Leveraging the power of employee referrals in construction and manufacturing

Regardless of the industry you are recruiting for, many of the same recruitment marketing principles still apply. You need a marketing and advertising strategy that targets the right candidates followed by an efficient and effective shortlisting and selection process.

However, recruiting for construction and manufacturing presents many of its own unique challenges that can make it difficult for organisations to maintain the optimal staffing levels and remain competitive. In this article, we look at how word-of-mouth hiring and incentivised employee referrals can assist with recruiting in construction and manufacturing.

Factor in external influences

One of the things that makes construction and manufacturing so unique is its ‘boom and bust’ cycle, which reflects a range of factors including population growth, employment figures, interest rates and Australia’s overall economy. When recruiting for these roles, you need to be nimble, flexible and have the ability to anticipate your future staffing needs.

The total volume of construction activity across Australia has increased in the last two years, with a 2019 report by Master Builders Australia citing that activity nationwide is estimated to have increased by 11.4% to $220.8 billion during 2017/18. More demand translates to increase need for talent – which is why strategies such as referrals are becoming more and more important.

Attract talent through word of mouth

Word-of-mouth recruiting can often occur naturally when employees share the merits of their employer to friends, family and acquaintances. Current employees know what it’s like to work in the organisation and therefore refer people who they believe would be a good ‘fit’ for a new role. Most employees also care about their reputation so will only refer those they are interested in working with and can vouch for.

Suppliers, clients and sub-contractors also typically have a shortlist of workers who they would recommend, as do previous employees who can assist with vetting potential new hires. Most recruitment professionals also prefer to hire a candidate who not only have a quality reference, but are recommended by someone they know and trust.

Employee referrals can often mean candidates start with a better base knowledge of the position, the company and its culture because of their connection to the referring employee.

According to Susan Mayson, Associate, Australian Centre for Research in Work and Employment,“candidates are usually faster at getting up to the required standard of performance. There is evidence that employees who are good performers are likely to recommend potential recruits who are also likely to become good performers.”

Offer bonuses and incentives

More employers creating formal internal referral programs, where employees are offered financial incentives to motivate and reward those who put forward a successful referral and assist with filling job vacancies. Referral bonuses are determined by the type of position, a company’s hiring needs, and the nature of the workforce, however they often take the form of either cash incentives or other perks. Some organisations also offer an initial bonus and then a series of additional bonuses if the new recruit stays in the organisation, which motivates the employee to assist the new hire to succeed.

Disadvantages to be wary of!

Word-of-mouth hiring does have some disadvantages, including limiting the number of considered applicants you can consider and potentially reducing workforce diversity. Which is why it’s important to develop a formal recruitment referral program, keeping things like diversity in mind, which is transparent and grants all existing employees the chance to participate. You should also make it clear that recruitment referrals don’t automatically result in appointment – policies and procedures still need to be followed to ensure the right candidate is employed for the job.

To find out more about tailoring a recruitment strategy for your business, call us on 1300 366 573 or email info@employmentoffice.com.au.