Making the most of your Employee Referral Scheme
Employees are the foundation of any successful business, but finding them in the current economic climate is tough. With ‘word-of-mouth’ still being one of the most effective ways to recruit, it makes sense to motivate your existing employees to help you find the talent you need to grow.
If you don’t already have one, an employee referral scheme might be just what you need.
The principal is quite simple: existing employees recommend friends, ex-colleagues or associates for an open job within the business. If the person they bring to your attention is successful and joins your organisation, the employee who recommended them is rewarded (See rewards section below).
What are the main benefits of having a referral scheme?
Well, first of all, there is the cost element. More and more companies are having to use specialist recruitment providers to help them fill their open jobs in Cambridge. Although figures vary, the average fee for using such a recruitment specialist can be in the region of £7,500. A lot of money for any growing business! Thus, even a referral scheme which offers a £3,500 bonus will save you money.
Secondly, employees will tend to recommend people who have similar work ethics to their own. Thus, assuming you have already hired very ‘high-quality’ employees into your team, you will likely receive referrals of the same caliber. And by employing people who already know each other and, hopefully, have each other’s respect, you’ll be one step ahead when it comes to team building and communication.
Finally, an employee referral scheme is likely to give you access to applicants who would otherwise be ‘passive’ and out of your reach. While recruiting ‘active’ candidates is often the quickest and easiest way to build your team, this will most likely only help you find half of the people you really need. Being able to reach out to talented people who are not ‘actively’ seeking a job, but who might happily consider a new opportunity, if presented to them by a friend or ex-colleague is invaluable.
As with any ‘recruitment tool,’ this will not solve all your recruitment headaches and should be used alongside a much broader talent acquisition strategy.
How to get the most out of your employee referral scheme:
- Make your scheme easy to use and understand: too many complicated steps and people won’t participate.
- Actively promote the program and make sure everyone in the company knows about the policy (especially new employee’s, who may well know ex-colleagues who are also keen to move on).
- Decide what incentives you will use and make sure they are ‘motivating’ enough to gain staff participation.
- While any bonus should not be paid out until after a new employee’s probation period has finished, ensure that it is paid as soon as possible, after this date. The quicker they get the moment, the more likely they are to think about who else they could talk to!
Things you need to consider
While this all sounds great and is a ‘no brainer’ when it comes to talent acquisition planning, there are still some things you need to be aware of.
For example, members of your existing team may be reluctant to make a referral as any ‘duds’ might reflect poorly on them. There is also the issue of what happens if a friend they recommend is not successful in being hired. #awkward
The simple solution to this lies in making it very clear to employees that they’re not responsible for the hiring of the referred person. It’s merely a ‘suggestion’ or an ‘introduction’ and the companies standard hiring process will still apply no matter how well you know them.
Rewards on offer
There is no right or wrong when it comes to how you reward your staff for a successful employee referral but here a few examples:
- Cash – Probably the most obvious and common reward. No two companies will place the same value on an employee referral scheme but when thinking about how much to offer, always consider what you would have to pay for recruitment provider to find them for you or, even worse, not finding them at all and the impact this will have on your business.
- Vouchers or similar – Some companies find the straight cash option about too ‘mercenary’ so maybe you can offer the bonus amount in local shopping vouchers or, even better, vouchers of the staff members choice (within reason!).
- Extra holiday – A bit different but not everyone is motivated by money. So maybe some extra days added to their annual leave entitlement?
- Days out/events – Again, not a standard option but I have known companies to hold monthly or quarterly events where staff who have ‘qualified’ through one incentive scheme or another are included in a company paid excursion. Go-karting, punting, cocktail making!