Employee Referral Recruitment-Pros and Cons

recruiting employee referralsInterested in growing your employee referral recruitment but not sure how to get started? Today we’ll look at a few ways to encourage the process as well as a few ideas to keep it from getting out of hand (the “good old boy” system, people trying to circumvent the process, etc.).

What and Why

Employee referrals are a great way to save time and effort in your recruiting. According to the annual CareerXroads surveys on sources of hire, referrals are the #1 source for recruiting new employees. When it comes down to it, using referrals can shorten the recruiting process, fill positions with better-qualified candidates, and save money on advertising and other related costs.

In their survey on employee referral practices, it’s apparent that nearly every company provides some kind of referral bonus, so that needs to be considered if you’re setting up a plan.

Be Aware

As is almost always the case, some people will take something good and try to bend it to their own will. Employee referrals are no different in that regard. A few things I’ve run across (and how to combat them):

  • “I have a friend who applied for the job. When can he interview?” My first reaction is always the same. I explain the hiring process and how it is dependent on the hiring manager. If it’s the hiring manager who comes to me with this request, it gets a little more tricky. I might have to start from scratch and explain the hiring process to them, emphasizing the importance of an unbiased selection for OFCCP/EEO purposes. I hate having to rely on those types of things to get someone to behave, but sometimes there’s no alternative.
  • “I interviewed this guy a while back and now I want to make an offer. How much can we give him?” It might sound like a broken record, but I again repeat the hiring process and how it works. Sometimes people seem to forget that we can’t just hire someone without documentation and a lot of preparation (some of our new hire actions as a government contractor require 7 days to get completed).
  • “I don’t want to hire this guy, but he was referred by someone so I don’t know what to do.” This is an easier situation to handle. We typically interview all referrals, whether they are super, or only marginally, qualified. Once that’s completed I make sure to both call and mail a letter to the referral so they feel like even though they missed out on the job, they are still on good standing with us as a company.

Remember, even if someone is a referral, they still need to fit into your company culture or it shouldn’t happen. On a side note if you’re looking for another resource, Jobvite put out a nice, short eBook titled “Increase Employee Referrals in 5 Easy Steps” if you’d like to check that out (it’s free).

Anyone else have a referral program out there? I’d love to hear some of the details. How much of a bonus do you provide? How is your system managed?

16 thoughts on “Employee Referral Recruitment-Pros and Cons

  1. John Dennehy

    Love your site. I co-founded a company called Upstart Games and one of our first customers is a VC called Upstart Labs :)

    My company provides a social referral tool. We recently ran a referral campaign internally. There are only five people in the company. I offered an Apple TV as a reward for a hire.
    Between Saturday evening and Monday morning we had about 16 good candidates all sourced from social media.

    Twitter was by far the leading channel for sourcing the candidates.

  2. Lisa

    Referrals provide convenience to both employer and applicant. The company work for before only provides incentives if the one referred is hired.

  3. Pingback: The Skinny on Employee Referral Programs - Hireology

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