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career minded people discovered long ago that cultivating a wide circle of friends can reap a handsome payback in the jobs market. now employers are tapping the address books of their employees by rewarding those who talent spot on the company’s behalf. almost half of uk employers offer staff an incentive to solicit job applications from friends and associates, according to the chartered institute of personnel and development. also on the increase are alumni programmes, which encourage former employees to feed back recruitment leads and consider rejoining the company in the future. growing enthusiasm for social networking has done much to popularise personal introduction. “the market is acutely aware of the power of word of mouth,” says richard spragg, communications manager at epcglobal, an engineering recruitment specialist. “it is driven by businesses waking up to communities such as myspace and friends reunited.” tangible benefits have endeared referral programmes to employers, particularly the opportunity to cut recruitment budgets. it looks like a good outcome for both employer and the employees. xansa, a uk based outsourcing and technology business, rewards employees for introductions that result in permanent appointments. payments reflect the seniority of the recruit and range from £1,000 for clerical staff to £7,000 for client directors. “in the uk employee referrals bring in 20 per cent of our recruits at 50 per cent cost savings,” says valerie hughes d’aeth, group hr director. “in india about half come through referrals and the savings are closer to 75 per cent. referrals are hugely successful both for employers and employees.” keeping costs down isn’t the only attraction of referral and alumni hiring schemes. just as important are the benefits that flow from appointing someone who is known to share the values of the culture they are joining. “the learning curve for becoming effective is much shorter,” says richard jordan, head of employer brand at ernst young in london. not everyone is convinced that the principle of recruiting like minded colleagues is sound. one worry is that referral programmes restrict the flow of new ideas into organisations and exacerbate workplace biases, because existing staff are likely to recommend people in their own image. but if an organisation is already socially diverse and populated by open minded people, recruiting more of the same is all to the good. as the popularity of incentivised referral programmes has risen, so has the size of the inducements. a case in point is professional services firms, where bonuses can range from £2,000 for the appointment of a secretary to £10,000 for a partner. but bigger may not mean better. in fact, the reverse may be true, says richard alberg, a senior vice president at kenexa, the recruitment and retention specialists. he warns that extravagant bonuses may tempt staff to recommend names inappropriately. and, even if they are acting act in good faith, how reliable are employees as judges of who is right for a business,
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