Employee referral programs are more cost effective than
recruitment agencies according to 80 per cent of respondents to a US survey.
Almost 70 per cent of respondents to the 2001 Employee
Referral Program Survey said that ERPs are more cost-effective than other
Thirty seven per cent claimed ERPs
were effective compared to other recruiting methods while 36 per cent said they
were effective in increasing retention of current employees.
More than 65 per cent said their organisations have either a
formal or informal ERP with financial rewards, cars, and gift certificates
offered as incentives and usually distributed after three months.
Helen Drinan, SHRM president, said, “Employee referral
programs are one of the most effective recruitment tools employers have. In
today’s tight labour market, organisations need workers fast. And what better
way to tap into talent than to encourage current employees to identify and
refer potential hires to your organisation?”
The joint research by SHRM and Referral Networks surveyed
the opinions of 586 HR professionals in the US regarding the structure and
effectiveness of employee referral practices, and it was released at SHRM
annual conference in San Francisco.