employee referral crossfire

Employee Referral Crossfire

In Search of a Bright Spark

Master Burnett Gerry Crispin

Every company should have a referral program. ERP hires fill more openings than any other Source of Hire. The more the merrier! ERPs produce better hires- EEs are less expensive, perform better and stay longer. Referral and ‘recommend’ are synonymous. Every employee should be asked to refer. Every employee who refers is equal. Referral programs are equally effective for every job family and every location. Employee referrals are the real deal. Other referrals are not worth pursuing. Rewarding Referrals with money is good. Bigger rewards are better. Referred candidates should receive special treatment. Employees who refer should receive special treatment. ERPs negatively impact diversity. Referrals that employees seek out are better than referrals initiated by candidates. Referral programs require little work once they are introduced. Social Networks will drive referrals through the roof.

ERP Myths or Simple Truths?

Master Burnett Gerry Crispin

71.2%

7.7%

5.8%

7.7%

7.7%

Just About Everyone Has A Referral Program

Source: CareerXroads Colloquium, 9/2010

What Percentage of Your Hires Are From ALL Referrals?

28.7%

% Referral Hires

# R

espo

ndin

g


Career Fairs

Print

3rd Party

Temp/Contract-to-hire

Rehires

Direct Sourcing

College

Career Site

Other

Walk-ins

Job Boards

Referrals

Source: CareerXroads SOH, 3/2011

2010 Sources of Hire [External]

How Many Referrals Will Yield 1 Hire?

REFERRALS

%

Res

pond

ing

8.1%

20.5

%

21.4

%

18.2

%

31.8

%


How many Referrals does it take to make one hire?


10.3 (N= 240,000 referrals)

Employees

% R

espo

nse

For

Eac

h Ty

pe

Spe

cific

Pos

ition

s O

nly

What Type of Referral Gives You The Most Hires?

Gen

eral

Pos

ition

s


How Often Do You Promote Your Employee Referral Program?

31.4% 7.8%

11.8%

11.8%

17.6% 19.6%

(i.e. specific campaigns)


Source: Cargill CareerSite

What Sources Are Productive For Diversity?


Employee Referrals

CANDIDATE EXPERIENCE: Do you provide or promise externally referred candidates any special treatment? (i.e. unique to being a referral like a guarantee of an interview, promise feedback, etc).

NO

82.0%

Yes

18.0%


How Do Candidates Learn About Your Referral Program?


‘EXPERIENCE’ of CANDIDATE BEING REFERRED: Indicate which of the elements below are a part of your ER program.

Candidate is required to indicate the name of the Referring Employee in the application process.

Candidate is also asked about the quality of their relationship to their referral (i.e. friend, etc.)

Candidate is invited to contact recruiter after rejection even if they were not selected for final slate.


‘EXPERIENCE’ of EMPLOYEE MAKING REFERRAL: Indicate Which Elements Below Are Part of Your ER Program.

All referring employees receive an automated acknowledgment to thank them for making a referral.

Employee is surveyed about the quality of their relationship to their referral.


BONUS- GENERAL: Do you offer bonuses?

13.6%

79.5%

15.9%

9.1% Yes, even those making

referrals that do not become hires get something or have a chance to win something.

No, our program is a basic "Attaboy". No monetary incentive or product or service

awards are given.

Yes, a raffle or contest is periodically used

to incent referral behavior..


BONUS- SPECIFIC: How Much?


PROGRAM FORMALITY: Does Management Yield Results?

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

Formal, Dedicated Budget/Staff

Formal, No Dedicated Budget/

Staff

Informal Managed Ad-hoc, No Management

2006/2007 2006/2007 TP 2008/2009 2008/2009 TP 2010/2011* n=267 n=40 n=252 n=45 n=41

Source: DJS ERP Benchmark Study (Formerly AIRS/DJS)

EXTERNAL HIRES PRODUCED: Overall versus Top Performing

26.2% 27.1%

35.0%

41.1%

46.3%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

2006/2007 2008/2009 2010/2011*

Overall Sample Top Performing


Measure Employee Referral Job Board Difference Cost per Hire (CpH)1 $2,306 $1,671 +$635

Offer Acceptance % 94.7% 78.4% +16.3%

Voluntary Turnover < 1 Year 6.8% 22.1% -15.3%

Voluntary Turnover > 1 Year 5.2% 14.9% -9.7%

Involuntary Turnover < 1 Year 0.9% 4.3% -3.4%

Quality of Hire QoH2 4.21 3.47 +21.3%

ERP VERSUS MAJOR JOB BOARDS: Beyond Cost per Hire

Source: DJS Private Client Study, 2008

0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% 90.00%

Retention Rates

Performance Appraisal

Manager Satisfaction

Actual Performance

Promotion Rates

MBO Attainment

Bonus Compensation

2010/2011* 2008/2009 TP 2008/2009 2006/2007 TP 2006/2007

COMMON QoH MEASURES: Real QoH Measurement is Rare


ERP CANDIDATE KNOWLEDGE: Fortune Hunters Do Exist, But Not In Numbers

Source: DJS ERP Participant Experience Study

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

$- $5,000.00 $10,000.00 $15,000.00 $20,000.00 $25,000.00

REWARDS AND PARTICIPATION: The Money Doesn’t Matter

Source: DJS ERP Benchmark Study (Formerly AIRS/DJS), 2008/2009


GET THE PITCH RIGHT: Market Opportunity Not Income


PRIORITIZATION: How Comfortable Are Employees With It?

NEGATIVE IMPACT ON DIVERSITY: Not In Most Cases

TOP PERFORMING PROGRAMS DIFFER: Communications are KEY!


TOP PERFORMING REQUIRE EFFORT: Great ERP’s Rarely Just Happen!

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