One of my best friends is moving away and I am not very happy about it. Especially since I know that only a month ago she had no intention of leaving her job or her home here in San Francisco. What happened? A mutual friend of ours mentioned a job at his company that sounded perfect for her. And so, a few phone calls and meetings later, she's headed back across the country to New York to start anew. Think about it. How many times have you heard "I wasn't looking for a job but then I heard about this great opportunity?" It happens all the time. And smart companies take advantage of those conversations as the most effective recruiting tool available to them. Employee Referrals.
Employees are a company's best asset-and best recruiters. Candidates are more likely to believe what a friend or trusted colleague tells them over most other sources. And when it comes to reaching passive candidates, referrals are a great resource. People who aren't even looking for a job, or don't want to leave their current employer, would do so upon hearing about the right kind of opportunity from a trusted source.
So even in today's economy with high numbers of unemployed candidates looking for work, the candidates you want may not necessarily be among them. Especially if you're recruiting for hard-to-fill or specialist positions, the chances of your target candidates actively looking right now is slim. How do you reach those quality candidates? Those illustrious passive job seekers? Through their connections of course!
Consider this: as a consequence of today's economic climate, a lot of people are actually unhappy in their current jobs, but they wouldn't risk making a change until the market turns completely. Research has shown that employees are dissatisfied and ready to move. A recent survey by the Corporate Leadership Council indicates that 42 percent of employees don't believe their employer looks out for their best interests, 50 percent of them don't apply the highest levels of effort on the job, and the intent to stay among high-potential employees has dropped 21 percent. This means that a lot of people, although not actively looking for a job, are ripe for a new opportunity. Companies need to take advantage of these sentiments by boosting their Employee Referral Program (ERP).
In a time when employee engagement and morale is running low in quite a few organizations, an entertaining and motivating ERP could be a way to re-engage your own employees, remind them of your employee value proposition, and reward them for referrals. ERPs are known as a low-cost-per-hire source and the program needn't be expensive to motivate. Sure a cash bonus is nice, but games, recognition, and other communication and reward tactics can be just as motivating. For example, develop an ERP where rewards are given based on a lottery system. Every referral entry earns one lottery ticket and every referral hire earns 10 bonus tickets. There are monthly, quarterly, and annual drawings for prizes. Plus the winner gets their photo on the company website and in the internal newsletter. The individual prizes aren't very big, but the spirit of competition and notoriety of winning keep everyone motivated and raise awareness of the program. Plus, it's a lot of fun!
Traditionally, job seekers (78 percent actually) have always found personal contacts and networking as the most effective tactic for seeking employment (according to a SHRM survey). And in today's connected world, keeping in contact is even easier. Thanks to social networking sites like LinkedIn and Facebook, people can reach out to their networks easily, quickly, and (good for you) cost effectively. Companies that leverage the power of these new mediums through their ERP will see the results.
But there are many benefits to an ERP besides being a low cost per hire. It's a great way to build a pipeline and generate a steady flow of qualified candidates. Referred candidates are likely to be briefed ahead of time on the company, culture, and role, thus improving the selection process as well as easing on-boarding and improving retention. And a successfully communicated program can lead to enhanced employee engagement and morale. It's a win-win all around!
And don't ever underestimate the power of what is being said. According to Finding Keepers: The Monster Guide to Hiring and Holding the World's Best Employees, a whopping 81 percent of employers think employee opinions influence candidates, but conversely 30 percent of employees say their company doesn't promote the benefits of working there enough.
In order to ensure your ERP is a success, it must be well managed AND well communicated. The death of any program is mismanagement. Companies can easily take advantage of today's technologies to assist with this-some Applicant Tracking Systems offer this functionality. Equally important is keeping the program top of mind for employees, so they understand what the process is and who to refer.
So if you don't have an ERP right now, or you've let it slide over the past few years, now's the time to think about how to successfully implement an ERP at your company. The business case is strong, the timing is perfect, and your employees are ready.
Just please stop recruiting my friends away!