Recruiting: Employee Referrals

August 21, 2015  |   Posted by :   |   YPHR Blog

Where recruiters 20 years ago had to rely on newspapers ads, word of mouth and other traditional sourcing techniques, today’s recruiters have access to more resources than ever.   Recruiters use their vast networks, LinkedIn, job-specific career boards, online sourcing, advertising and more to target the best and brightest for their clients.  Still, any experienced recruiter will tell you that the best and most successful candidates can come from employee referrals.

Your employees know more about your company’s culture, pay scale and positions than anyone.  They are also more likely to have friends and colleagues who might be ready to make a change but might not actively searching in the job market where recruiters can find them.  So how do you leverage your employees to find great candidates?

Cash rewards are an effective and popular method for motivating employees to participate in referral programs.  The amount should be fair and buzz-worthy, according to your industry, company size and culture. You mayReferral want to offer bigger rewards for harder-to-fill roles. Also consider incentivizing referral quality and retention by giving a second award after a newly hired referral has worked 90 or 180 days.

If cash incentives are not in the budget, you can take the employee to lunch with the new hire who referred them, offer an additional day of paid time off when a recommendation is hired, recognize the referrer with a thank you note, announcement or company email.

Consider whether you need referrals for all openings at your company, or just salaried positions or those positions that are typically more difficult to fill like 3rd shift positions.

Put  your program design in writing.  This should cover what the incentives are, who is eligible (usually anyone in recruiting is ineligible), how employees can make a referral, how hiring decisions will be made shared with employees who make recommendations, and time frame for the bonus reward.  Additionally, be sure to have a method for notifying both the referred employee and the employee themselves if their candidate does not get the position.

Ensure you have a way to track referrals.  If you have an applicant tracking system, you can likely take advantage of its referral features. If not, some creativity is required.   Smaller employers may use a spreadsheet or event set up an email account specifically for referrals.  A central location is key to help you assess the success of the program and avoid confusion if referral are being made to multiple people.

Do not forget about it.  Once you have the program in place, be sure to remind your employees about it periodically.  Let you employees know what positions are open and details about what you think the successful candidate looks like.  The more you involve your employees in the process, the more engaged they will become.

An employee referral program may very well be the shortest most cost-effective path to better hires. For more suggestions on how to build a solid recruiting infrastructure, or for additional help filling your hard-to-fill jobs, contact YPHR today!


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