59 referrals why employee referral programs should be your #1 hiring source slideshare (1)

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Transcript of 59 referrals why employee referral programs should be your #1 hiring source slideshare (1)

  • 1.WHY EMPLOYEE REFERRAL PROGRAMS SHOULD BE YOUR #1 HIRING SOURCE Making the business case 2014Dr John SullivanRead more at www.drjohnsullivan.com1

2. Why the increased emphasis on referrals? Referrals will continue to become even more prominent because of: More data proving their business impact More firms are shifting to a data driven approach which makes their ERPs much more effective The growth of social media and the Internet make it easy for your employees to find top talent The visibility of prospects work on the Internet New technologies are available New vendors appear every day 2 3. Part IThe business and recruiting impacts of referrals3 4. The 1ST step is building a compelling business caseHere is a list of the business impacts from referrals4 5. Business impact #1 High quality hires ERPs produce the highest quality of hire Hires from referrals perform better on the job than hires from any other sourceLets look at 2 charts revealing source quality >5 6. Referrals are the #1 source for new hire quality Source effectivenessSource effectiveness (out of 5)1. Employee referrals1. Employee referrals3.442. Large job boards2. Social networking sites2.983. Niche job boards3. Corporate career pages2.754. Temp to perm4. Internal job boards2.525. Recruiters 6. Trade media 7. Staffing services 8. College recruiting 9. Career fairs 10. Co-op education 11. Mass media 12. Military Source: staffing.org 2011Source: Aberdeen Group 2013 6 7. Business impact #2 High productivity ERPs produce improved new hire productivity Referred hires from average workers produce 25% more output /profit than non-referred employeesReferrals from top performing employees produce 135% more output / profit7 8. Business impact #3 A high ROI Calculating the $ value and ROI of each ERP hire Start with your average revenue per employee Multiplying that dollar amount by the % of higher output produced by referral hires (25% up to 135%)reveals each ERP hires $ impact on revenue At a struggling firm like Sears using the minimum increase in output of 25%, ($138,200 rpe X 25% improvement) this means that each ERP new hire is worth nearly $35,000 At a productive firm like Facebook, using the maximum 135% increase in output, each ERP hire could be worth up to $1.6 million Compared to a probable cost per hire of less than $10,0008 9. Business impact #4 High retention ERPs hires have a better retention rateReferred workers have a higher retention rate and are up to 30% less likely to quit their jobs9 10. Lets shift to recruiting impactsThe superior recruiting impacts from referrals10 11. Recruiting impact #1 A high volume of hires The highest volume of hires - of all sources of corporate recruits, employee referrals are #1 in volume at between 24.5% and 44% of all hires An even higher volume occurs at top firms at firms with excellent referral programs 50% of all hires come from referrals (Twitter, Facebook and E&Y) and the top firms have reached nearly 80% Up to 8 referrals per opening by assigning prospects to the right employees you can get up to an average of eight referrals per position Lets look at a chart revealing source volume >11 12. Referrals are the #1 source for new hire volume Source popularityVolume1. Referrals24.5%2. Career site23.8%3. Job boards18.1%4. Recruiter direct source6.8%5. College5.5%6. Rehires3.3%7. 3rd party3.1%8. Social media2.9%9. Print2.3%10. Temp to hire1.5%11. Career fairs1.2%12. Walk-ins0.3%Source: CareerXroads 2013 12 13. Recruiting impact #1 Hiring volume at top firms The best firms average 46%Source: yesgraph 13 14. Recruiting impact #2 High quality applicants Higher quality applicants A survey of 73 major employers 88% said that referrals are the # 1 best source for above average applicants HR executives rated referral candidates #1, earning a 8.6 on scale of 10 Referrals also have the highest interview to hire ratio (17% of referrals are interviewed) 14 15. Recruiting impact #3 A better hire ratio A much better hire ratio Although only 7% of applicants come from referrals, they produce 40% of all hiresBetween 14% to 25% of referrals are hired Versus 1% from among all sources combined 15 16. Recruiting impact #4 Time to fill Faster hiring speed / time to fill A referral program can have the fastest time to fill of all sources (29 compared to 45 days)Source: yesgraph Blue light alert referrals are the fastest of all referrals 16 17. Recruiting impact #5 Low-cost Lower-cost hire A well-managed referral program that doesnt focus on the reward as a motivator produces hires at a lower cost than the average cost per hire at a firm17 18. Not all referrals are equal Top-performing employees submit the highest quality referrals Referrals from top performing employees provide significantly higher quality referrals than the average worker (ttp://faculty.haas.berkeley.edu/bo_cowgill/papers/Referrals.pdf)The worst referrals come from people that you dont know that approach you Relative strangers that ask you to please make me a referral produce the worst quality 18 because you dont know their work or skills 19. Part IIWhat are the key elements that are present in top-performing referral programs?19 20. What elements differentiate the top performing programs from the average ones?Key differentiator elementsERP elements for increasing referral quality20 21. # 1 - Prioritize jobs to focus on quality Focus ERP efforts on high priority jobs (40% max) Mission critical jobs Revenue generating jobs Key jobs in high profit and high-growth SBUs Jobs with a high previous referral success rate Hard to fill or high-volume jobs Sudden key vacancies 21 22. #2 Motivate using a help the team approach $ rewards can reduce the focus on quality & impact Use a help the team" approach that emphasizes: Its part of your responsibility as a team player An opportunity to work alongside great people and you wont have to work alongside slackers You will learn more from higher-quality new hires You will be recognized for helping the team Your team will win more frequently Providing this competitive advantage will improve bus. results, stock value and bonuses Show employees the correlation between better business results and a higher % of ERP hires 22 23. #3 Use proactive approaches, not spammingProactive means seeking out the best referrers It is true that Great people know great people, however most employees are extremely busy so in order to get quality referrals you must proactively approach them Proactively approach the teams that have the hardest openings to fill as well as your top referring employees Here are 2 proactive ERP tools to consider >23 24. Proactive referral tools A) The give me 5 approach (Google) Proactively approach top performers and ask them To identify the top five people that they know in their field in these categories The best performer you ever worked with The most innovative The best team player The best manager The best under pressure Then ask your employee to contact these 5 individuals and try to convince them to apply 24 25. Proactive tools B) Reach out to job references for referrals Identify top performing hires from last year Call their references that said accurate things Thank them Ask them Do you know anyone else as good? Ask them to be a future reference source 25 26. #4 - Assigned referral tools 4 Assigned referral approaches to consider A) Use a referral community - for each of its jobs, Accolo selects a few employees based on the likelihood that they will know the right person for a job opening they average 8 referrals for every job B) Assign an individual with a strong connection Zynga executives identify an important recruiting target and then select the employee that has the strongest social media relationship with them. That individual is then coached to make the referral 26 27. Another assigned referral tool C) Assigned boomerang referrals Utilize your corporate alumni group to identify top-performing alumni that work in high need areas and assign an employee to them (DaVita 16%)27 28. Another assigned referral tool D) Most wanted list of assigned referrals Executives identify a list of gamechangers and potential magnet hires at the beginning of the year Key employees are asked to seek out these highly desirable individuals and to build a relationship with them over social media When they eventually agreed to consider becoming a referral speed hiring is required 28 29. #5 - Require this information to ensure quality You must require these 6 pieces of information 1. The job title or req # you are referring them for 2. How / when you have assessed their work 3. Assess and then tell us about their skills and knowledge and how they are superior 4. Assess and then tell us about their cultural fit so we do not dilute our culture 5. Assure us that you have sold them to the point where they will accept an interview, if asked 6. Honestly rate them with a A+, A, or B+ 29 30. #6 - Clear expectations can limit junk referrals Set expectations before an employee refers 1.We are exclusively seeking superior individuals that will make our firm significantly better 2.Because we only want the very best we expect no more than 3 referrals per employee a month 3.Throughout the referral process we expect you to put the firms best interests first 4.Except in extraordinary cases, we do not want referrals from relatives or individuals that approached you and asked to be referred 30 31. Referral program success factors Look for people that That have skills that you dont That beat you That you learn from That you admire That can do things you cant That have answers That are future focused That see the glass as half empty 32. #7 Great referrals require education & coachingSource: Whirlpool32 33. #8 A story inventory is critical A story inventory for recruiters and employees33 34. An example - How to generate stories Microsoft Spreadthelove internal website