Employee Referral Program : Pros And Cons

By Author: Savio Vadakkan
Total Articles: 58
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Employee referral programs (ERP) are gaining popularity in today’s business recruitment scenario. It is proving to be a very cost effective tool when it comes to recruitment. Organizations motivate their employees through various employee referral engagement activities to leverage their social capital and assist in the sourcing of the right candidate.

However, just as every coin has two sides, there is a positive as well as a flipside to the employee referral programs.

Pros of ERP

Not just employees, but the right employees best suited to an organization can help it grow and attain its objectives. Who better than an existing employee can know this fact. In a frantic bid of retaining the human capital and increasing this wealth, companies make use of social recruiting and leave no stone unturned to be on the winning end of this bid. Sourcing potential employees through employee referral programs have several benefits as stated under:

• The process of recruitment is handled efficiently and most likely to bear fruitful results
• It is a time and cost effective means of getting the right candidate
...
... • Speeds up in the recruitment process
• The candidate is assumed to be quality driven
• Reduction in attrition rate
• Cultural bonding is ensured
• Results can be tracked easily
• Improves employee motivation since such employee referral and social recruiting programs are often associated with rewards

The employee referral programs relieve the human resource personnel’s from the most time consuming task, that is, the initial process of finding potential candidates. However, there are certain drawbacks attached to this effective recruitment tool as well.
Cons of ERP

A successful employee referral engagement programwould depend completely upon its modality, its implementation and process thereon. This is where it gets tough! The importance of employee referral solutions should be engrained in the employees as much as it is with the human resource personnel’s in the organization. It is not an easy task to acquire the same level of dedication and commitment from the employees towards successful recruitment. The cons would consist of:

• The employee referral programs can lead to favoritism, partiality and employee discrimination
• Affects organization diversity
• A mismanaged reward policy system will lead to employee dissatisfaction
• A manual ERP mechanism reduces employee participation thus impacting the referral program

However, the pitfalls in the employee referral programs can be easily rectified by using efficient employee referral tools that help in generating a transparent and just process. Employees should be motivated by the organization to continue their endeavor in sourcing the right candidates by leveraging their social circles.

With directed efforts towards the promotion of the employee referral programs the cons can be suppressed to a negligible level.

Author Bio :

Savio Vadakkan is the Marketing Professional at ZALP, a unique employee referrals booster. ZALP helps organizations tap the full potential of their employee referral program & employee referral engagement using advanced social media integration, social recruiting and interesting features like gamification.