Improve staff retention with employee referrals
Have you used want ads, employment agencies, or Web sites to find new employees who, for one reason or another, didn't work out? Numerous industry studies show that employee referral programs (ERPs) tend to yield more productive results.
So what's an ERP? It's hiring people referred by current employees. And it's effective because your employees understand your practice's needs and culture, so they tend to refer people who are a good fit.
To try an ERP at your practice, offer current team members a substantial recruiting bonus if they recommend someone you hire after a 90-day probationary period. When you're determining the amount of the bonus, consider the level of the position and the fees you would pay an employment agency. Bonus payments typically range from 2 percent to 4 percent of the job's salary. And make it clear that you'll use the same high standards and selection process to evaluate employee-referred job applicants that you do in any standard hiring process.A recent survey by Referral Networks, A New York City-based company, offers some insight into what motivates employees to make referrals. The news is good: Monetary incentives are not what drives the process. Forty-two percent of the 2,300 employees surveyed said they referred because they wanted to help a friend find a good job. Twenty-four percent of respondents said they wanted to help the company. Only twenty-four percent said they were motivated by a reward.
Estimates of employee turnover costs range greatly, depending on the costs of separation, recruitment, interviewing, and training, along with the time a new employee takes to reach his or her maximum efficiency. Besides these substantial costs, turnover also takes a huge toll on staff morale and client satisfaction. So focusing on improving staff retention with ERPs can do much more than improve your bottom line.
Are you ready to develop an employee referral program for your practice? To paraphrase Professor Frederick Reichheld, author of The Ultimate Question (Harvard Business Press, 2006), what really matters is whether your current team members would recommend your practice to their friends.
Veterinary Economics Editorial Advisory Board member Bob Levoy is the author of 222 Secrets of Hiring, Managing, and Retaining Great Employees in Healthcare Practices (Jones and Bartlett, 2007).