Employee Referrals…yes… yes… no!

ER (TV series)

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A client was explaining to me last week about their 87% direct vacancy fill rate. About half of this was from Employee Referrals. I applaud their efforts and that is a great statistic to evidence their effectiveness.

Yes, I agree that Employee Referrals are a fantastic source of quality candidates.

Yes, I suggest that all organisations should have an Employee Referral programme.

No, it’s not the panacea so make sure you know what you are looking for… let me explain!

The best corporate recruitment advisor that I have ever met is a guy called Alfonso Nunez. He is currently working with RPO Group in Australia. He has a great mind for deep analysis of the business impacts related to how an organisation recruits and he once told me a great story.

The upshot of this story… He was investigating why this particular national sales organisation was not performing to expectation. They had very low staff turnover, low cost per hire and almost no problem recruiting for growth based on a very successful Employee Referral scheme. I can’t do his work justice here but in essence he was able to identify and show that the very success they were claiming in the success of their ER scheme was the root cause of their performance dissatisfaction. He found that the ER scheme was creating a culture of like-minded, mediocre performers whilst the competitors were hiring a new breed of sales people, more relevant and full of diversity. The competitors were changing and winning! His company was full of mates and their mates but were losing!

Therefore the lesson I took out of Alfy’s work was a cautionary note about Employee Referrals. If you need culture change you may need to change the people! Watch out for the like attract like syndrome.

You should have an Employee Referral programme but its one source of hire to be used in balance, not the panacea!

Nice work Alfy!

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About chotey
Recruitment Company Director, Founder, Advisor and Investor

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