Chris Bogh |

Companies of all sizes are finding employee referral schemes a very efficient and cost-effective way of recruiting new members of staff.

It enables recruiters to maximise the social and business networks of existing staff to recommend someone whose skills not only fit the job description but whose working philosophy is a good fit for the business.

Referral schemes are an excellent way of targeting passive candidates, which is proving significant for many corporates. Passive candidates might not actively be looking for a job, and so would not apply for the role if advertised via traditional recruitment methods. Yet, more often than not, they are the best person for the job, the one everyone wants.

Using referral schemes to boost recruits works particularly well in the private sector, where incentives for successfully recommending a new employee can range from simple vouchers to hundreds of pounds.

According to the Department for Business Innovation and Skills: "Employee referral schemes are popular with organisations where competition for talent is fierce and the most gifted people are at a premium."

A good referral system not only brings benefits in cost and time savings to a company, it is an excellent way for employees to feel involved in the growth of their company. Your employees can be your best ambassadors, and publically rewarding referrals also helps boost the entire program.

Managing your referral scheme

Many companies we meet have some kind of scheme in place. Almost invariably the weak link is that it is a manual process, both in terms of distributing the roles but also tracking and reporting.

This can be a very cumbersome way of operating, because much of the administration and tracking can easily be handled automatically. Rather than set up disparate systems the most logical place is your applicant tracking system (ATS).
Technology can help in a number of ways.

Recommend a friend

Allowing candidates to recommend vacancies to their friends should form a seamless part of your career portal. Technology allows potential applicants to easily share job information via multiple social networks such as LinkedIn, Facebook, Google+ and Twitter.

This is a very smart way of communicating, but even better is that once a referred candidate registers on your site; your ATS can track and report back the details of the original referrer, providing the means to offer rewards.

Existing Employees

The same approach works for your existing employees. If your ATS provides an internal jobs board or links directly to your corporate intranet, then it is very simple to broadcast jobs to employees and track their referrals.

Internal Referees

You can also use your existing employees as candidate referees. To do this, prospective staff enter the name and/or email address of an existing employee, who will then receive a notification to provide a reference. This can be filled in online and automatically logged against the candidate.

Do It Well

A referral scheme should be just one of many methods in your recruitment strategy, but if you are going to introduce it, plan it carefully and do it properly by promoting it and using the right technology.

Tracking and reporting is absolutely key to any referral system, particularly if a reward or incentive is promised. If payment is promised, but not delivered, the credibility of the scheme falls apart.

However, it's not just about the technology. You are dealing with people and they should receive the same positive experience as your other candidates. Handled incorrectly you will not only have a disgruntled candidate but also unhappy employees.

But do it well, via your ATS, and the scheme will increase your talent pool and give you access to valuable passive candidates, thus reducing your agency / advertising spend. Plus the referrals are likely to come from the same peer group as existing employees and more likely to be 'your' kind of people.

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