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HCMWorks Insights

How to Create and Manage a Contingent Workforce Referral Program

Posted by Julia Fournier on 20 Oct 2020

Temporary and contingent workers are traditionally sourced through staffing agencies, but, with a growing skills gap making it increasingly difficult for organizations to access top talent, companies are starting to look outside of the traditional channels to procure non-permanent workers.

The best contingent workforce management programs now use a blend of staffing vendors and internal hiring processes to acquire talented and highly-skilled workers. These in-house hiring methods include building talent pools, direct sourcing and many other approaches.

Another method your company can use to increase access to the best contingent workers is through an employee referral program. In this blog we’re going to take a look at what exactly an employee referral program is, and how your organization can implement one.

What is an employee referral program? 

An employee referral program is a formal program that an employer has created to encourage its employees (and contingent workers) to refer candidates for open positions. In this case, your employees will be referring workers for temporary positions in your company’s contingent workforce.

The program works by promoting the scheme to workers and giving them an easy way to send referrals to hiring managers - this could be done through either a paper or online referral system. It’s possible to target specific workers who you know have strong networks with talented individuals in your industry, or perhaps have previously worked at a competitor. 

In many cases, a bonus can be earned by a worker if a referred candidate is hired.

Why you should consider developing an employee referral program

An employee referral program benefits both the employer and the worker. Since workers receive a reward for their referral, an employee referral program can improve worker satisfaction, make workers feel valued by your business and increase their loyalty to your company.

Meanwhile, referral candidates are generally the best hires for your organization, since employees typically only refer candidates who are a good fit for a specific position, have a strong work ethic and match your company’s values. Not only that, but it gives you another contingent worker procurement stream outside of staffing agencies - increasing your access to top talent.

With that in mind, how can your organization benefit from an employee referral program? We’ve listed some of the top reasons here:

  • Faster time-to-hire
  • Better access to the top talent in your industry
  • Cost savings on your contingent workforce talent acquisition budget
  • Happier workers who feel more valued by your company
  • And many other benefits!

How to build you employee referral program

Building a successful employee referral program that truly saves your organization time and money isn’t as simple as telling your workers that you are looking for candidates for open contingent positions and then offering a bonus if you refer someone. 

Your employee referral program needs to be strategic. You need to create objectives for your program, make use of technology to ensure complete workforce visibility, and develop a way to analyze the performance of your referred workers.

Here are some of the top things to keep in mind when building your employee referral program:

Position your company as an “employer of choice”: To receive truly great referral candidates, it’s essential that your existing employees and contingent workers are delighted with working for your business. The happier they are, the better your referral candidates will be. To ensure that’s the case, you need to position your organization as an “employer of choice”. You can read our blog, 5 Tips to Become an “Employer of Choice” for Contingent Workers, for more advice. 

Make sure you invest in an MSP or VMS to successfully manage your contingent workforce: When creating your employee referral program, it’s crucial that it is centralized and uniform across your entire organization. If not, different managers across different departments will be going rogue from your organization’s hiring policies - paying differing rates for temporary workers. This lack of control over temporary workers results in absurdly high spend and no visibility into worker performance. Engaging a managed services provider (MSP) or using a vendor management system (VMS) can solve those issues. 

Want to learn more about building an employee referral program, or simply want to enquire about managing your contingent workforce? Contact HCMWorks today. Our team of contingent workforce management experts would love to help.

HCMWorks Case Study on talent acquisition

Tags: Contingent Workforce Management

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