If your company does not already have a robust employee referral program, you may be missing the boat in terms of recruitment resources. Statistically, the best recruitment tools available in the business world today are already at your disposal in the form of your own employees. In studies of the employee recruitment process, a whopping 88 percent of employers name employee referrals from existing employees as their best and most cost-effective recruiting secret.
Here are a few reasons why:
- Employee referrals represent the highest application-to-hire conversion rate
- According to JobVite, a social media recruiting system, employees who are hired from employee referrals stay with the new company longer than others: 46 percent stay over a year, 47 percent stay over 3 years. Employee longevity, of course, is money in the pocket of the employer. No new recruitment costs, no learning curve, and better productivity.
- Employees referred by other employees have a higher rate of job satisfaction
- Employee referral-based employment takes place more quickly resulting is shorter down-time. Fifty-one percent say the process is less expensive.
- Because your rock-star employees are each likely to have 150 social media contacts, your recruitment outreach magically gets broader every time you engage your employees in the process. Think of it this way you have 20 employees each with 150 social media contacts, if each employee broadcasts your new job opening you have sent a credible job advertisement to 3,000 people for FREE.
You already know that your people are the company’s the best assets. It makes good sense to tap into the rich reservoir of talent to which these folks have immediate access. These talented individuals are people your employees knew in school or at a former job. They are likely to have similar work ethics, similar training and common goals. In these ways, they are already pre-qualified to fit into your company culture. That you don’t have to spend money advertising for these applicants, makes them even more attractive.
7 KEYS TO A GREAT EMPLOYEE REFERRAL PROGRAM:
1. Do set reasonable rules.
There are lots of well-written models for an effective employee referral program available online. A great beginning place is ERE.net which provides excellent information on the recruitment process.
2. Do talk it up.
Make the employee referral program an integral part of your company culture. By highlighting and emphasizing the fact that your superstars are bringing future superstars on board, your employees feel more valued and will continue to build your company’s employment brand.
3. Don’t allow the program to get stale.
Always remember to include praise for this employee referral program in your regular communication with employees (and those in your recruitment pipeline,) by way of emails, newsletters and on your website.
4. Do offer meaningful cash incentives.
Think about the fact that you’re not spending as much as your valuable time in the recruitment process. Evaluate the potential savings in light of the stats above. Something along the line of a $500.00 prize for a new hire, is not unreasonable.
5. Don’t forget to reward successful approximations.
You should also have a “consolation prize” in place for those whose referrals made it to a second or third interview but were not hired. New computer tablets or tickets to sports events would be great suggestions. Gift certificates for dinner out or gift cards are also great little recognition gifts for enthusiastic participants. A raffle for all those who referred people is a good way to do this as well.
6. Do provide feedback.
If an employee refers an unqualified applicant, give him the information he needs to better select the people he sends your way. Do it with a smile and a pat on the back for being a part of the program.
7. Don’t forget to set goals.
Remember to include quantifiable goals in your program. As an example, you want the program to provide 75 percent of your new hires for the year. Create a chart where it is visible so the employees see it every day and are reminded of the goal.
An employee referral system, when well done, can be the source of not just excellent employees, but also significant savings of time, money, and other resources. Perhaps the best saving of wear and tear on members of the human resources and management teams.