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Automate employee referrals tracking to get better candidates faster

Automating the employee referral process can not only reduce manual labor for the HR department, it can also result in better hires, faster.

Medical devices are highly specialized products that require equally select individuals to design, sell and implement the equipment. For Boston Scientific, a global company headquartered in Natick, Massachusetts, sourcing the necessary talent -- college graduates with some medical field or device experience -- requires connections into a rich talent pool.

David Boykin, talent acquisition specialist, said hiring for these positions can be challenging. "Candidates are typically harder to find because they may already be in a role somewhere and not necessarily looking for a job."

To increase recruitment success, Boston Scientific relies heavily on employee referrals, which Boykin said ranks as the most important source for finding talent outside the organization.

In addition to finding people who aren't actively looking for new opportunities, employee referrals often result in better candidates because employees won't likely refer someone who they feel might make a bad impression, Boykin said. "As a result, you often find candidates who you can onboard more quickly and who know something about your company's culture because of the person who referred them," he said.

But managing employee referrals can be tricky for large organizations like Boston Scientific, which has a total head count of approximately 23,000 people worldwide. That's why having a formal process and automated tracking tools in place is important. "We hire thousands of candidates. If we didn't have a process in place we'd lose track of referrals," Boykin said.

However, some aspects of the pre- and post-hiring process still require manual intervention by the human resources staff, he said.

Employee referrals on the rise

Boston Scientific isn't the only organization that closely ties talent acquisition to an employee referral program. Research by Brandon Hall Group, a human capital management research and advisory firm based in Delray Beach, Florida, found that 51% of organizations consider employee referrals highly effective for talent acquisition.

And employee referrals may become even more important in the future. Hiring managers and other executives said jobs are as hard to fill this year as they were last year, and will become even more difficult in 2015, according to a survey released earlier this year by ERE.

Money Crashers, a personal finance website based in Denver, added five new hires so far this year for a total of 30 writers and editors. Employee referrals reduced the time needed for recruiting these individuals.

"Our current staff members generally know the types of folks we are looking for," said Andrew Schrage, editor-in-chief. "Since our business is online, a lot of our recruiting and interviewing is done remotely, so it takes a good bit of time to research and talk with candidates. A lot of that is eliminated when we're considering a hire through an employee referral."

Referred employees also tend to stay with the company longer. "Utilizing an employee referral program can bring down your turnover rate, if that's an issue," he added.

Track referrals automatically through ATS systems

To reap similar benefits, Boston Scientific uses a commercial applicant tracking system (ATS) with a built-in employee referral program that keeps tabs on the financial incentives paid to employees when referrals become new hires. The best tracking systems also gather important statistics, such as how long new hires stay with the company. "You want to make sure the process is worth the effort you're putting into it," Boykin said.

But automated referral programs and the support infrastructure don't eliminate every manual task. For example, candidates might not identify the colleague that referred them when they meet with the recruiting staff. "You don't want to penalize the employee by not paying the bonus in those cases," Boykin said.

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To guard against such glitches, all internal tips at Boston Scientific go through the application tracking system's referral module, which generates an email telling recruiters about candidates to contact.

Another problem arises when applicants identify themselves as referrals but are ineligible for the program because they're already in the system from past communications with the company. "Even with our system there's still some manual tracking that's required," Boykin said.

Organizations must also take steps to ensure they're drawing from a sufficiently diverse talent pool, said Boykin. "Typically, people refer people who are like themselves, so if you don't have a diverse workforce you may not have a diverse employee referral pipeline," Boykin said. "If you focus too much on internal promotions and employee referrals, you may not be looking closely enough at other sources of talent."

Ultimately, employee referral success requires a clear up-front strategy that identifies the organization's hiring goals and the best resources for achieving them.

"If want to incentivize employees for making referrals, a formal program makes sense," Boykin said. "If that's the case, integrate it as much as possible into your applicant tracking system. But if you're a small company or you are not doing a lot of hiring, it may not make sense to invest in a tracking tool that ends up costing more than the payoff from the program itself."

Either way, as the competition for skilled candidates increases, insider information will remain one of the best resources for outside talent.

About the author:
Alan Joch is a New Hampshire-based freelance writer who specializes in enterprise applications and cloud computing. Follow him on Twitter @alanallegro.

This was last published in May 2014

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