Now that the talent pool for certain roles (for example software engineers) is very tight, it is time to create or dust off your employee referral program if your company has not already done so.

For those who do not know,  an employee referral program is a program, where employees recommend qualified friends, relatives or colleagues.  Such a program can be an excellent source of candidates and eventually hires. For the employee whose recommendation leads to a hire, there will be various rewards.

Hand writing Referrals with blue marker on transparent wipe board.
Hand writing Referrals with blue marker on transparent wipe board.

Setting up a program is pretty easy.  By researching the Internet, you will be able to find samples of guidelines used by other companies.  Also, you will be able to find software that can help you administer and manage the program.

Once your program is established, each company should make sure that the program provides enough incentive for your employees to want to participate. Referral awards should fall into the $1,000 to $5,000 per hire to make your employees hungry to make the referrals. In addition, it would be great for companies to set up two annual drawings at the end of the year; one for the pool of employees who had a successful referral hire and one for those employees who participated in the program but who did not have a hire. You should make the prizes substantial such a trips, iPads, etc. to encourage participation.

You will find a well-run employee referral program to be your most cost-effective hiring tool as well as the program that produces the highest quality hires.

So, turn your staff into a recruiting team and watch those tough to fill positions get filled!