Talent

Why ‘Talent Scouts’ Trump Traditional Employee-Referral Programs

As you know, employee-referral programs (ERPs) tend to be one of the most effective recruiting strategies available to organizations—chiefly because they expand the applicant pool, identify candidates with precisely the right skills and values, and potentially reduce recruiting costs.

Consider this example: More than 55 percent of management consulting firm Booz Allen Hamilton Inc.’s new employees come from referrals from existing employees. Those efforts generate more than 1,700 referrals each and every month, making referrals a vital link to qualified candidates it needs across the firm.

Indeed, the popularity of is ERPs unquestionable: 45 percent of 3,490 HR professionals polled say their companies heavily rely on them to encourage current employees to refer others, according to the latest data from the Society for Human Resource Management’s (SHRM) 2016 employee benefits research report. What’s more, referrals ranked as the leading source of finding the most qualified business and IT talent, SHRM found.

But as the trend grows up, the talent scout approach is fast becoming the preferred breed of employee-referral program (ERP) at more companies, as a more modern way to spark internal recruiting—without the reliance on big-volume incentives to refer potential job candidates.

A Higher Level Recruiting Machine

What it is: Basically, a talent scout program is a largely volunteer effort where qualified employees are selected to become designated scouts who recruit in their spare time. They’re chosen based on their performance and passion for the organization, their—and their access to a network of potential candidates.

How it differs and why it works: This more targeted in-house recruiting tactic differs from traditional ERPs in several key areas. For example:

Limited participation. Employees are screened and selected to ensure that the “right people” are spreading your recruiting message—it’s not open to everyone.

Formal training. While a few ERPs provide informal training to employees, designated talent scout programs share company recruiting goals and tactics with selected employees—so they’re intimately familiar with the process, tools and instructions.

Volume targets. Well-versed scouts ensure a smaller volume of higher-quality total referrals. Candidates have been more thoroughly pre-screened and pre-sold, versus ERPs, which can produce significant quantity (but not always quality) for HR to wade through.

Primary motivation. Designated talent scouts are selected because they’re motivated to build a great team for their company—they come to understand that working alongside the best people ultimately hands them and their employer better outcomes. Financial rewards for successful talent scouts can be a part of the effort, but the long-term motivation isn’t solely the money.

Remodeling Your Referrals

John Sullivan, a professor of management at San Francisco State University’s College of Business and CEO of HR consultancy Dr. John Sullivan & Associates in Pacifica, Calif., has worked with employers that want their traditional ERPs to “graduate” to talent-scout programs. In today’s Leadership Daily Advisor, we’ve collected some of his best advice for successfully tweaking your ERP foundation into talent scout strategies:

Enlist top performers in critical jobs. It’s supposed to be a selective effort; market it as a chance to join an elite group. So consider limiting enrollment to less than 25 percent of your employee population. Your aim: Target jobs that are hard to fill, require special skill sets or are in key business units.

Get in the game yourself. The CEO and other top leadership should be encouraged to join in and lend support as the organization’s “Chief Talent Scouts,” he says. Getting the “movers and shakers” in the company to support the effort will speak volumes.

In tomorrow’s Advisor, more about scouting for talent—including how to dodge the “Homer Simpsons.”

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