Employee referral schemes
Employee referral schemes are popular with organisations where competition for talent is fierce and the most gifted people are at a premium. Staff are rewarded for suggesting likely candidates to their employers, when the recommendation results in a person being recruited
Advantages
- new employees are already 'vetted' by staff you trust
- a cost effective way of recruiting talented candidates
- new recruits are likely to settle in quicker and stay longer because they have an instant circle of acquaintances
- new recruits may already have an understanding of the organisation
- the schemes are simple to run
- the schemes are easy to publicise through internal communications (eg through the intranet or in-house magazines)
Disadvantages
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may stifle fresh ideas through existing staff suggesting 'like-minded' people
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unfair to other prospective candidates
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may lead to a less diverse workforce
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no guarantee that the right candidate will be suggested at the appropriate time
Cost
Minimal.
Length of the process
Can vary depending on availability of suggestions, but generally short.
Potential for discrimination
Recruiting through employee referral schemes, headhunting and word of mouth/networking all have implications for diversity. These methods of recruiting limit the pool of applicants and can restrict that pool to people who are culturally similar to, or reflect the personal preferences of, current employees.
Conclusions
Employee referral schemes are possibly most suitable for short term contracts. They can be cost effective in getting talented employees, but may stifle diversity within an organisation and limit the ability to employ people with fresh ideas.
