Building a successful employee referral program was one thing. Sustaining that success during the last year has been a much different story.
AmTrust Bank grew its employee referral program from 28% of hires in 2006 to 78% in fiscal 2008. We did this by being creative, having a lot of fun, and implementing some top notch best practices. In March 2008 we were honored with the ERE Recruiting Excellence Award for Most Innovative Employee Referral Program, and I had the opportunity to author an article for the Journal of Corporate Recruiting Leadership about our success.
Then, things got tough. In April 2008 we had the first significant across-the-board reduction in force in our 120 year history, recruiting volumes dropped dramatically, and expenses were being scrutinized like never before.
No surprise when discussions hinted at dropping our payout for employee referrals and stopping the program outright. We reminded people why we had made such a strategic commitment to this source: employee referral hires stay longer, perform better, and cost less than hires from other sources.
That being said, we knew that we would have to make significant changes to our program to ride out the storm of the current economic situation and maintain program momentum through the eventual upturn. We needed a way to maintain the business results while downplaying the optics of the program expense during a time when expenses were being dramatically reduced.
We quickly dropped our aggressive, in-your-face, promotional focus with our employees. Our macro strategy of “give us all of your employee referrals” quickly gave way to a micro plan of requesting employee referrals for specific open jobs. This allowed us to keep the candidate flow we needed, maintain employee satisfaction with our ability to execute on the referrals, and maintained positive relationships with those being referred in to the organization.
We stuck with the core of our original program: we contact all qualified referrals within 72 hours, our employees have online access to status updates on their referrals, and we maintained our payouts to our employees for successful hires. Recently, we started paying $100 for referrals to fill temporary mortgage underwriter positions, a critical need with the growth in mortgage volume.
We dropped our monthly prizes for participation and the annual grand prize, and toned down the “fun” aspect of the program. The focus really became one of business necessity: we need great people, we need your help, and sourcing talent this way is cost effective for the organization.
I am pleased to say that as we begin the second half of our fiscal year, we are hiring well over 70% of our employees through referrals, and expect that as the year continues we will maintain the positive momentum. Although the first couple years of this program were admittedly a lot more fun, this year has been even more rewarding as we prove the ability to sustain the success of our program, even during these crazy economic times.
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