The Sky’s the Limit: Inside Southwest’s Employee Referral Program

Employee referral programs are nothing new. But here’s what is: automated HR tech that seamlessly skyrockets the number of quality referrals made while providing a fabulous experience for candidates, employees, recruiters, and hiring managers — all at the same time.

Southwest Airlines recently shared how they’re driving a 700% increase in employee referrals — from 125 to 1,000 per week — with the same solution that saves its TA team countless hours sourcing, hiring, and retaining talent. How’s it work?

Get the full details from Southwest’s Kelby Tansey, Team Lead, Recruitment Marketing, and Tyler Hagood, Team Leader, Sourcing and SWA Staffers in the 12-minute video below, or read on for the highlights!

Why Referrals Matter More Now

As the talent shortage continues, companies are reexamining ways to tap into high-quality candidate pools. Why prioritize referrals? Data referenced on LinkedIn shows that 45% of employees sourced from referrals stay for more than 4 years, while 25% sourced through job boards stay only 2 years.

The team at Southwest knew that referrals were already a rich source of high-quality job candidates — but only if employees actually make them. Already armed with many of Phenom’s intelligent Employee Experience and internal mobility capabilities for the past few years, they decided to incentivize and optimize employee referrals using the platform.

7 Steps to Success

Here are the steps Tansey and Hagood took to get their amazing referral results:

Designed a compelling rewards program
Automated internal promotions
Encouraged employee profile set up
Leveraged CRM to streamline communication
Examined referral nurture strategy
Hosted referral info sessions
Conducted direct outreach

1. Designed a compelling rewards program. Southwest created a rewards program aligned with the company’s overall employee recognition strategy. Referring employees are awarded points that increase if the lead is hired and then again after the referral’s 6-month anniversary. Points can be cashed in for some pretty tempting swag — including a coveted “buddy pass,” which allows employees to choose a companion to fly with them free of charge.

2. Automated internal promotions. To spread the word, Tansey leveraged the platform’s automated campaigns functionality to launch far-reaching communications about the new referral incentives. “We were able to do several company-wide communication touchpoints and then lead [referring employees] back into the internal mobility platform to learn more or refer somebody,” she said, resulting in a seamless experience.

3. Encouraged employee profile set up. More employees making referrals means more employees using the platform. The team capitalized on the opportunity, prompting referrers logging in for the first time to set up an employee profile.

“We’re getting two things when employees go into [the platform] to refer someone — a more complete employee profile that enables us to let them know about potential career mobility opportunities at Southwest and a referred candidate,” Tansey said.

Resource — How Kuehne+Nagel is building a strong internal sourcing strategy with Phenom

4. Leveraged CRM to streamline communication. As referrals began climbing, Tansey’s team used their Phenom CRM to streamline communication with referred candidates as well as referring employees.

Referred candidates received automated emails and text messages about job openings, and were also invited to join their talent community by completing a candidate profile to learn more.
Referrers received automated emails, helping them track the referral process to see where the candidate stands in the process.

5. Examined referral nurture strategy. On Hagood’s end, the sourcing team had some important goals to focus on:

Delivering a great experience
Converting more referrals into hires
Balancing hospitality with the administrative demands of scaling the program

“We [previously] found ourselves delivering static information over and over again, and that was something we noticed early on and wanted to address,” Hagood said. “How can we … give all this valuable information to the referral community, but also have valuable, meaningful conversations with them whenever we do connect with them on a one-to-one basis?”

6. Hosted referral info sessions. Hagood found the solution with online “referral info sessions”, which enabled the team to reach high numbers of candidates at one time while still maintaining a personal feel.

Using Phenom Events, they hosted several sessions each week during times convenient for working candidates (lunch hour and after typical workday hours). Recruiters covered practical topics, such as interviewing tips and culture at Southwest, with live chat and FAQs available too.

“Giving [referrals] …valuable information they’re seeking and getting to them quickly so they feel welcomed, cared for, and appreciated — that is in our DNA at Southwest Airlines,” he said. “Hospitality and candidate experience is very important to us.”

7. Conducted direct outreach. Through all the ups and downs of the labor market, Hagood’s team has been able to stay ahead of hiring demands by proactively reaching out to referred candidates when they identify a hard-to-find role.

With direct calling campaigns, recruiters can proactively contact referral candidates who would be a good fit for an upcoming position. “When we know a position is going to post, we are calling into that market weeks ahead of time, letting the referrals know,” Hagood explained.

Examining Referral Results

In addition to soaring numbers of referrals, the team is watching conversion rates climb as well. “We’re seeing about 1,000 [employee] referrals a week with the new incentivized program, which is amazing,” Hagood reported. And “at least 50 percent of referrals have given us full profiles, where we can directly pipeline them … and turn them into applicants.”

In any kind of hiring environment, a 700% increase in referrals is something to celebrate — in this kind of environment, it's something to revere.