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Employee Referrals

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This presentation describes how employee referrals are fast overshadowing other forms of recruitment , especially in IT companies .

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Employee Referrals

  1. 1. RECRUITMENT VIA <br />EMPLOYEE REFERRALS<br />By Sourabh , 10HM30<br />
  2. 2. CONTENTS<br />Introduction<br />What motivates referrals ?<br />Advantages<br />Disadvantages<br />Why employees don’t refer<br />Ten steps for a successful employee-referral program<br />Conclusion<br />
  3. 3. INTRODUCTION<br />An employee referral scheme encourages a company's existing employees to select and recruit the suitable candidates from their social networks. <br />As a reward, the employer typically pays the referring employee a referral bonus .<br />
  4. 4. INTRODUCTION<br />The employee referral system is the preferred source of recruitment for many IT organisations.<br />Thoughtfully implemented employee referral plans are excellent ways to attract the best people at the lowest cost. <br />
  5. 5. INTRODUCTION<br />Intel Corp. uses a combination of monetary and non-monetary incentives<br />In addition to a cash reward for referrals, the company also offers a raffle for those employees who've made referrals. Ex : a $1,000 travel voucher or a home entertainment system.<br />50 percent of the company's new hires have come from referrals.<br />
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  9. 9. WHAT MOTIVATES REFERRALS ?<br />Based on a survey conducted by Referral Networks , employees refer because:<br />42 % of respondents wanted to help a friend find a good job<br />24% of respondents wanted to help the company<br />24% of respondents were motivated by a reward<br />
  10. 10. ADVANTAGES<br />1.Improved candidate quality, ‘fit’, and retention<br />2.Reduction in Recruitment Expenditure<br />3.An opportunity to strengthen the bond with existing employees<br />
  11. 11. 1.IMPROVED CANDIDATE QUALITY, ‘FIT’, AND RETENTION<br />The relationship between the referring employee and the candidate allows the candidate <br />to understand the culture of the firm<br />to assess his/her own likelihood of success at that firm<br />to be better prepared to face interviews and other steps in selection<br />Also there is a matching of expectations between employer and candidate , resulting in increasesd level of staff retention<br />
  12. 12. 2.REDUCTION IN RECRUITMENT EXPENDITURE<br />Even if incentives and rewards need to be paid to the referring employees , there are cost savings for the firm<br />Ex : Referral programs cost $500 for employees, versus $2,884 and S726 for print advertising, and even more for agencies and executive recruiting firms, according to the 2000 Employment Management Association's cost-per-hire survey<br />The company’s Human Resources headcount can be streamlined and be used more efficiently <br />
  13. 13. 3.AN OPPORTUNITY TO STRENGTHEN THE BOND WITH EXISTING EMPLOYEES.<br />Referral programs acknowledge and reinforce the company's commitment to rewarding the individual for helping the company. <br />Additionally, an Ohio State University study shows that employees hired through referrals have a retention rate that's 25 percent higher than that of employees hired through other methods.<br />
  14. 14. DISADVANTAGES<br />An employees social network is limited - It may compromise the diversity of the workforce<br />Actively referring candidates increases an employee’s workload and may be detrimental to their main responsibilities<br />The best and most relevant candidates may not be acquainted with an existing employee of the company<br />
  15. 15. WHY EMPLOYEES DON'T REFER<br />The top three responses for not referring, according to the survey by Referral Networks:<br />78 percent: Don't know anyone suitable for the positions<br />42 percent: Afraid of the consequences of referring a bad candidate<br />21 percent: Process is too much of a hassle<br />
  16. 16. TEN STEPS FOR A SUCCESSFUL EMPLOYEE-REFERRAL PROGRAM<br />1.Strong commitment from the top management<br />2.Simple minimum rules <br />3.Let everyone participate including senior managers and HR staff<br />4.Involve and reward outsiders like employees' friends and former business associates<br />
  17. 17. TEN STEPS FOR A SUCCESSFUL EMPLOYEE-REFERRAL PROGRAM<br />5. Give VIP status to referred resumes<br />6. Let employees track progress on the the hiring process<br />7. Make it easy to refer by having a well designed Intranet<br />
  18. 18. TEN STEPS FOR A SUCCESSFUL EMPLOYEE-REFERRAL PROGRAM<br />8.Promote constantly and motivate staff with company-wide congratulatory e-mails from the CEO<br />9.Pay a decent bonus - neither too high nor too low<br />10. Pay it fast <br />
  19. 19. CONCLUSION<br />Employee referrals provide a win-win-win situation to all the parties involved – Employer , Employee and the Candidate<br />More and more firms are resorting to employee referrals and are reaping the benefits .<br />
  20. 20. THANK YOU<br />

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