How to Create a Successful Employee Referral Program

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Finding, hiring and retaining high-quality caregivers can be your biggest challenge as a home care business owner. According to the “2014 Private Duty Benchmarking Study,” more and more home care businesses are utilizing an employee referral program to find new caregivers. In 2012, only 9.2% noted that employee referrals were their top recruitment source, but in 2013, that number rose to 17.9%. Referrals from your current experienced caregivers can be your greatest resource for finding new, qualified employees. If caregivers are satisfied with their jobs, they are more likely to recommend employment to their family and friends. And, in the long run, caregivers are even happier when they have good relationships with their co-workers. It’s a win-win situation for your business.

Benefit From Your Caregivers’ Large Network of Friends and Family

Think of the number of employee referrals you could get from your current caregivers. How many friends and family members could they recommend for employment? “A conservative estimate among social scientists is that most people have about 300 friends and acquaintances. Those three hundred people each know three hundred people for a total of 90,000 people who are friends of friends of employees,” says the Society for Human Resource Management (SHRM). You only have to look at Facebook, and how many friends of friends everyone has, to see that one message to those friends will spread the word quickly about a job opening within your company. Your caregivers may be able to reach even more people than some human resource services can (and at a much lower cost).

As a fringe benefit, when your caregivers spread the word about job openings, they’re also spreading the word about your company in general. And their network of friends and family becomes familiar with your services and good reputation!

Receive Qualified Candidates

With an employee referral program that offers incentives, your caregivers won’t just spread the word about a job opening, they will also work hard to refer only the best future employees to your company. “Candidates recommended by employees tend to be better qualified than others,” explains Anrea Poe for SHRM. “That’s because employees pre-screen candidates, saving HR professionals time and money. Plus, employees bring an extra level of expertise to the recruitment process that recruiting firms cannot. They give candidates the low-down on the company culture — both the good and the bad — so new recruits come in with eyes wide open.”

When employees refer their friends and family for employment, they make things easier for you, the home care business owner. They simplify your hiring process by doing a lot of the pre-screening for you.

Reduce Caregiver Turnover

employee-referral--two-women-talking-[fusion_builder_container hundred_percent=The SHRM points out that companies who encourage employee referrals notice an increase in employee retention by 25%. Employees are happier when working with friends, and they’re more likely to assist with orienting and training the new caregivers they’ve referred, offering advice on all aspects of the job. This will help new caregivers to quickly feel like an integral part of your company and become more familiar and comfortable with the job. As a result, your caregivers, both experienced and new, have a higher level of job satisfaction and are more likely to remain on the job.

Create a Formal Referral Program

With employee referrals being so beneficial to your business, don’t just leave the referral process up to chance. Aaron Marcum, CEO of Home Care Pulse and former owner of a successful home care business suggests creating a formal, organized employee referral program, where you encourage and reward caregivers for referrals. Put the program in writing and spread the word!

Encourage administrative and office staff to participate in your referral program. You may even want to expand it to include employee referrals from clients, former employees, professional contacts, etc. Let everyone who works with your business know that you appreciate referrals.

Make sure your employees know how the program works. Inform them of job openings and the minimum qualifications you expect job candidates to have. Recommend that they refer only the most qualified candidates, and motivate them by offering incentives for each referral who becomes a successful new hire and long-term employee.

Cash bonuses for referrals are a good way to motivate employees to participate in the program. Statistics from SHRM surveys show that paying cash bonuses to employees for referrals costs your company much less than an outside recruiting agency would charge to do the same job. Home Care Pulse found that 46% of home care businesses surveyed last year offered a $26 to $50 cash bonus for each referral. And 29% of them offered a $51 to $100 cash bonus per referral.Consider the cost of recruiting caregivers, the value of high-quality referrals, and your hiring budget, and offer an incentive that works for your business and is high enough to motivate employees.

business-woman-extending-hand-[400x400]You may also consider putting stipulations on when, within the hiring process, a referral bonus is paid. Is it effective to pay a bonus for a referral who quits two weeks after being hired? Some companies only pay bonuses after referrals have remained with the company for a certain period of time. When employees know this, they are more likely to recommend highly qualified candidates.

No matter what you choose to offer as an incentive, the most important factor is that you motivate employees to continue sending you referrals. Keep employees informed as to the success of their referrals, and always verbally recognize and thank employees for referrals.

Through a formal employee referral program, caregivers will be reminded of the importance of referrals and rewarded as they refer their friends and family members who become your newest, qualified caregivers. Your business will reap the benefits as your recruiting process is simplified and your caregivers’ overall job satisfaction increases![/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

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