Create an effective employee referral program

Date01 May 2005
Published date01 May 2005
Pages5-5
DOIhttps://doi.org/10.1108/14754390580000794
AuthorJamie Barber
5
Volume 4 Issue 4 May/June 2005
HOW TO…
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Practical advice for HR professionals
DEPARTMENTS AT A GLANCE
STRATEGIC COMMENTARY
,
e-HR
,
HOW TO…
,
PRACTITIONER PROFILE
METRICS
HR AT WORK
REWARDS
,
RESEARCH AND RESULTS
,
,
,
,
Create an effective employee
referral program
1
WRITE THE
RULEBOOK FROM
DAY ONE
5
MARKET AND ALIGN
WITH STRATEGIC
RECRUITMENT
4
THINK ABOUT
WHAT MAKES
REFERRERS TICK
3
WIDEN YOUR
HORIZONS
2
Referral schemes need clear
rules from the very
beginning. For example,what
happens if an employee
bypasses the process? Should
employees be able to split
bounties? Should there be a
formalized appeals
procedure?
Make it clear whether you
are paying a bonus for the
referral or the hire. From the
referrer’s perspective,once
the applicant starts work the
job is done and a bonus
should be awarded in its
entirety regardless of the on-
the-job performance of the
new hire. Should the referrer
be penalized if your
recruitment team has – after
the full interview process –
taken on the wrong person?
Is there any reason why your
referral scheme should only
be open to your current
employees? Although you
may want to vet any
vacancies received from
outside the boundaries of
your organization, you might
be surprised at the response
from suppliers, partners,
third-party contract staff and
retirees, especially for
vacancies in their particular
areas of expertise.
Additionally,you could even
consider opening up the
scheme to current applicants
as long as you are able to
reassure them that making
referrals will do no harm to
their own prospects.
A common misconception is
that referral schemes have to
be expensive because
bounties for successful
referrals must be financial
(and large). While it would be
foolish to underestimate the
lure of a cash reward, there
are other options if you think
creatively and try to
understand the motivations
of your workforce.
For example,sports
enthusiasts may be driven by
tickets to a high-profile
sporting event. Those with
substantial commitments
outside work might prefer the
option to claim extra paid
holiday.Be imaginative and
you may find referral scheme
bounties cheaper than you
think.
C
oncern over a lack of talented
applicants is forcing HR to re-assess
potential sources of new hires.
Referral schemes are increasingly being
highlighted as a shockingly under-used
initiative, particularly in the UK where
only one-third of companies currently
operate a scheme. Contrast this with the
US where between 25 and 60 percent of
all vacancies are filled via referrals.
The benefits of a robust referral
scheme are numerous. Setup costs can
be surprisingly low and referred
applicants will benefit from “insider
knowledge” of your organization,
leading to a greater likelihood of a
closer cultural fit. This ready-made
informal support network can be a
useful resource should the new recruit
encounter any teething problems.
However, beware of recruiting solely in
your own image as this is likely to stymie
efforts to promote fresh blood and new
ideas. You should try to run referral
schemes alongside existing diversity
initiatives so your recruitment strategy is
as inclusive as possible.
BUILD AN
AWARD-WINNING
PROCESS
Make the process of
submitting referrals as easy
and painless as possible, even
for remote workers.Bear in
mind that your recruitment
team will need to spend
considerably longer matching
referrals to specific vacancies
if you allow “generic”
applications.You may also
want to direct your referrals
through a “declaration”
phase where they authorize
you to process their details in
order to sidestep any data
protection issues. Keep track
of the referral process to get
some idea of ROI as well as
to make sure no two referrers
claim the same bounty.A
spreadsheet may be adequate
for small companies but
larger organizations may
need to look at a more
scalable solution.
A referral scheme should be
marketed in the same way as
any other product or service
you provide as an
organization. Although
specific vacancy needs will
vary over time, the general
initiative should be ongoing
and highly visible with
marketing being continuous
rather than a “one-off.”Also
consider offering different
rewards for different types
and levels of referral. Be sure
to keep your pool of referrers
aware of any updates.A
decent tracking system may
allow you to build in quite
complex eligibility rules
allowing you to tailor the
program to your exact
strategic needs.
Source: Jamie Barber,IntroNet
Jamie.Barber@IntroNet.com
© Melcrum Publishing Ltd. 2005 For more information visit www.melcrum.com or e-mail info@melcrum.com

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