Employee referral campaigns are an important recruiting option. The firm posts announcements of openings and requests for referrals on its intranet web site, bulletin, and / or wallboards. Prizes or cash awards are offered for referrals that lead to hiring. AmeriCredit uses ‘it is you’ve got friends, we want to meet them’ employee referral program. Employees making successful referral receive $1000 awards, with the payments spread over a year. As the head of recruiting says, Quality people know quality people. If you give employees the opportunity to make referrals, they automatically suggest high caliber people because they are stakeholders. The Container store uses a successful variant of the employee referrals campaign. They train their employees to recruit new employees from the firm’s customers.
Pros and Cons: The biggest advantage here – and the reason why so many employers favor this approach is that referrals tend to generate high quality candidates. Current employees will usually provide accurate information about the job applicants they are referring, especially since they’re putting their own reputations on the line. The new employees may also come with a more realistic picture of what working in the firms is like. Referrals also facilitate diversifying your workforce. One survey found 70% of minority /ethnic candidates search for jobs on corporate Web sites; 67% use sites like Monster, 53% classified ads, 52% referrals and 35% headhunter /agencies. However only 6% listed corporate Web site as one of the five ways they actually found jobs; 25% listed referrals /
A survey by the Society for Human Resource Management(SHRM) found that of 586 employer respondents, 69% said employee referral programs are more cost effective than other recruiting practices and 80% specifically said they are more cost effective than employment agencies. On average referral programs cost between $400 and $ 900 per hire in incentives and rewards.
However, the success of the campaign obviously depends on employee morale. And the campaign can backfire if the firm the employee’s referral, and he or she becomes dissatisfied. As noted relying on referrals my also be discriminatory if most current employees (and their referrals) are male or white.
Particular for hourly workers, walk in – direct applications made at your office – are a big source of applications. Employers encourage walk in by posting Hiring signs on the property. Treat walk in courteously and diplomatically for the sake of both the employer’s community reputation and the applicant’ self esteem. Many employers give every walk in a brief interview with someone in the HR office, if it is only to get information on the application in case a position should be open in the future. Good business practice also requires answering all letters of inquiry from applicants promptly and courteously. And from a practical point of view, imply postings a help wanted sign outside the door is accost effective way to attract good local applicants.
Recruiting Source Use and effectiveness:
Figure summarizes a survey of best recruiting sources. Internet job boards garnered the most votes, followed by professionals /trade job boards and employee referrals programs.
Research also reveals several guidelines employers can use to improve their recruiting efforts effectiveness. For example, some recruitment sources produce higher quality candidates than do others. Thus referrals form current employees yield applicants who are less likely to turnover, and more likely to perform better.
The Cheesecake Factory uses four recruiting sources, employee referrals promotions of current employees, search firms, and online job posting. The firm’s HR head Ed Eynon says the Web has become our No 1 source of recruitment with between 30% and 35% of our new mangers coming through it. The company dos not just post short print type help wanted ads on the Web. For most jobs it includes the entire job descriptions.