Hiring via Employee Referral Programs? Do Your Homework

You’ve spent a lot of time pouring over the resumes for a critical job opening at your company. Some fit well, others are the proverbial square-peg-in-a-round-hole applicant.

Time to ramp up the recruiting process.

Approval comes from above to initiate a spiff to company employees for referring apt candidates.

Granted, relying on employee referrals is a great starting point: like-minded people can reduce the unknown factors of the new hire immensely.

However, an article in the Canadian HR Reporter, Problems with Employee Referrals, puts forward a few pluses-and-minuses in “using the workforce” to search for a candidate.

THE GOOD …

… existing employees are unlikely to recommend someone they wouldn’t personally vouch for.

… candidates who aren’t necessarily applying to every online job posting available.

Nabbing that perfect hire reflects well on your employees. For sure, an ambassador affect kicks in as employees tout your organization as top-notch to work for.

THE BAD …

… organizations…can become “inbred” with employees who are too much alike.

… Some people feel employee referral programs are more helpful to employees’ friends and relatives than the organization.

SOLUTIONS …

Set a policy regarding the referral bonuses that says the new hire must stay put for a given period of time before payouts are made.

Also, it only makes sense to give some feedback to your employees if some of their referrals aren’t meeting your requirements.

Oh, and in keeping with full transparency, make sure you tell a referral that your employees are being paid a bonus for rounding up candidates.

In the end, it’s probably best not to fire up an employee-referral system as your only recruitment method. On that note, be sure to check out our web-based recruiting software; it’s by over 2900 companies in more than 60 countries.