Bersin - ERP Programs

8/6/2019 Bersin - ERP Programs

1/7

BERSIN & ASSOCIATES 2009

BERSIN & ASSOCIATES

Research Bulletin | 2009

Introduction

In an eort to strengthen talent acquisition strategies in todays slowingeconomy, companies are prioritizing employee reerral programs (ERP).

Studies conducted over the past ive years consistently recognize ERPs

as the most eective approach to attaining quality candidates. A strong

employee reerral program will enable companies to decrease turnover,

reduce costs and improve productivity. In todays economy, ERPs are a vita

tool or attracting new talent while, at the same time, engaging existing

talent within the organization.

Historically, employers aced with limited talent acquisition budgets

become more selective about their hiring choices and the methods they

use to identiy top perormers. In March 2002, a study by SHRM (Society

o Human Resource Management) reported that 80 percent o companie

identiied ERPs as more cost-eective than third-party recruitment irms

and 70 percent o respondents elt these were more cost-eective than

other recruiting practices. The same logic exists during todays recession.

As recruitment slows down and resources become scarce, companies (like

AST Corporation) are increasing ERP activities to ill 50 percent o their

hiring needs, a dramatic increase rom 7 percent in 2007.2

Source: Employee Reerral Programs Survey, Society o Human Resource Management,

March 2002.

2 Source: www.ere.net/discussions.

January 7, 2009 Volume 4, Issue 2

BERSIN & ASSOCIATES, LLC

64 LA SALLE AVENUE

SUITE 47

OAKLAND, CA 946

(50) 654-8500

[email protected]

WWW.BERSIN.COM

Employee Referral Programsin Todays Economy

About the Author

Madeline Laurano,

Principal Analyst

Licensed for the exclusive use of Steve Bonomo of adidas Group - Not for distribution
http://www.ere.net/discussionshttp://www.ere.net/discussions


2/7


BERSIN & ASSOCIATES



64 LA SALLE AVENUE

SUITE 47

OAKLAND, CA 946

(50) 654-8500

[email protected]

WWW.BERSIN.COM

BERSIN & ASSOCIATES



Employee Referral Programs in Todays EconomyMadeline Laurano | Page 2

In addition to reducing costs, ERPs boost employee morale and improve

retention by engaging existing employees in the hiring process. By

recognizing and educating employees on current talent needs, best-

practice companies can strengthen their companies brands. Tivo,or example, revamped its recruitment strategy in 2007 to ocus on

employer branding and identiy candidates based on cultural it rather

than speciic skills sets. As a result, ERPs are now responsible or 33

percent o the companys new hires and this is expected to increase

in 2009. An eective ERP will allow talent acquisition departments to

take a greater role in the strategic direction o the company, including

employer branding and developing existing talent.

Although an ERP program seems like a straightorward solution to

shave costs and lower attrition rates in todays economy, companiesshould not act blindly when implementing an ERP program. Many

employee reerral programs ail due to:

A lack o employee participation;

Exclusion o senior management; and,

An inability to measure the results.

Fortunately, these challenges should not deter companies rom

initiating an ERP. Best-practice companies struggling in todays economy

achieve results when educating and recognizing employees and

measuring the results. When developing an ERP, it is important to

remember that one size does not it all; companies need to identiy

their unique hiring needs and tailor their plans accordingly.

Creating Awareness

Best-practice companies improve eiciency by creating awareness or

their employee reerral programs, both internally and externally. Within

organizations, education on company culture and overall recruitment

goals is imperative or companies looking to increase employee

participation. Employees need to act as recruiters when identiying

candidates and salespeople when speaking to their companys strengths

and dierentiators. Without adequate training, employees are more

likely to recommend unemployed, unqualiied riends and amily

members particularly in todays tumultuous economy. An employee

In addition to reducing

costs, ERPs boost

employee morale and

improve retention

by engaging existing

employees in the

hiring process.

K EY PO INT

Best-practice companies

improve efciency by

creating awareness

or their employee

reerral programs,

both internally and

externally.

BEST PRACTICE



3/7


BERSIN & ASSOCIATES



64 LA SALLE AVENUE

SUITE 47

OAKLAND, CA 946

(50) 654-8500

[email protected]

WWW.BERSIN.COM

BERSIN & ASSOCIATES




at a large technology company was recently looking or ormer Yahoo!

employees to ill an ERP request, rather than thinking strategically

about the right it or his / her organization. By making ERPs

transparent, employees will think proactively and turn to a broadernetwork o individuals, including previous coworkers and classmates.

Employee buy-in is a challenge or many companies during a recession.

A study by Reerral Networks in 200 indicated that individuals were

not participating or the ollowing reasons3:

Do not know anyone suitable or the positions 78 percent;

Araid the reerral will relect badly on them i the candidate does

not work out 42 percent; and,

Process is too much o a hassle 2 percent.

As a result, many best-practice companies look outside their

organizations at vendors, alumni and trustworthy partners to reer

candidates. One way companies motivate employees today is through

an oicial launch o their ERPs, including announcements, emails and

oice posters.

Companies can also create awareness and encourage employee

participation by automating the employee reerral process. BAE Systems

is one example o a company that advertises its ERP on its company

website. Under the title Operation Eagle Eye, BAE Systems aligns its

ERP to the company culture, including an option to send the reerral

to riends and a link to learn more about the program. The company

relies on its employees to act as its best spotters by including the

ollowing message,

Simply recommend stand-out candidates to us:

Friends, family members, colleagues, acquaintances,

anyone you think may make an outstanding addition

to the BAE Systems team.

Although including the program on a companys website creates

visibility, one challenge is the decision to make this program password-

3 Source: Reerral Networks / Peopleclick, November, 200.

Many best-practice

companies look

outside their

organizations at

vendors, alumni and

trustworthy partners

to reer candidates.

BEST PRACTICE



4/7


BERSIN & ASSOCIATES



64 LA SALLE AVENUE

SUITE 47

OAKLAND, CA 946

(50) 654-8500

[email protected]

WWW.BERSIN.COM

BERSIN & ASSOCIATES




protected to include individuals outside o the organization.

Some companies address this issue by posting the inormation on

the companys intranet through which only employees can access

inormation about the program. In this capacity, ERP inormationneeds to be more interactive, and allow employees to have input in the

process possibly through video and chat. Companies will generate little

interest i the only ERP inormation available is a downloadable orm.

Employees will need to have an option to send inormation to reerrals

to increase participation, as well as track the source o hire in the

companys applicant tracking system (ATS).

When increasing awareness and employee participation, companies

need to make sure they are not cannibalizing their diversity

programs by inbreeding their organizations with the same typeo job candidates. AmTrust, or example, avoided this problem

by implementing training and education on hiring goals, and by

encouraging diversity in the workorce. AmTrust had increased

ERP eorts to an impressive 80 percent in 2008, as compared with

28 percent a ew years ago. I a company is looking to redeine its

company culture, employee reerrals need to be orward-thinking and

include both employees and trustworthy individuals rom outside the

organization. BAE Systems is one example o a company that includes

We encourage diversity on its ERP page.

Recognition

Bonuses are a necessary component o any employee reerral

program. Companies need to consider the job level, the bonus range

and rewards. Unortunately, there is no standard or ormal process or

determining these variables. Companies need to deine their own ERP

programs and bonus structures based on their individual companys

culture, available resources and individual hiring needs. The average

range or bonuses is $500 to $4,000, depending on job position. As

one example, Prospera Credit Union in Canada oers $500 to part-

time employees, $,000 to ull-time employees and $,500 to those in

management positions. Recognition is critical when engaging employees

in this process. Just as companies compensate third-party recruiters or

identiying talent, companies must reward their own workorces with

appropriate incentives.

Companies will

generate little interest

i the only ERP

inormation available is

a downloadable orm.

K EY PO INT

Companies need to

defne their own ERP

programs and bonus

structures based

on their individual

companys culture,

available resources and

individual hiring needs.

K EY PO INT



5/7


BERSIN & ASSOCIATES



64 LA SALLE AVENUE

SUITE 47

OAKLAND, CA 946

(50) 654-8500

[email protected]

WWW.BERSIN.COM

BERSIN & ASSOCIATES




As companies look to streamline recruitment costs, additional ERP

bonuses may not be realistic or many companies. In a recession,

companies need to consider a mixture o both monetary and non-

monetary incentives. In 200, or instance, Intel sparked interest in itsERP program through travel vouchers and home entertainment systems.

Today, companies are oering other signs o appreciation, such as

lunches, oice parties, announcements and banners. Some companies

oer a gesture o gratitude upront (such as a git certiicate) and

deliver the remainder o the bonus ater six months. The goal o an

employee ERP bonus should be to motivate the workorce, while

recognizing the eorts and contributions to the company.

When recognizing employees, ERP bonuses should not discriminate

against various employees but, rather, include every employee romexecutive level to administrative. Hard Rock Ca, or example, oers

opportunities or both salaried and hourly workers. By increasing

bonuses rom $2,000 to $3,000 or managers who completed 2

weeks o training, the Hard Rock Ca noticed a signiicant spike in its

employee reerral program. Some companies even oer extra bonuses

or diverse candidates as a way to oster a diversiied workorce.

Measuring Results

When investing time and energy in creating awareness, and enlistingand recognizing employees or ERP, very ew companies evaluate

the results. An eective ERP should measure a combination o job

perormance and early attrition rates o the new hires. Unortunately,

the majority o companies do not recognize the importance o

tracking perormance back to the source o hire. When individuals

are recommended or a job and visit the companys website to apply,

ew candidates identiy their sources as reerral. In act, some HR

technologies do not oer reerral as an option. Without adequately

tracking source o hire, awareness and participation in the program will

ultimately decline.

Companies also look or metrics when seeking support rom their senior

management teams. Recruiters at the MGM Mirage, or instance, are

hoping to increase unding or their ERP but currently do not have an

eective ROI tool to show eiciency and productivity. Companies that

The goal o an

employee ERP bonus

should be to motivate

the workorce, while

recognizing the eorts

and contributions to

the company.

K EY PO INT

An eective ERP

should measure a

combination o job

perormance and early

attrition rates o the

new hires.

K EY PO INT



6/7


BERSIN & ASSOCIATES



64 LA SALLE AVENUE

SUITE 47

OAKLAND, CA 946

(50) 654-8500

[email protected]

WWW.BERSIN.COM

BERSIN & ASSOCIATES




take the time to measure job perormance and early attrition rates (and

track these key perormance indicators) will be able to draw a straight

line to the results o their employee reerral programs.

Conclusion

Employee reerral programs are the de-acto method or attaining

top talent in a slowing economy. An eective ERP will bridge the gap

between recruitment and retention. These provide companies with

a cost-eective recruiting method that enlists and engages current

employees. Best-practice companies are able to create awareness,

reward their workorces and measure the results o their ERPs. These

programs ail when companies:

Ignore diversity initiatives;

Do not gain support rom senior management; and,

Neglect to educate their employees.

As companies scramble over the next ew years to build competitive

workorces and improve productivity, ERPs oer a reliable and eective

strategy or identiying quality talent.

An eective ERP

will bridge the gap

between recruitment

and retention.

ANALYSIS



7/7


BERSIN & ASSOCIATES



6114 LA SALLE AVENUE

SUITE 417

OAKLAND, CA 94611

(510) 654-8500

[email protected]

WWW.BERSIN.COM

BERSIN & ASSOCIATES


The Bersin & AssociatesMembership Program

This document is part of the Bersin & Associates Research Library. Our

research is provided exclusively to organizational members of the Bersin

& Associates Research Program. Member organizations have access to

the largest library of learning and talent management related researchavailable. In addition, members also receive a variety of products and

services to enable talent-related transformation within their

organizations, including:

Research Access to an extensive selection of research reports,

such as methodologies, process models and frameworks, and

comprehensive industry studies and case studies;

Benchmarking These services cover a wide spectrum of HR and

L&D metrics, customized by industry and company size;

Tools Comprehensive tools for benchmarking, selection and

implementation, and measurement;

Analyst Support Via telephone or email, our advisory services are

supported by expert industry analysts who conduct our research;

Strategic Advisory Services Expert support for

custom-tailored projects;

Member Forums A place where you can connect with other

peers and industry leaders to discuss and learn about the latest

industry trends and best practices; and,

IMPACT Conference: The Business Of Talent Attendance at

special sessions of our annual, best-practices IMPACT conference.

For more information about our membership program, please visit us at

www.bersin.com/membership.


http://www.bersin.com/membershiphttp://www.bersin.com/membership

Documents

Bersin - ERP Programs