Help Wanted: References Fill Jobs And Pockets

Even though millions of Americans are looking for work, many employers say it's too hard to find good help. So, many companies and organizations are encouraging employees to be on the lookout for talent and are offering cash bonuses for referrals that lead to a hire.

Employee referral programs can be found in all kinds of industries, from technology to finance and manufacturing to health care.

"We've had great success with it," says Jennifer Richards, the administrative director of human resources at the Virginia Mason Medical Center in Seattle.

In the past two years, Virginia Mason, one of Seattle's major health care providers, has hired a lot of people through its referral program including nurses, medical assistants, patient care technicians, managers and IT professionals, Richards says.

Networking Leads To A Job

Poorva Virginkar is a recent hire. A few months ago, she contacted a fellow University of Michigan graduate who works at the medical center.

Virginkar wasn't really looking for a job — just information — when she emailed Jolynn Suko, who oversees some performance improvement programs at Virginia Mason. The two women didn't know each other. But Suko says they hit it off instantly.

Suko says Virginkar asked great questions about the workplace environment and the corporate culture and conveyed a self-awareness that made her think, "This is somebody that we should really look at and talk to more."

She referred Virginkar to the hiring managers. Suko says her motivation wasn't money. In fact, she had forgotten about her employer's referral bonuses, which range from $700 to $2,000. Rather, Suko had a feeling — reinforced by a phone call to someone they had both worked with — that Virginkar was someone who would be an asset to the organization.

Confidence In A Hire

Hiring managers say when they extend an offer to someone who's been referred, they often feel more confident that they know what they are getting.

"I think one of the things that we get by bringing on board somebody who's known by one of our staff members is we have already begun to establish an element of trust," says Mary Pirnke, a nurse and a recruiting supervisor at the medical center.

New employees often feel more comfortable, too.

For example, when Virginkar started work, she felt like she already had an ally. The very first email she got was from Suko welcoming her to the medical center team.

"Let me know how I can help you in any way," Suko wrote. "And let's get coffee."

It's no secret that when new employees feel connected to an organization, they often perform better. Employees who make referrals also feel good because someone valued their opinion.

Picking The Right Person

Many of America's largest employers have referral programs. John Sullivan, a management professor at San Francisco State University, says that's the case for about 85 percent of Fortune 100 companies.

"If your company's not doing a lot of hiring, it's critical that you get the right people for those few positions — and employee referrals just [turn] out to be the best method to do that," he says.

Some observers worry that relying on employees to find talent can lead to a lack of diversity in the workplace. But Sullivan dismisses that idea; he suggests that a well-conceived and executed recruiting program can avert any potential problems.

Sullivan says there's evidence that referred employees are often the very best hires a company makes, adding that they tend to stay longer and get fired far less often than individuals hired through other means.

There's still another reason employers like these programs: They cost less than many other forms of recruiting. And because referred employees tend to stay on the job longer, employers save money on future recruiting efforts.