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Employee Referrals – An Overlooked Hiring Resource

How to Generate More Employee Referrals to Increase Hiring in Healthcare
Artur Szczybylo/123RF.com

In a tight talent market, healthcare recruiters are looking for every possible avenue to source candidates, but they often overlook an excellent source right in their midst – employee referrals. Your best employees likely have a network of like-minded, similarly situated friends and associates among their peers. Tapping into these networks could create an invaluable candidate pipeline for today and the future.

Whether you’re hopeful physicians or maintenance staff participate in a referral program, consider that good workers tend to gravitate to their ilk. Slackers don’t often run in the same circles as achievers. Whatever level of staff member you’re hoping to source, the top talent within your institution likely knows someone similar to themselves who could fill the bill.

Existing employees will have a vested interest in a new hire they suggest. Their reputation is aligned with the success of the referral. It’s in their interest to offer a candidate who will be a good match and a long-term hire. They’ll likely take an interest and the initiative to assure the person they referred is successful in the work and adapts well to the culture of the facility.

Employee referrals by the numbers

Referrals are growing as a resource. Statistically, one in five is hired. A significant benefit of using employee referrals is culture fit. Employees are not likely to recommend a friend or colleague they think will fail, nor will they recommend someone they don’t think will be a good fit for the institution. For diversity and inclusion initiatives, referrals are the number one source for hiring a diverse workforce.

When asked what recruitment source generates the highest return on investment, 82% of employers say referrals. Employee referrals can also reduce time to hire – in some cases referred candidates are hired 55% faster than other sourced job seekers.

Many institutions balance the cost of recruitment in comparison to the outlay for internal referrals and find they’re fairly similar, but there’s more value in employee referrals. Compared to sourcing applicants through career sites, retention rates are higher: 46% of referred employees make it to their one year mark versus 33% of other applicants. After two years, 45% of referrals are still on the job.

Creating an internal referral program

An internal referral program can be as formal or informal as you’d like. A structured program could compensate staff members for referrals based on anticipated wages. An example would be employees earn 5% of the lowest salary in the range for the position hired.

An administrative assistant that referred another hired for a vacancy in the  $35,000.00 to $37,000.00 range would earn $1,750.00.  A physician who referred another hired at $250,000.00 to $275,000.00 range would earn $12,500.00. You might defer from creating a payment structure that details the specific wages offered to protect the privacy of the new hire.

Another consideration for a structured program is longevity. Many institutions make referral payments quarterly: paying out one-fourth of the referral bonus earned as the new hire hits the 90 day, 6 month, 9 month and one year milestones. Still another incentive for existing employees help the referral assimilate into the organization.

Leveraging employee networks

Your staff is networked personally and professionally through a variety of sources: alumni, associations, conferences they attend, personal and professional social media. In addition to having an eye open for friends and colleagues that are actively looking for work, existing employees can leverage their networks to reach out to passive talent. They can let a friend or colleague who might not be actively looking to make a change know there’s an opening at your facility. A strong recommendation from a trusted associate may prompt talent that wasn’t interested in making a move to look at what you have to offer.

Creating brand ambassadors

Finally, who better to recruit for your facility than the employees that make it great? Institutions should never miss an opportunity to boost their brand in the marketplace. When existing employees are promoting your facility to others as a top employment destination, your institutional reputation is elevated. That kind of brand enhancement is beneficial to healthcare providers, no matter how large or small their facility.

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About Riia O'Donnell

Riia O’Donnell has over 20 year’s hands-on experience in all aspects of the Human Resource function. Beginning as a recruiter, she grew to lead in all areas of HR, including employee training and development, legal compliance, benefits administration, compensation evaluation, and staff management. She has been a contributing writer for a wealth of HR, training, and small business websites for the past 7 years. Connect with Riia on Twitter at @RiiaOD.