[LTR] Any organization that has recently been through the recruitment and selection of a new employee, knows full well that competition for staff at all levels is creating more and more challenges. After all, when employees are fully satisfied in their current job, it will take a good deal of persuasion to entice them to examine the potential of a new opportunity.

On the other hand, there are also a good number of potential candidates who are simply "window shopping." In other words, these individuals are looking around for new opportunities but are not committed to any one direction. Not only that, in my experience, this type of candidate is often not very self aware. They don't really understand what motivates them or what elements of a job provide personal satisfaction. This signals a red flag of danger for an employer because "window shoppers" often don't stay very long in one job; they are only marginally satisfied and are always looking for new opportunities.

Today's job market is also facing skill shortages, particularly in the areas of accounting, finance and information technology. These roles are quickly becoming "hot jobs" which will drive up the salaries and force employers to be more creative in both recruitment and retention. Past experience has shown that an employee's market will create situations where organizations begin to offer large signing and retention bonuses and if an employee is approached with another job offer, the organization will quickly counter this in order to entice the employee to stay.

When we are in the situation of an "employee's job market", it requires very specific strategies to discovering candidates who fit the skill need and who would be willing to move to the new opportunity. One such strategy is the employee referral program. Formal employee referral programs do much more than simply asking "do you know anyone?" Managers need to put some structure to the program, it needs to be effectively communicated, and you need to apply metrics to the program in order to assess success.

Start by assessing what program elements would entice your employees to refer potential candidates. Many employers offer some sort of monetary bonus such as $500 to $1,000 per hire but only if the candidate stays for a specified period, say six months or more. The referral bonus could be paid out over this period of time starting with a partial payment after the probationary period is completed. There is no reason why you can't be very creative in terms of your reward offerings. While some companies might offer free consumer goods to the referring employee, why not consider additional vacation time in exchange?

On the other hand, employers need to be very, very clear in their explanation of the specific selection criteria. You need to be looking for more than just friend relationships, you need to focus on quality candidates and ensuring you are hiring the right employee with the right skills. Once a candidate is identified, they need to be screened and vetted by your recruitment professionals the same as all other candidates.

An employee referral program can have a number of benefits. These include being introduced to a candidate who may have a better natural fit with the cultural work environment and/or having the ability to become productive more quickly. Employee referral programs also are known to reduce the pipeline of "unqualified" candidates, they can boost employee morale, create higher new hire success rates and reduce turnover.

Taking the route of using an employee referral program to source out potential candidates cannot be taken lightly. Failing to respond to employee referrals, delaying the hiring process and demonstrating poor treatment of the referred candidates will quickly sabotage any of your efforts and doom your program in no time. As well, some organizations fail to make their program inclusive such that only certain employee groups are allowed to make referrals. Those who are left out, typically HR professionals and the management team might become disgruntled over time. You also need to put some system in place to ensure that referrals are truly referrals rather than a case where a candidate simply approached your employee. And as with all programs, if an employee referral program is not continually refreshed, it will soon lose its luster and will eventually be ineffective.

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