Why is the most cost-effective way to recruit so often ignored?

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I am often asked about what are the best methods to find quality staff – should they advertise on a particular jobs board? Should they use LinkedIn or maybe some vertical jobs boards? Should they try some offline media as well as online?  You get the idea, but I am often surprised by the number of organisations I speak to who don’t bother promoting internal vacancies to their own staff. Employee referral schemes or more commonly known as ‘refer a friend’ (RAF) schemes are the most cost effective way to recruit top-quality candidates. The financial award typically offered to staff who recommend someone to their employer is c. £700. Obviously the amount varies dependent upon the nature and size of the business and normally there is a fixed period that the new recruit has to stay.

If you think about the power of social media, an average employee now has c 150-175 contacts on social media networks alone – so a 1000 employee organisation could mean 150,000 contacts. In some recent research by Jobvite, employee referrals have the highest applicant to hire conversion rate –only 7% apply but this accounted for 40% of all hires.

What was interesting was that referral hires appear to enjoy greater job satisfaction and stay longer at their respective employers. 46% stay over one year and 45% over 2 years.

One of the key findings of IRS’s survey (the sister publication of Personnel Today) of 436,000 people showed that despite filling 10% of vacancies per year, 77% of respondents agreed the schemes more than recouped the time, money and effort involved in running them by helping them find good quality recruits. 74% agreed that the schemes help to foster employee involvement.

So clearly RAFs are a very effective way to recruit quality candidates. The one key area that is often overlooked is the way organisations promote their schemes – this is vital. Consistent messages on company intranets, email alerts, reminders of the cash incentives, well produced quality internal posters around the organisation with clearly defined messages are key. Again quality produced ‘refer a friend’ ‘cards with the key benefits of working for that particular employer.

Many years ago my business helped Virgin Mobile with their employer branding and recruitment comms. Virgin had just opened their business in Trowbridge, Wilts and were struggling to recruit call centre staff.  We helped design a very eye-catching  ‘refer a friend’ business card style flyer which was enclosed in the pay packets to all the existing staff who in turn handed to their friends and family. The scheme was an immediate success and as well as the recommender receiving £500 it created an almost family feel within the business. It was by far the most cost effective method to attract likeminded candidates.

So my advice –before you spend a fortune on recruitment advertising or on recruitment consultants, take a closer look at your ‘refer a friend’ scheme.  It could save you a fortune and a lot of wasted time.