Candidate Referral Programs

It's a clear indicator that the economy is recovering. Recruiting is up.

When expanding a candidate pool, in addition to traditional recruiting methods companies may use a candidate referral program. While there are associated risks, if properly implemented a referral program can provide a pool of passive candidates that are of higher quality. Let's face it, an employee isn't going to refer a candidate that's a poor fit. Any candidate the employee brings in is a reflection on that employee.

If you are developing a referral program, here's a few basic questions:

1. Are all positions to be eligible for the referral?
2. Are all employees, including managers and supervisors, able to participate in the program?
3. Do you wish for your referral program to include individuals that are non-employees? Non-employees would encompass vendors, consultants, customers and even former employees.
4. What size is the referral bonus? Is it the same for all positions? Should it be a higher amount for a professional position versus hourly position?
5. How long must the new employee be retained prior to the payment of the bonus? Pay 100% up front? 50% up front with balance at conclusion of an identified time frame? 100% at the conclusion of the identified time frame? Personally, hey, it's a REFERRAL bonus. Not a retention bonus. Pay the referral out up front!
6. Should priority be given to the referrals over other candidates?
7. Should the referring employee pre-assess the candidate for the open position? This will allow the organization to ensure that the employee has the skills and abilities for the position prior to interviewing.

As with any referral program, communication is key. Employees must be aware of what positions are being recruited for and what the requirements are of each position. Remember, employee referrals should add to the quality of the candidate pool.