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 recruiting methods.
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.