Have you ever felt like you simply cannot find enough of the people you need to drive your business? The growing skills gap is a real thing, and it illuminates the marketplace’s need for niche skilled employees.
A shortage of experienced individuals has caused companies to go to extreme lengths to attract skilled workers. One such method is the implementation of an employee referral program.
What is an employee referral program, do you need one, and how can you get one started? We cover the answers to your questions and more in this guide to employee referral programs.
An employee referral program is defined as a recruitment method in which current employees are encouraged (and even rewarded) to introduce suitable candidates from among the people they know. Ultimately, employee referral programs aim to generate quality candidates for internal job openings.
The goal of a referral program is to get your current employees to reach out to their friends, family, and colleagues in your industry and tell them about the excellent opportunities at your company.
When a candidate search is particularly challenging, you may need to reach out to passive candidates. These are individuals who aren’t currently looking for a new job because they’re employed elsewhere, and possibly quite happily so.
Approaching these individuals can be tricky for hiring managers, but friends and family often have a lot more success. Passive candidates are often more receptive to referrals from friends than from management at another company. When an employee reaches out to someone they know, they can vouch for your workplace culture in a way that you, as the hiring manager, never could.
As an added bonus, passive candidates are higher caliber candidates more often than not.
Successful placement of a referred candidate can be a substantial morale booster for an employee. In the first place, the employee will receive whatever incentive you've prepared for them through the referral program. Secondly, morale goes up when teams work well together, and one great way to guarantee that is to give your workers ownership in the hiring process.
Current employees are only going to refer team players. You’re not going to get employees reaching out to their old rivals or people they don’t enjoy working with.
Successful employee referral programs can have a positive financial impact if it replaces alternative recruitment methods that can sometimes be costly. This may seem counter-intuitive since many referral programs are set up with financial incentives for the referring employee. But positions tend to fill faster when there is a referral. That means you’re spending less on job posting, recruiting, and searching.
Did you know that the diversity of your team influences their creativity? That's just one of the many benefits of a diverse workforce. Referrals are ranked number one as the most productive source for diversity hires, well ahead of major job boards, company affinity groups, and diversity career fairs.
Referral hires have greater job satisfaction and stay longer at companies; 46% stay over one year, 45% over two years and 47% over three years. It goes without saying that increased employee retention is a cost savings for any company.
Overall the advantages of implementing an employee referral program far outweigh the disadvantages, especially if you plan your program carefully.
If your company already has a program in place, make sure to give it the attention it deserves. If your company decides to start an employee referral program down the road, make sure to do your due diligence before implementing.
Are you considering developing a referral program at your company? Here is what you need to know to get started.
Step 1: Decide what incentive you will use to get employees to make a referral. (Get some ideas in the next section!)
Step 2: Find out if your current management software will accommodate a referral program or if you need to implement new software.
Step 3: Teach your employees what you are looking for in job candidates and how the referral program will work.
Step 4: Respond quickly to referrals as they come in.
Step 5: Regularly revisit your referral program to evaluate it, improve it, and respond to any problems.
On the one hand, the opportunity to work with someone you really enjoy is a strong incentive on its own. But on the other hand, if that’s the only incentive you provide to your employees, you likely won’t get a ton of buy-in.
There are a few methods for incentivizing participation in these programs. Depending on the interests and priorities of your employees, you can find the incentive combination that works best for your company.
Of course, you can get creative with your incentives, too! Perhaps you want to reward your best referrer with an expenses-paid weekend trip or a great reserved parking spot. You’ll need to figure out the best incentive for your employees, and this may take some trial-and-error.
Associate referral programs are just one recruiting trend that hiring managers need to be aware of in 2019. What else is new? Find out in our free offer, Recruiting in 2019. We are happy to provide you with this informative guide to what is happening in the recruiting world so that you can apply our expertise to your recruitment processes!
Select One is also happy to talk with you about your recruiting goals and frustrations so that we can help you figure out how to reach those goals and overcome those frustrations. Contact us today to learn how we can help! We look forward to hearing from you.
Editor's Note: This post originally appeared on the SelectOne Blog in February of 2019. It has since been updated to include more information.