key driver in making quality hires in their sales department, with 35% of new hires resulting from employee referrals.
The original employee referral program
Originally, the sales team’s employee referral program was pretty unknown by most sales employees – it lacked promotion, process, and overall inspiration. An employee could refer a friend to the company and would receive a nice sum of $1,500 within two or three pay cycles if the person was hired. The guidelines were cut-and-dried (and the reward was received fairly quickly compared with other companies), but there was no other compelling aspect of the process. Thus, it lacked participation, and as a result, employee referrals were not a core producer of candidates.
The recruiting team knew that if it was going to stay competitive in the marketplace and not lose great talent to another company that found them first, something had to change. The team decided to alter its approach, knowing that an employee referral program was a huge opportunity that shouldn’t go to waste. (Cisco employees are smart, dynamic individuals so they surely must know other people who are just as talented). The team knew it needed to add some life to the program and make it compelling enough for employees to want to be involved. Clearly, money was not driving employees to participate. There had to be something else.
First, they launched the catchy-titled program “Meraki Matchmaking.” Simply, a recruiter schedules a 15-minute one-on-one session with an employee, where the two surf through the employee’s LinkedIn contacts and discuss who may be a great candidate for this open role or that open role…or perhaps a potential open role for the future. The recruiting team found this system to work especially well with the sales team since every sales team member essentially performs the same type of work and is a part of the same, unique sales culture, so it’s easy for these employees to pinpoint other people who could succeed and be a great fit.
Over time, recruiters realized that to be most successful with this program and get every last possible stellar candidate through the door – and therefore infuse the most quality they could into their talent pool – they needed to speak to everyone, and this meant approaching new hires right out of the gate. From here, a new segment was added to the company’s onboarding process, where new hires were informed of both the employee referral program and Meraki Matchmaking right away, setting the expectation that their participation is needed and appreciated. Overall, this established the precedent that “referrals” wasn’t just a one-time project of the sales recruiting team, but instead, it was a real company value that was indoctrinated into employees from day one. Further, the employee referral program empowered recruiters to take an active approach to not only meet their goals, but to inspire a recruiting culture throughout the sales team. Sales team members thrived off of this culture and excitedly participated in the Matchmaking sessions, feeling empowered by the process of seeking and selecting great talent to join their team. This sense of inclusion and recognition was the driver of participation – the driver the recruiting team had missed before.
But the sales recruiting team didn’t stop there. In addition to Meraki Matchmaking, they also set out to implement quarter-long promotions to make the program even more engaging.
In Q3 2015, a referrer could receive an additional bonus on top of the standard bonus if anyone was hired by X date, which encouraged hires to be made by a certain time, fostering alignment with business needs. With this, the number of employee referrals skyrocketed to over 200! Then, as a test, the team didn’t run a promotion for Q4, and as predicted – the number of employee referrals dropped to 25-30/month. This was all the justification they needed to know that honing in on employee engagement made a measurable difference.
Then in Q1 2016, the recruiting team introduced a new promotion – a wheel spin game – an idea they retrieved from the sales team itself, which awarded prizes to team members who won a large sales deal. If an employee referred a candidate and this person advanced to the onsite interview stage, the referrer won a prize, e.g. 5 free Soul Cycle classes, a Virgin America gift card – or anything else valued at $250. This amount made eyes widen with intrigue, but was low enough that it didn’t break the bank and the recruiting team could get buy-in from sales executives.
It’s important to point out that unlike at most companies, at Cisco Meraki, each department owns its own recruiting budget. Therefore, in seeing the potential of the referrals program to bring in high-caliber sales people to join the team, the sales department budgeted approximately $8,500 for it, knowing that this was a drop in the bucket compared with the value and impact that hiring great talent could make. And as a result, with the wheel spin game promotion, the recruiting team achieved 70 referrals/month, marking the best referral period in company history.
Why it works
Eryn attributes the success of Meraki Matchmaking and the quarterly promotions to the mere fact that these tactics are something new and fresh and caught employees off guard – in a good way, of course! Now, her team has a reason to bring up the referral program each week and keep the idea of referring top-of-mind for employees.
With Matchmaking, employees are made to feel important—like their input really, truly matters and that they’re an integral, active player in getting great people through the door. (There’s nothing more powerful than knowing you had a hand in someone else’s employment!). And with the wheel spin game, they stay engaged because of the elements of competition and anticipation – Who will win the next prize? (Will it be me?!) – and what will it be?
Overall, Eryn suggests that if you can find a way to break up the monotony of your employee referral program and make it less about money and more about what really drives employees to participate – an engaging experience where everyone feels valued, recognized and has fun – then employees will eagerly jump on board.
To learn all about creating a robust employee referral program, be sure to download our free eBook, How to Build a Strong Employee Referral Program.Get the eBook