Employee referral is an internal recruitment method employed by organizations to identify potential candidates from their existing employees' social networks. An employee referral scheme encourages a company's existing employees to select and recruit the suitable candidates from their social networks. As a reward, the employer typically pays the referring employee a referral bonus. Recruiting candidates using employee referral is widely acknowledged as being the most cost effective and efficient recruitment method to recruit candidates and as such, employers of all sizes, across all industries are trying to increases the volumes they recruit through this channel.
Process and Procedure:
The entire manpower requirement will be notified companywide through the website, notice board and email in a prescribed format except in case of special manpower requirement that may be confidential in nature.
Employee shall not refer any of their near relations for the assigned post.
It shall be prerogative of the HR Dept to scrutinize the profile and accept or reject profile, if it doesn't match to the job requirement/ position.
HR Dept shall clearly record the name of the employee who has referred the candidate, along with date and other details.
In case same candidate / profile are referred by two or more employees, the profile received first by the HR Dept shall be considered valid. It may be noted that the decision by the HR Dept / VP / Head - HR shall be final and binding and no questions whatsoever shall be entertained.
The scheme shall not be applicable to employees posted to HR Department.
Payment Procedure:
Employee sponsoring a successful candidate shall be paid an amount of 30% of one month salary (CTC) of the new employee for each reference made and resulting into recruitment.
The payment shall be effected only after three months of the candidate joining the Company.
In case of the selected candidate leaving the organization within three months of joining; no payment shall be made to the employee who had referred the candidate.
The payment of incentive shall be made through the concerned employee's salary.
In case of any dispute or issues, the decision of the VP / Head - HR shall be final and binding to all the parties.
1. Employees don't see recruitment as a high priority. Their own daily business priorities capture their attention. Thus, human resource departments need to create devices to encourage participation.
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2. Employees have difficulty matching job requirements against the talents of their friends and associates. For instance, an employee may know her friend works in data processing, but she doesn't know if he qualifies for the posted position "MIS Network Specialist IV." This difficulty in matching talents to vacancies prevents referrals. To overcome this obstacle, employees need to know who can give them information about a position's requirements.
3. Employees make faulty assumptions about the interest level of friends and associates. Referrals normally don't come unless a friend explicitly states interest in seeking a new job. However, many will explore a "better opportunity," even if not actively looking for one. Therefore, employees need to get the message: "Refer good people; it is not necessary to judge if they are keenly interested right now."
In the past seven years, Vanguard Resource Group Inc. has examined the practices of organizations that report 30 percent or more of their vacancies filled through employee referrals. These organizations credit the following six best practices:
Public recognition of successful referrals
Prompt bonus rewards.
Regular promotional incentives
Converting the program from a passive to a proactive tool
Employees have difficulty matching job requirements against the talents of their friends and associates. For instance, an employee may know her friend works in data processing, but she doesn't know if he qualifies for the posted position "MIS Network Specialist IV." This difficulty in matching talents to vacancies prevents referrals. To overcome this obstacle, employees need to know who can give them information about a position's requirements.