Using employees to recommend job applicants is a tried-and-true approach to snagging good people. Here are some tips on how not to muck up your employee referral program.
First, some confirmation of why you need such an approach, courtesy of Referral Madness: How Employee Referral Programs Turn Good Employees Into Great Recruiters and Grow Your Bottom Line, from CareerBuilder.
- employee referrals are the No. 1 source of new hires
- 82% of employers said employee referrals generated the best return on their recruiting investment, and
- 88% of companies say referral programs produce their highest-quality candidates.
OK. So let’s agree: This approach works.
Traps to avoid
Like any other program, the success of a referral policy depends on how well it’s administered.
Here are some of the pitfalls CareerBuilder warns employers to avoid:
Don’t fall down on feedback. Employees need to know if they’ve made a referral that’s a bad match. That way, the employee can make better judgments in the future — and the company gets better candidates.
It’s also important to let both the referred candidate and the employee know where things stand throughout the process. Otherwise, employees start to feel like they’re submitting referrals into a black hole — so why bother?
Don’t exclude anybody. Some companies exclude HR people and others from their referral programs. Big mistake. Everybody should get the opportunity to participate. Yes, there will be restrictions, but involvement shouldn’t be limited to only certain departments or individuals. That’s a sure morale-killer.
Don’t pay too much money – or too little. Rewards will likely vary based on the position in question, but if bonus payments aren’t in line with employee expectations, good luck with making the program work. It’s a balancing act HR and the C-level folks have to work on together — aligning your cost per hire and employee bonus levels.
Don’t drag out reward payments. This is one of the biggest mistakes companies can make. Employees will likely stop referring people, but that’s not the worst of it — they’ll also start to lose faith in the company.
Don’t get complacent. Employers need to continually evaluate their programs to make sure they’re meeting the needs of all involved — employees, management, and those referred. Advances in technology, social media behavior, and changes in the company may all contribute to a need to adjust the program as things move forward.
