Wednesday, 1 October 2008

Word of mouth recruiting: Is it working?

Today, Mark Sawyer takes a look at ‘Word of mouth recruiting’. How does your company get to potential employees that have those hard-to-find skills, and is it working? We would love to hear your thoughts.


To me that comes under the banner of employee referral schemes! Many companies say they have a scheme and that it is highly thought of within their firm. They suggest that the financial rewards for doing so is more than generous. However, it is widely recognised within the head hunter community that these schemes are little more than a token gesture to tick the corporate box. In reality and in my experience of delivering recruitment process management (RPM), companies should be able to hire between 35-40% of their staff through existing employees networks, but only if created, managed and supported appropriately.

There are several advantages to employee referral schemes, the first being that new recruits are likely to settle in at the company quickly and stay for longer because they have an instant circle of acquaintances through the friend that suggested him or her. The association with a member of staff also means the new employee may already have some understanding of how the business operates, and he or she will be motivated not to put in a poor performance that will reflect badly on the friend that made the recommendation. From a company’s perspective I can see how they feel it is a cost effective route to market, especially in a tight market where talent is scarce like that of the Renewable Energy vertical. So why do companies struggle to hire more than 15% of new recruits through an employee referral programme?

1. Current employees are not aware of the scheme. It is in the employee handbook – but when was the last time you read your handbook?

2. They don’t see those in their sphere of influence acting on it. Good behaviour breeds better behaviour and poor behaviour breeds….well you know!

3. The reward is always weighted in favour of the company and is typically £250-400. Although I have seen some as high as £1000, but only after the employee has completed 12 months service. (a perceived slap in the face when recruiter fees are a minimum of £5k and at the more senior end £50k)

4. People are not buying into actually improving the company – they have apathy with the culture.

However, there are concerns that employee referral schemes can stifle fresh ideas and limit the influx of new blood to a business because existing employees tend to suggest candidates in their own image. I have also heard that this situation has also led to worries that a need for fairness and diversity may not be satisfied.

A final potential problem with using employees as a source of new staff is the hit and miss nature of the method. There is no guarantee that the right candidates will be suggested at the appropriate time. And for this reason, the role of the professional recruiter is still a valid one.

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