Companies are always looking for new ways to grow their ranks with the best and freshest new talent. In fact, it's not uncommon for HR professionals and hiring managers to shift some of the legwork of recruiting on to the other employees by introducing employee referral programs.
Referrals are popular because they benefit everyone. Companies get to grow, while staff members benefit from monetary incentives that can also boost morale and engagement. They're also a great way to get everyone thinking about how to best benefit the business in the long term. But there's more to implementing a referral program than you may think. Here are a few things to keep in mind.
Know the value of referrals
Every small-business owner knows what a mistake it is to underestimate the importance and efficacy of word of mouth. This holds true for your recruiting efforts as well. While your hiring managers do their best to cast a wide net, your employees are the ones who are in the trenches, so to speak, and they often have valuable connections.
"Talent acquisition leaders consistently say that referrals are the most valuable external candidates their teams get," Mary Grace Hennessy, chief product officer for SmashFly technologies told the Society for Human Resource Management.
SmashFly conducted a survey of hiring managers and found that 77 percent of respondents work for companies that have employee referral programs. What's more, 32 percent of new hires reportedly came from these programs. Employee referral programs are valued by the HR community, and managers and entrepreneurs should take note.
How can you make the most of it?
Referral programs offer you a boost to your recruiting efforts – you just need to know how to get the most from it. The most important thing you should do is to ensure that your staff members are aware of the fact that the program exists in the first place. This may mean more than just emailing your office listserv – don't be afraid to incentivize. Many companies offer cash bonuses to employees who successfully refer a new hire.
As with many other parts of business, your staff members will appreciate feedback. Follow up with employees on any prospective hires they send your way. This lets them know that you're taking their suggestions into consideration, and can make them feel like an integral part of the process too.
If small-business owners are struggling with implementing an effective employee referral program, consider working with a PEO company for expert HR solutions.