Designing a Referral Recruitment Program: Seeking Guidance on Best Practices and Incentives

Hi group,

I have to design a referral recruitment program as my summer project. Can you please help me understand and identify a few things about this concept:

- How can one design the referral recruitment program?
- What procedure should be followed?
- How to communicate the reference scheme to employees?
- What should be the guidelines or rules and regulations?
- What should be the incentive given to the referee employee?

I would be obliged if you could help me in this respect.

Regards,
JASMIN
MBA-HR
UBS, Chandigarh

Hi,

Answers mentioned:

- How can one design the referral recruitment program? This should be done in the same manner as how one would advertise for a vacancy, but make it more attractive as this would be based on CVs referred by the employees.

- What procedure should be followed? Fulfillment of basic criteria, knowledge of the product and department, etc.

- How to communicate the reference scheme to employees? An email could be sent by the admin team or the respective HOD.

- What should be the guidelines or rules and regulations? Nothing really specific.

- What should be the incentive given to the referee employee? Depending on the grade one is looking at, it varies from 5k to 15k.

Hi Jasmin,

I am also working on a project about Employee Referral Programs. In fact, I have already completed it. Could you please provide me with your email address so I can send you some specific details? I can't share them here as they are confidential.

Regards,
Rohit

Hey Jasmine,

I am currently handling another project. For this particular project, I need some help in obtaining information about the packages offered by various organizations in various sectors to Graduate Engineers. I mean, what kind of CTC (Cost To Company) a company from manufacturing, FMCG, Automobile, IT, etc., offers to students from IITs, NITs, Private Engineering colleges, etc.

Please help me out if you can. Mail me back at rohitgupta@tatamotors.com.

Regards,
Rohit.

!!!EMPLOYEE REFERRAL PROGRAM!!!

In the present scenario, companies are depending on 3 types of recruitments

1. Campus selection (fresher).

2. Job Consultants / Paper Ads

3. Employee referrals.

Of the three, the one most preferred by HR are the Employee referrals. Some of the reasons being, easy to get potential, reliable and experienced candidates, low or no investment, employees feel that they can work with their friend(s), which will create lively environment @ work and increases productivity for company

But still most of the HR gives preference to those who meet the job criteria…

Q) How can one design the referral recruitment program?

* Whenever an Employee Referral Program is to be announced, there should be some basic guidelines that should be followed. Like what is the total requirement and time frame to fill that requirement, what type of positions are offered, who are eligible for referral program, sketch candidate profile, how much %age of candidates are reserved under ERP as company may outsource some %age of manpower requirement to consultants.

How to communicate the referral scheme to employees?

Whenever there is a man power requirement due to project expansion etc, an internal mail / poster on notice board should be used for announcing Employee Referral Scheme. There should be a dead line as till when an employee can refer a candidate. Also include how much money will be paid for each successful referral and when it will be paid.

What should be the guidelines or rules and regulations?

Basically every job carries some minimum requirements like X- yrs of Exp. Tech / Non tech and programming skills, various domains / projects he worked on and job abilities required for that post.

What procedure should be followed?

Collected resumes should be screened and then candidates to be short listed and informed to both candidate and respective employee who referred him. Like every other interview, each candidate should under go three rounds of interview and then negotiate about pay if got selected. Also it will be better if a clause like minimum work period a candidate should stay in the company / though not mandatory.

what should be the incentive given to the referee employee?

Incentives should be based on number of candidates who successfully got placed. Each selected candidate should have completed minimum period – say 60days (Induction + Training and Job) before company pays incentive. {This clause is because company has to recoup the money invested on the candidate and that paid to the referring candidate}

Incentives should be anything from 2k per candidate and should increases with every additional candidate referred and successfully completes 60 days. Also announce reward for TOP REFERRER of the month / week.

Hope this information is useful for all those working on Employee Referral Program....

Regards

Kishore Chelluri

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Hi Alex,

Kindly give me your ID so that I can send you the information.

Regards,
Jasmin
MBA-HR
UBS, Chandigarh

Hi Rohit,

I would appreciate it if you could share the document (Employee Reference Program) with me. These days, I am working on it, and your document would provide me with more exposure in refining it.

Regards,
Mitu
mitu.hr.corner@gmail.com

Hi Jasmin,

Good piece of work chosen.

ERPs are very common these days as they have the advantage of relatively lower cost, short lead time, and fewer employees leaving their jobs.

My suggestions to you:

How to design:

Keep in mind what kind of job you are advertising. You should be clear about the job, the people in the organization who understand the job and the requirements, total vacancies, and the time frame in which they are to be filled.

What is the procedure?

The ERP should be designed so that employees are given an employee ID, which may be the usual Employee ID or a specially designed ID. Every resume should specify the ID. Each employee should be restricted to referring, let's say, 2-4 resumes.

The referring employee should also meet certain qualifications, like having worked with you for at least a year or more. We may also prohibit HR personnel from the organization from participating.

Incentives should vary:

For example, the referring employee at the executive level will receive Rs 3000/- for each successful recruitment, employees above the executive level Rs 4500/, and senior-level employees Rs 7000/.

We may also include a feature to avoid unnecessary referrals. For instance, if an employee's referral does not match the criteria two consecutive times, they will not be eligible to refer for the next time.

Prayers,

Ritu

Hi,

This is Kiruthika from Bangalore. These discussions have given me more knowledge about ERP. I have a query. I have a total of 5+ years of experience in both Admin and HR, out of which one year was spent in the Manufacturing industry as an HR executive and one year in a consultancy. Four years of my career were in Coimbatore, and the remaining 1+ year in Bangalore. Please help me in transitioning into a Generalist role in a software company.

Thank you.

Hi Ritu / Jasmin,

I would like to make a point that there should be no variation in pay with respect to the designation of the employee. For example, a junior employee should be paid 1000 rupees, and a senior employee should be paid 3000 Rs. This disparity may lead to issues with the referral program as most employees may feel they are receiving less reward than their superiors.

Do not restrict people from referring more than 2-4 friends. From HR's perspective, the more people referred, the better the chances of finding suitable candidates.

Contests and programs should be fair and inclusive to allow everyone to participate.

Keep employees updated on the number of referrals and who has been selected regularly through emails, the company intranet, or by posting on the noticeboard. This will create a competitive atmosphere.

All the best!

Kishore Chelluri

I just did what the CITE HR's PUNCHLINE is... "SHARE KNOWLEDGE". Well... mention not Jasmin. I just shared what I know, and I'm happy it helped you and those who want info on this. All the best.

Regards, Kishore Chelluri

Hi Rohit,

I am already implementing a referral program. Could you please forward your work on that to me as well, so that I can make changes in my work? My email address is manju1504@yahoo.com.

Regards,
Manjunath

Hi,

This is Tejesh. I started an Employee Reference program in our organization. I prepared a circular and sent it to all the staff, and we announced the Employee Reference Bonus of Rs. 1000/- for those who refer a candidate. If the candidate is selected and joins the organization, the referred employee will receive Rs. 1000/-. This bonus will be given once the new candidate completes 6 months of service in the organization.

I am sending you the attached files about this employee reference program.

Regards,
Tejesh