Organisations that use employee referral schemes fill one-eighth (13%) of their vacancies through this method, new research has found.
XpertHR’s survey on employee referral schemes found that 69% of employers used staff referrals as part of their recruitment process, with the vast majority (93%) offering a reward to employees.
While three-fifths (57%) of organisations that provided a reward offered a single level of payment to employees who referred people for vacancies that were successfully filled, the remainder had two or more tiers of cash incentives, based on how difficult it was to fill the role or the seniority of the position.
The survey of 172 organisations found that the median size of reward for the lowest tier of referrals, and for employers that had a single level of financial incentive, was £500. However, the level of payment varied considerably between individual organisations.
One professional services firm surveyed offered £2,000 for referrals to low-ranking clerical roles, rising to £3,000 for senior clerical staff and £6,000 for analyst positions.
Nearly half (47%) of organisations protected themselves against paying out rewards to staff for referrals that did not work out by waiting until the recruit had successfully completed their probationary period before payment was made.
Rachel Suff, author of the report, commented: “Referral schemes can be an effective alternative to formal recruitment – they are typically cheaper and prospective employees are likely to have been given a realistic job preview by the friend who is referring them for employment.
“As well as demonstrating existing employees’ engagement with their employer, referrals can boost the level of cultural fit between referred recruits and the organisation.”