Problems with employee referrals (Toughest HR question)

How to properly use the workforce as a recruitment agency
By Brian Kreissl
|Canadian HR Reporter|Last Updated: 10/01/2010

Question: I’ve heard about some issues associated with using employee referral programs as a way of sourcing candidates for recruitment. What are some of these problems and how can they be overcome?

Answer: With the war for talent set to resume as the economy improves, employee referral programs are poised to become even more popular as organizations ramp up recruitment activities. Employers that use innovative means of sourcing talent in a tight labour market are at an advantage when it comes to finding candidates who aren’t necessarily pounding the pavement looking for work.

Employee referral programs usually pay a bonus to an employee who recommends someone — typically a friend, relative or former colleague — for a position at an organization. These programs can be a highly effective means of sourcing candidates for a number of reasons: