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Hire Efficiently: Employee Referrals

When a company doesn’t have enough of qualified employees, productivity suffers. When productivity goes down the tube, so does the business’ ability to maximize profits and satisfy their customers’ needs. While recruiting employees via online job boards, newspapers advertisements and career fairs is fine, an employee referral program can be a way to help fill many open positions in your company.

Benefits of Referral Programs

Employee referral programs have been used by companies for decades to fill jobs. Employees who participate in these programs understand that the people they refer reflect on them. For this reason, new hires that are referred by current employees, tend to be of higher quality. If an employee’s reputation is at stake, she is less likely to refer someone who is unqualified or lazy.

Since people tend to associate with others in their profession, an employee referral program can be especially helpful when available positions require highly specialized skills and are hard to fill through other recruitment methods. In addition, when you use employee referrals to hire workers, it can reduce the need for newspaper ads, job fairs and other pricey recruitment tactics.

A referral program can be as simple as asking current employees if they know someone who might be qualified to fill a particular job. However, when you use this type of approach, the results are often lackluster. Employees want to know what’s in it for them. If they aren’t getting anything out of the deal, they are not likely to exert their energy trying to help.

Best Type of Referral Program

An ideal referral program emphasizes benefits to employees. They will also have systems in place to reward workers, track the success of referred employees and discourage unqualified referrals. Generally, the most successful programs offer some type of monetary reward for workers who refer people who stay longer than three months.

The amount of the reward must be significant enough to motivate employees, but not so much that it encourages them to recommend people who aren’t qualified. The kind of system you use will depend on the nature of your business and the kinds of things that motivate your employees.

Not having the right kind of employees can cost your company big. Using employee referrals is a reliable way to keep a pool of passive candidates to fill open job positions. In the end, the profit potential your company will gain from having qualified workers will outweigh the cost of the referral bonuses used to reward loyal employees.

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