Boosting recruiting and retention through employee referral programs
Posted by Robin Erickson on October 21, 2014
Tapping current employees to source new candidates is a viable recruiting strategy for many reasons: high return on investment (Bersin research found that 9 percent of the overall spend for sourcing went to employee referrals, delivering 16 percent of new hires1 ); good cultural fit (employees tend to refer candidates with similar skills and attributes); access to specialized or hard-to-find skills (people typically network with others in similar roles); and long-term effectiveness (one study showed a 42 percent retention rate after three years for employees hired through employee referral programs vs.32 percent for employees hired through job boards and 14 percent for career site hires2).
These are compelling reasons for the organization to get on board with a referral program. But what are the compelling reasons for employees? Certainly, financial and other incentives are important motivators. But your referral program stands a better chance of success if your employees want to participate for more than awards. How you brand the effort can keep it from becoming just another business process, and making it fun and compelling will drive engagement and usage.
Get the word out: Inform, educate, excite
If making a referral is a difficult process, employees will lose interest and not want to participate. So first of all, don’t make the process difficult. Second, if employees don’t feel their referrals are being considered or don’t receive status updates, they will stop referring their friends. So communicate proactively with employees who have made referrals—it’s okay to acknowledge that the potential candidate is not qualified for the position.
Keep the momentum going
Deliver on the promise
Whether incentives are cash or some other type of reward, establish award payment timing before beginning the program so employees know what to expect. You can consider making payment after a certain number of months have passed, 2 to 6 months, for example, or splitting payments, such as 50 percent at time of offer acceptance and 50 percent after a certain number of months.
It’s worth the effort
|Robin Erickson, Ph.D., is the Vice President for Talent Acquisition Research at Bersin by Deloitte, Deloitte Consulting LLP. She writes about various topics in talent acquisition, including integrating with talent management, improving quality of hire for critical jobs, leveraging social recruiting to build talent pools, and building a global recruiting function.
Follow Robin on Twitter @RAEricksonPhD and visit her blog, Talent Magnetism.
1For more information, The Talent Acquisition Factbook® 2011: Benchmarks and Trends in Spending, Staffing and Key Recruiting Metrics, Bersin & Associates / Karen O’Leonard, November 2011. Available to research members at www.bersin.com/library or for purchase at www.bersin.com/tafactbook.
2 Source: Katherine Jones, Ph.D., & Kim Lamoureux, Creating an Employee Referral Program: Guideline for Getting Started, Bersin by Deloitte, December 2013.
3The Talent Acquisition Factbook® 2011.
As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.