The Importance Of Employee Referrals In Sourcing Candidates

Employee referral programs have been used for years as a method of sourcing candidates. In fact, most of the big players – IBM, PricewaterhouseCoopers, Princeton, Kaiser Permanente, Aramark – as well as a lot of small and medium-sized companies have a program in place. It’s a matter of knowing how to make it effective. 

Make Your Company Somewhere People Want to Work

Before you even begin to think about creating an employee referral program, you first need to make sure your company is a place where people want to work.

According to a recent article, having a good work-life balance and knowing that your job is secure are the biggest factors for those under 30 when choosing an employer. However, these sound like good selling points for most  job seekers regardless of age.

Structure a Referral Program So it is Effective

Creating an employee referral program may seem simple enough. However, there are certain components that are essential to making your program successful:

  • Make sure it motivates. Developing an ineffective program that is haphazardly implemented and poorly tracked will demotivate employees. Additionally, consider carefully what the reward should be for a good referral. Too low and employees won’t participate. Too high and you’ll be inundated with referrals (not necessarily good ones).
  • Establish clear-cut guidelines. Make sure it is easy to understand, clearly explains the process, communicates all the details, and has a tracking system.
  • Communicate the program. After introducing a program, demonstrate your continued commitment and support by routinely discussing the program and sharing the results. 

You also may want to track how effective the program is versus other forms of sourcing candidates.

Good and Bad News about Referral Programs

Finally, one last thing to consider when using an employee referral program for sourcing candidates is that there are good and bad points to consider.

The good points include:

  • The quality of candidates is generally good because the referring person’s reputation is on the line.
  • It is easy to maintain and monitor.
  • Depending on the bonus structure, it isn’t expensive to run.

The most common negative is the potential lack of diversity and what some call “inbreeding of ideas.” When everyone you hire is from the same source, they tend to all look and think the same.

Ultimately, employee referral programs are a useful tool for sourcing candidates. Another useful tool that blends seamlessly into the sourcing and recruiting process is a database management system like the one we offer. Regardless of where you find your best candidates, we can help manage your staffing needs.

  • Image via Microsoft Office

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