Employee Referral Program Guidelines for Dealerships

While technician employment is expected to change little from 2021 to 2031, the Bureau of Labor Statistics projects that there will be an average of 73,000 new openings for automotive technicians per year. This is due in part to some members of the current workforce retiring or changing career paths. 

One of the best ways you can boost the pool of talent that your dealership has access to is through an employee referral program. On average, referred candidates are hired faster, stay longer, and are more engaged in the organization they’re hired with compared to traditional candidates. This tactic will allow you to fill your open roles with great talent faster than the old-fashioned methods. 

In fact, among Hireology customers, applicants referred by existing employees are four times as likely to become hires than applicants sourced via other channels — including job boards. This number is so high simply because folks in technician roles or sales positions typically trust their friends more when looking for a new job than they do third-party sites or even employers themselves.

What’s more, filling your open roles isn’t the only other benefit of a great referral program in the automotive industry — they’re useful to improving retention rates too! It can be especially hard to keep talent when these positions are in such high demand, meaning that people can get similar jobs at all kinds of dealerships and repair hops. However, if your employees know their coworkers and enjoy working with them, they’re much more likely to stick around longer.

The caveat? Most dealers know this. The primary reason these programs aren’t always successful is that dealers can’t get their people to actually participate in the program, leaving those dealerships unable to generate real ROI. So how can you build a program that actually motivates folks to participate? 

5 steps to build a successful employee referral program for your dealership

A great dealership referral program needs intention and strategy to work. You need to strategically think about how you build your program, how much you’ll pay out per position, how you can internally promote it, and more. Not only that, but all of these aspects need to be tailored to the needs of your unique employees.

  1. Define your employee referral program policy

The first step you need to take is to document your program’s guidelines. That includes everything from submission guidelines to any eligibility requirements. Things to consider include:

  • Do employees need to use certain channels to submit an official referral? 
  • Can an employee refer a friend in a passing conversation and that counts for the program?
  • Can managers participate in the program?
  • What about referring a former employee or a family member?

You want to clearly define every feature of the program so that your dealership team knows exactly how they can officially submit a referral, what the payout schedule is, who can participate, etc. You want to remove as much gray area as possible so your employees have less gray area to navigate.

  1. Decide on your referral reward amount

When creating your employee referral program, choosing the right referral reward amount is paramount to drive engagement and maximize your program’s ROI. Rewards that are too low will deter participation, while ones that are too high will be too costly in the long run.

In the automotive industry, the average reward payout is anywhere from $500 – $2,000, depending on the position being filled. For easier-to-fill roles (like salespeople) you can offer a reward on the lower end. For hard-to-fill roles (like technicians), you’ll want to aim for the higher end. You can pay these referral rewards out in installments, like half when the new hire starts and the other half after 90 days of employment.

  1. Promote your referral program

Your workers won’t be able to participate in your employee referral program if they don’t know about it. You need to clearly communicate the parameters of your program, your open roles, and the payout amounts through the channels your workers most often use. In the retail automotive world, this could mean relying heavily on physical signage in high-traffic areas like the break room or in the repair bay. Since the types of workers you’re recruiting for aren’t likely to be at a desk or on their phones often during the workday, you’ll need to find other ways of getting their attention. Alternatively, you could consider texting employees with promotional material for your employee referral program; you’re banking on them checking their messages either during break times or after work.

Also, remember that most people need to hear something multiple times before they can remember it. You’ll need to share messages about your program quite a few times, and in several different ways — even if it feels like you’re repeating yourself.

  1. Make submitting referrals easy

If you want as many people as possible to participate in your employee referral program, you’ll need to remove any potential obstacles in their way — and this includes a time-consuming referral submission process. If your workers are asked to download a specialized app, remember yet another password, or complete a form with dozens of fields, they are much more likely to give up. 

Instead, you should aim to make your submission process as easy as responding to a text or having an online chat. For example, with Hireology’s built-in referral technology, anyone who clicks the URL to submit a referral is routed to a chatbot where they simply respond with the name of the referral and contact information — that’s it! The chatbot is mobile friendly too, so it’s really easy to navigate on-the-go.

You should also consider making the process even easier by turning your submission URLs into QR codes. These codes will allow employees to avoid typing in URLs into their phones or waiting until they can get to the computer to submit a referral. All they’ll have to do is scan the code with their camera app, submit their referral’s information, and move on with their day. It doesn’t get much simpler than that!

  1. Track referral candidates and payout timing

Finally, and perhaps most importantly to your employees, it’s critical that you keep your word when it comes to your referral program. That actually means vetting the referral candidates you source through your program and paying the correct referral bonuses on time. Of course, it’s easy to forget to follow up on candidates and make your reward payments if you rely on spreadsheets or your email inbox to track your program. Instead, invest in tools like Hireology Referrals that allow you to track these candidates along with organic applicants and notify you when payments are due.

Referrals are a top source of talent for many businesses — dealerships included. However, referral programs don’t yield results without a carefully planned strategy and some effort. Take some time now to revitalize your dealership’s employee referral program to start building your referral pipeline today. Of course, all of this is much easier to accomplish when you have a centralized tool for sending referral campaigns, tracking candidates, remembering bonus payouts, and more like Hireology Referrals.

Want to see Hireology Referrals in action? Take a self-guided platform tour today!



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