Question: What’s the best way to hire great employees? Answer: word of mouth from your great employees.
Employee referral programs offer many benefits including a lower cost per hire (no money spent on ads and recruiting firms), and a shorter time frame for hiring (most employees will recommend people who they know are looking for jobs and who will perform successfully). An added bonus: a recent Ohio State University study reports that employees hired through referrals have a 25 percent higher retention rate than people hired through other processes.
Employee referrals become automatic when you have a desirable work environment. In his book, (Great) Employees Only: How Gifted Bosses Hire and De-Hire Their Way to Success, (Wiley, October 2006) author Dale Dauten gives readers an inside look at creating "WOMP," which stands for "word of mouth potential."
"You want your work environment to be a story that employees will tell," says Dauten. "As they do, they reinforce the notion that they work somewhere interesting or special, and they become a megaphone, sending out recruiting messages for you and your group."
Structure an employee referral system to help you find the type of qualified candidates you need by offering clear and concise guidelines, rewarding employees for their efforts, making it easy for employees to refer others, and maintaining an organized referral tracking system, says Dauten.
Johanna Rothman, president, Rothman Consulting Group, Inc. and author of Hiring the Best Knowledge Workers, Techies and Nerds: The Secrets and Science of Hiring Technical People, (Dorset House Publishing Company, Inc., 2004), agrees and shares the following guidelines on how to develop and sustain a successful employee referral program.
Identify key people. "Key people are the ones who get stuff done," she says. "They can usually be counted on for solid employee referrals."
Explain the position. Let your employees know what qualities you want in a candidate. "If it’s important enough to you, then you’ll talk about it with your people," says Rothman. "You’ve got to remind people, because they have their jobs to do. Ask them behavior-description questions to prompt them to remember specific situations such as, "Who was the best salesperson you’ve ever worked with and what made him or her so good?"
Make it worth it. "My rule of thumb is that an employee referral should feel like a substantive bonus to an employee," says Rothman. "And don’t make them jump thorough hoops or wait six months to get the bonus." Rothman says that employees shouldn’t have to wait the typical three months for a bonus if a referral is hired, they should see something right away – even if it is a token, just so they are acknowledged. Then maybe after a three-month period, they can see a bonus or vacation time.
Make it easy. "If you make people do boatloads of paperwork, it will turn off an employee referral program," says Rothman. "Make it a simple process or they’re not going to do it."
Track the results. You track weekly sales quotas and goals, so why wouldn’t you track the status of your hiring in the same way? "It’s easy to say that hiring is a priority; but you have to show that hiring is a priority with your actions," says Rothman.
Encourage networking. Encourage employees to keep their eyes and ears open. Salespeople are good at building networks for selling their products, so they should be good at building networks for recruiting others.