Under employee referral schemes, existing employees are encouraged to bring in new professionals, and they are suitably rewarded if the person they refer is recruited. As such, employee referral systems provide win-win situations for employees, too, as they not only earn cash incentives but also get a chance to share the workplace with friends or former colleagues.
Benefits of Employee Referral Schemes
- Referral programs save significant recruitment costs for the organization.
- Professionals recruited through referrals tend to stay longer with the organization as they are already acquainted with the situation within the organization.
- Referred recruits get more quickly absorbed, both culturally and socially.
- Referral programs shorten the recruiting cycle as compared to other methods of recruitment.
- Existing employees refer candidates only when they are themselves happy with their organization. Thus, referral schemes are also a good test of loyalty and satisfaction among existing employees.
Tips for a Successful Referral Program
- Suitable rewards and encouragement are a must to motivate existing employees to refer candidates. This also increases the momentum of referrals from employees.
- Market your referral programs adequately. Ensure that the scheme is known throughout the company. You may also set different rewards for recruitment done at different levels in the organization.
- Human resources professionals should ensure that the resumes of referred candidates are given priority so that follow-ups are not delayed.
- It is advisable to proactively inform employees regarding the status of their referred candidates and how they have been faring in the recruitment process.
- Make it easy for existing employees to refer candidates. A cumbersome procedure discourages employees from getting into the process.
- Circulate an updated list of vacancies regularly.
- More importantly, ensure that employees are paid their rewards in a timely manner and without the need for them to remind you.
Human resources professionals have been successfully recruiting good quality talent through employee referral programs, especially in sectors with shortages of prospects with adequate skills. While referral programs bring quick-turnover advantages and drastically reduce the cost of recruiting new talent, they should be used in combination with other recruitment methods to balance the quality of talent entering the organization.