Great employees are the foundation of a successful business, but finding them can be challenging. Since word-of-mouth is an effective recruiting tool, it makes sense to use existing staff to help you locate the talent you seek. An employee referral program might just do the trick.
Referrals benefit all parties
People who already work for you will tend to refer people with work ethics similar to their own. If you have high-quality employees, you will likely receive referrals of the same calibre, leading to an efficient selection process. You'll save yourself time and money by using fewer recruitment sources and wading through fewer résumés that just don't fit the bill. And by hiring people who already get along, you'll have a head start on building good team chemistry.
An employee referral program (ERP) is great for your staff too. They will value the rewards they can earn, but more importantly, they'll feel engaged by a company that encourages their input and recognizes their contribution. Because they'll have a vested interest in the applicant's ultimate success, employees will also make an extra effort to recommend only the most promising candidates for a position.
Just by deciding whether or not to mention a job candidate, your employee will have done the initial applicant screening, saving you time and money. And if referred applicants have already discussed the job with an insider, by the time they apply they'll have realistic expectations and a genuine interest in pursuing the job.
Candidates who are hired through referrals tend to stay with the company longer than other employees; one study found that the retention rate for referrals is 25 per cent better than for other kinds of hires.
An ERP works on the simple premise that if an employee's referral leads to a successful hire, you reward that staff member with cash bonuses, gift certificates, extra vacation days or other perks. Gifts don't have to be elaborate; staff will respond to simple incentives.
You will pay less in a referral bonus than you would for a series of classified ads or for the assistance of a recruiting firm. But beyond a comparison of direct costs, employee referral programs simply yield better results; referred candidates are well informed about job requirements, performance expectations and company culture. These programs can also result in stronger team environments, because a sense of belonging and connection is created well before the working relationship. That sense of loyalty cannot be trained. It is more readily found in satisfied employees who understand and respect both their company and its management and thus refer potential candidates to job openings at their place of work.
For tips on implementing an employee referral program, read How to Implement an Employee Referral Program.
The above includes material supplied by Jacques Gaumond. © Copyright Canadian HR Reporter, July 17, 2006, excerpts by permission of Carswell, Toronto, Ontario, 1-800-387-5164. Website: www.hrreporter.com
