Jessica Miller-Merrell | , , ,| By
In the recruiting and talent retention industry, referrals are known as one of the most powerful corporate recruiting tools. Experts like Dr. John Sullivan have conducted research on hundreds of companies that utilize an effective employee referral system. His research has found that well-managed employee referral programs can produce a high volume of quality candidates who have a better understanding of the corporate culture and position requirements. Referral programs offer a lower recruiting cost per candidate option as well as statistically resulting in lower turnover.
I myself, have benefited from an effective employee referral program. Throughout the year, employee referrals have resulted in over 40% of hires and at a much higher rate of employee retention. What is important in managing a successful program is through proper marketing and promotion of the referral program to your current employees, quick payment, and allowing for referrals outside of the traditional system and incorporating referrals from chance meetings while candidates are demonstrating their skills and abilities. Some of my best candidates have been from chance meetings at the grocery check out, at a networking event, or soccer tournament. Never miss an opportunity for an employee to positively promote your company no matter where or what the circumstance.
New Twist on Employee Referrals
A relatively new Atlanta-based company, Bonus Box offers a new twist on employee referral programs. Their website, www.bonusbox.com is still in Beta and marries job search matching techonology with a job seeker referral program. The job search matching technology is some of the best in the industry and boasts over three years of research. Prospective candidates are asked a series of questions and then matched to positions based on the company’s culture, job skills, requirements, and qualifications. Candidates within the Bonus Box database are then emailed a list of open positions that fit their match specifications.
The company works on the same premise as traditional employee referrals programs in that candidates have qualified friends or connections within their network that are also in the job market. These candidates have a better understanding of company expectations and culture. Bonus Box relies on social networking connections and word of mouth advertising to fill open positions and build their candidate database.
Bonus Box pays the candidate based on a pay for performance systems the following ways:
- Candidates are paid $500 by Bonus Box if they are hired for a position from the Bonus Box jobs database. The candidate is responsible for notifying Bonus Box when they have been hired for a position advertised on their website.
- Candidates are paid $100 when they refer a friend that is hired for a position listed on Bonus Box. This is also paid on the honor system by notifying Bonus Box.
For companies, the price to advertise the position with Bonus Box is free. Companies only pay $900 if the position is filled as a result of Bonus Box. Businesses who subscribe to Bonus Box also have the ability to mine the candidate database free of charge and only pay if positions are filled with a candidate from the website. Bonus Box will also advertise your open position using the internet, specifically, social media platforms to drive candidates to your open position and to the hundreds of others they have posted.
One of the obvious challenges, Bonus Box will face as they begin to grow and build their candidate database is that their business model works purely on the hope that candidates will notify them if and when they are hired for a position from a Bonus Box job listing. Resumes within the candidate database are watermarked with the Bonus Box logo and but can easily be added to a recruiter’s own database and thus hard to track. I don’t anticipate recruiters knocking down the company’s door with $900 in hand for a candidate they minded months ago and filled for a completely different open position.