Recruitment isn’t easy; it can also be expensive in a tight employment market. Anything companies can do to get access to new pools of talent is welcome, which is why more HR departments are turning to employee referral programmes for their hiring needs. This is a system whereby existing employees are encouraged to recommend friends, family and other connections to work for the organisation.
There are a lot of benefits to be gained for the business. As well as creating a new pool of candidates and lowering the hiring costs for a job vacancy, it can greatly reduce the time it takes to hire, as screening steps can be removed. Furthermore, these schemes can demonstrate to existing employees that their opinion is valued, so can provide a welcome boost to staff morale. Some studies have even found that referred workers stay longer.
…and the cons
There can be downsides to employee referral programmes, but these tend to be a result of failures in the way that the schemes are designed and implemented. For example, a referral may be treated differently from another work colleague because they are already close to someone on the team. Or, the nature of their relationship between two close individuals changes detrimentally as a result of one having to manage the other.
Problems can also arise if you have too many referrals from the same person. If these people are from the same circle of friends, they tend to be likeminded, resulting in a lack of diversity, personality and ideas within teams. If this happens, it might be an idea to limit the number of referrals existing employees can make.
Getting it right
The success of any internal employee referral programme will be dependent on a number of factors. Firstly, you need to create a working environment where people actually enjoy working. If you don’t have that, you simply won’t get buy-in to the referral scheme, which won’t mean too many referrals. If someone is constantly complaining about their workplace, that’s hardly going to act as a great recommendation for the business.
Secondly, you have to create rewards for successful referrals that incentivise existing employees to get involved. While cash is the most obvious choice, you might have to wait several months to ensure a referral is a good fit for the role, and too much of a delay between the referral appointment and the reward could mean that staff are reluctant to get involved. One way to get around this is to offer phased incentives based on how long the referral stays, or offer a non-monetary award, such as extra holiday leave when the referral has been recruited, and a cash reward once they’ve been at the company for six months.
Finally, you have to make it easy for employees to participate and put clear instructions in place on how the scheme works. Always provide feedback and updates on referrals throughout the organisation regularly to encourage new referrals.
Employee referrals can be a reliable, cost-effective way to find new talent fast, but to get the most from these schemes, you need to put structures in place that ensure they work for the unique needs of the business, as well as those that participate. If a referral programme doesn’t attract enough suitable candidates for a job vacancy, you can always revert to wider talent pools through job boards such as Zoek, currently offering free unlimited job advertising right up until 2020!