Introducing an employee referral scheme
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
- Attract new candidates.
- Involve employees in the growth of the company.
- Motivate staff.
- Reduce costs
- Decreased hiring time
- Better quality candidates
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
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;
- Public recognition of successful referrals.
- Prompt bonus rewards.
- Regular promotional incentives.
- Converting the program from a passive to a proactive tool.
- Creative devices to enhance employee participation.
- Good communications feedback about referrals.
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
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.