Dismal recruitment numbers got you down? It can be tough to recruit quality candidates in a job market that combines historically low unemployment rates and mad skill shortages. By the time a job seeker is located that seems to have the right factors, a competitor swoops them up before you have a chance to make a job offer. There are endless strategies out there for how to turn the tide in the war for talent. Many focus on new ideas and new technology, all of which are good topics to be aware off, but one strategy you might also consider has stood the test of time. When it comes to finding great candidates, you might want to dust off your approach to employee referrals.
What are employee referrals?
The key benefits of an employee referral program
There are other benefits beyond merely finding the best talent as well. When a current employee refers a colleague to the company, he does so at his own risk of looking bad if the employee does not perform well. This means there is already a high level of trust in the abilities of the candidate. For a recruiter, this is a winning proposition because it not only helps improve their recruitment process, it also reduces the time needed to
Retention and productivity of these
Creating an effective employee referral program
Getting employees to introduce their colleagues to your company starts with developing an easy-to-navigate employee referral process, complete with incentives and a company culture that supports this. Setting up an internal referral program can be as simple as asking all newly hired employees if they know someone who would be a good fit for the company. This is what property insurance company PURE does to successfully recruit around 40 to 60 percent of its new associates using this direct approach. Then they can be shown how to complete a quick referral form and submit it to the recruitment team. A Google form works well, or a quick email to a dedicated employee referral address. Remember to keep employees informed about the progress and if their friend has been hired. And remember, if you’re giving a referral bonus, pay it out promptly.
In order to encourage employees to participate in the employee referral program, be sure to mention that the company offers a generous bonus incentive for them if a referral accepts the job and once they hit 90 days of employment. This could be around 5 percent of the referred employee’s starting annual salary. Or you could offer unique perks like InMobi, the global mobile advertising and discovery platform that offered employees who made successful referrals the choice of either a new Vespa bike or a trip to Bali. Regularly remind all employees about the program and how it works by encouraging managers to speak up during staff meetings. Ask employees to share how they were successful in getting a colleague
Things to watch out for in employee referral programs
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Employee engagement levels can be affected by referrals too. The Payscale study revealed that when people received a referral from a family member or close friend, they were more engaged than those who were not referred. However, it seems some also ended up having lower levels of overall job satisfaction with the employer and not so great relationships with management.
Consider this too: if an employee who has referred his or her friends to the organization decides to take another job with a competitor for better pay or work perks, you bet they will let their friends and colleagues know — which means an entire team could make an exodus from your organization if there’s a space for them to go.
So what’s the bottom line? While there are potential issues to be aware of with referral programs, they still offer a great and largely untapped talent pool for many companies. Treat these employees well, give them the same opportunities as others to grow and be promoted within the organization, and keep them interested by providing a great compensation package and corporate benefits that resonate with them. Be mindful of what the competition is offering, and stay one step ahead. Make your referral program simple, fun, and rewarding to see the best results.