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Generate Employee Referrals
You have a whole team of corporate headhunters at your disposal - your staff.
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By Jennifer Myers

You want to hire the best and brightest, but they’re already employed. How can you attract these passive job seekers to your business? An employee referral program could be just the trick. 

The pool of job seekers may be growing, but that doesn’t mean it’s easy to find skilled employees. That’s because the best and brightest are still working. Yet, there is a powerful way to reach those passive job seekers: by using the talent you already have.

Your current employees are a valuable and affordable source of leads to qualified job candidates. Besides knowing your company’s hiring needs, employees are likely to refer only highly skilled workers who will fit your company’s culture. (Recommending a dud just doesn’t serve their own best interests.)

“We always recommend that our clients use an employee referral program,” says Tim McConnell, senior HR strategist of McConnell HR Consulting Inc. in Ottawa. “It’s cheaper and you’ll get better results.”

But be forewarned: as with any HR initiative, the amount of time and effort you put into your employee referral program (ERP) will determine its success. Some best practices for successful ERP design and implementation are outlined below.

Formalize your program

Don’t try to run your ERP by the seat of your pants. Instead, formalize the process, suggests Lynn Brown, managing director of Brown Consulting Group, and HR consultancy in Toronto.

Give it a catchy name that your employees will remember. You may want to draft a shortlist of possibilities and then ask your staff to vote on their favourite. Then design a logo, posters and brochures that will help you promote the program.

You’ll also want to draft an ERP policy and include it in your company handbook or on your website. “Consider all of the ‘What ifs?’” says Brown, such as who is eligible to participate, the reward for successful referrals, when you’ll award it and how you’ll deal with potential conflicts, such as employees referring members of their families.

Make it easy for staff to refer prospective hires. Create an online process by which employees can quickly submit a name, contact information and a few lines on why they’re recommending the person.

Keep in mind the simpler your ERP is, the better, says Daphne Woolf, managing partner of Toronto-based The Collin Baer Group. “If it’s too complex, people just won’t participate.”

Determine the reward

Your ERP won’t fly if you don’t get the buy-in of staff, so make sure the reward is worth their while.

Cash is the most common bonus for a successful referral and is typically paid out once the new hire has proven themselves, usually after a three-month probationary period. But other valuable incentives can include an extra week’s vacation, gift cards, a weekend getaway, dinner out or tickets to sporting events
or the theatre.

If you do offer a cash bonus, how much is enough? That depends partly on your organization, says Brown. “If you are a knowledge-based organization with highly skilled workers making $80,000 a year, you’re not likely to get away with paying a few hundred dollars,” she says. On the other hand, $500 is a lot of money to someone making $15 an hour in a call centre. You can opt to pay according to a sliding scale; just be sure to clearly outline your system to employees to avoid any misunderstandings “ “You may find that $200 is acceptable to employees, when you would have been willing to pay $500,” says Woolf.

Launch it with a bang!

Instead of sending employees an e-mail announcing your new program, host a kick-off event. Invite staff to the boardroom or cafeteria for coffee and hand out flyers that outline the program. Put up posters and make the event fun and memorable by giving away inexpensive items, such as pens or mugs that are
embossed with the program logo.

Provide ongoing support

The No. 1 reason that employee referral programs fail, says McConnell, is that companies ignore it. Regularly advise your staff that you are looking for good people by including a reminder when you post new job opportunities and announcing it at all-staff meetings. Place your posters in high-traffic areas for increased visibility.

Widen your net by occasionally sending a flyer or brochure promoting the program to your employees’ homes. That way you give spouses or other family members a chance to get involved.

Finally, declare victory when you successfully hire a referred candidate and recognize the person who referred the new employee, says McConnell. Reminding staff that Jane in accounting or Jack in IT earned the employee referral bonus will renew interest and keep your ERP top of mind

Originally published by PROFIT Magazine, Visit

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