Introducing An Employee Referral Scheme



Posted: Sunday, September 12, 2010

by Sebastian Alexander
Simplified Recruitment

Employee referral programmes are great ways for employers to  engage staff while also reducing recruitment costs and increasing  staff retention. This article will talk about the steps for  introducing an employee referral scheme for your company.

Firstly why would you want to create an employee referral  program?

Employee referral schemes generally function best when they are  simple. At a very basic level an employee referral scheme allows  employers to set an amount they will pay an existing member of  staff who recommends a person for the role who is subsequently  offered the job. Employee referral schemes have no real down side  from the employers perspective so if you are not currently offering  this to your staff, you really should introduce it ASAP.

Since the priority of the referral system is to pay the  referrer, the company should decide on and allocate the intended  reward before starting the process. Some companies offer up to  £1000 but anything from £150 will motivate some employees to talk  about the job with their network. For the scheme to function best  you should set the reward to the highest amount which you feel  comfortable paying. The reward needs to be large enough to tempt  the employee to act immediately and also to proactively promote the  role.

In order for a successful referral scheme to function correctly,  it is vital to create a process by which staff are notified of  active vacancies and the referral fee is publicised. For the scheme  to be successful publicity is KEY, so if it is not already  happening it will be a good idea to start sending round an all  staff vacancy email which lists all the active vacancies and also  gives details about the rewards available.

Since the whole system is run on the credibility of the referred  applicants, companies should encourage the employees to conduct an  initial screening before they forward their recommendations. This  will save lots of wasted time. One good method for encouraging  referrals is to give priority to referred candidates. They should  be given attention and ideally the processing of these applicants  should be done first. Swift processing and regular feedback on the  referred applicant's status in the process will ensure that your  employees stay motivated to send more referrals in the future.

The referral process is completed when the referred applicant is  selected to the post. After the candidate accepts the role, the  referrer should be recognized and awarded the promised amount. This  will reinforce the credibility of the scheme as well as encourage  others to actively participate. Should a referred candidate accept  the job, the fact that the new starter joined through the referral  process should be publicised within the company.

A good referral system should have these characteristics;

A good referral program will have many benefits, both in cost  and the time savings and also since the new employee will have come  via an existing social connection it is likely that they will fit  in well; hence less time and money spent for orientation and  training.   

There are some potential downsides to consider. Minority  dominance can be a main problem as certain employees will only  recommend people from the same group. For example, young employees  will in turn recommend someone from their own age. Also most men  will only recommend other men….etc. 

That said, provided your employee referral scheme is a component  of a larger recruitment strategy which also includes job board  advertising, social media, etc, it will add a lot of value to most  organisations.  For a simple way to manage recruitment from  these other online sources you may want to take a look at www.simplifiedrecruitment.com. 

Read the original article: Introducing an employee referral scheme
           
Article provided by Simplified Recruitment, a free multiple job board posting portal that provides free job postings to job boards in the UK 
Sebastian Alexander is a HR Consultant at Simplified Recruitment, a multiple job posting website that allows free posting to its partner job boards network   

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