Is an Employee Referral Program Your Key to Supply Chain Recruiting?

Client Resources | September 18th, 2019

Most companies have employee referral programs, but often, these programs are not producing the results that they should.

Employers can get more out of these programs by ensuring that they are simple, backed by good communication and feature a reward structure that truly motivates employees to refer high-quality candidates.

Studies have indicated referral programs are much more effective, in many ways, than hiring through postings on job boards. Referral programs have been shown to reduce overall hiring costs and increase the return on hiring investments because referred employees typically take less time to become productive, require less onboarding, are happier in their jobs and stay longer with the business. A referral program is also a very effective way to connect to passive job seekers

While many organizations know the value of a referral program, they don’t always run these programs very efficiently. One employer survey by recruitment company HireClix found 75 percent of respondents saying their employee referral program isn’t meeting its goals. The Boston area company also found the top reason employees don’t use a referral program is frustration due to poor communication from the company. Many employees also said their employee referral program is difficult to use, time-consuming and doesn’t provide adequate recognition in return for good referrals.

Have an Easy-to-Use Program

If your employee referral program requires your employees to do a lot of heavy lifting, you probably aren’t going to have a great participation rate. For example, requiring referring employees to upload a resume or written personal endorsement can have a chilling effect.

Have an online referral system that can be done in about three clicks. In fact, only requiring contact information for the person being referred can be effective and very easy for employees to use.

A good employee referral system also makes it easy to determine who should get credit for the referral.

Keep Employees in the Loop

Another big reason behind low participation in a referral program use is staff members not knowing key details, like which jobs are open.

To address this issue, regularly bring up your referral program and promote open positions that need to be filled. Luncheon sessions can be effective ways to show staff members effective ways to review their contacts and pick potential referrals for an open position. Also, be sure to feature critical open positions on social media and encourage your employees to do the same.

Engage Referrals and Those Who Referred Them

Don’t let any referrals fall through the cracks of your hiring process. The chances of employees making additional referrals if an initial suggestion gets lost or ignored drop off significantly.

Smaller companies can and should respond to each referral with personalized update messages, while bigger businesses can use an automated HR system to make certain every referral and referrer receive updates during the consideration process.

Giving updates to both staff members and referrals at major stages of the process is what businesses should be doing. More than that, like allowing staff members access to follow the progress of their referrals, can lead to privacy-related issues.

Let Us Improve the Efficiency of Your Talent Acquisition Efforts

At ZDA, we specialize in helping our clients find best-fit candidates for their open positions. Please contact us today to find out how we can support your company’s hiring processes.

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