The two biggest staffing/HR problems business owners and managers face are recruiting new employees and reducing employee turnover. These issues both are linked.

The only way to reduce the high costs of employee turnover is to hire to a higher standard. But, when your best source of recruits is mostly unemployed people just looking for work, how can you possibly hire the best?

Recruiting quality, frontline, hourly employees is only going to get tougher. Unemployment is edging downward. The trends indicate a greater demand for workers who can be supplied because of baby boomer retirements and the declining growth rate of the working-age population. Six of the 12 major urban areas tracked by labor statisticians are reporting shortages of unskilled, entry-level, frontline workers.

Those are just some of the reasons why it’s time to reassess your recruiting strategies and tools. Here are some suggestions:

Fish are where the fish are

Professional recruiters proactively go after the people they want and they know these folks can been found one place and one place only: among the gainfully employed.

Print a recruiting message on the back of your business card and, during the course of your day-to-day interactions, give one to every person who gives you good service or demonstrates a strong work ethic. Ask your employees, family and friends to pass them out, too. This is a great way to build a database of prequalified folks you can call when you have a job opening.

Former employees

When good employees leave to work elsewhere, they often discover that the grass isn’t greener after all. In fact, research shows that 20 to 25 percent of supervisory and managerial employees have gone back to work at a company they once left.

Imagine if 20 percent of all the good people who ever left came back to work for you! You’d have instantaneously productive workers, requiring little or no training, and little or no downtime to become familiar with the organization.

All you have to do is ask. About a month after someone good leaves, just call and ask if they would consider coming back. The worst they can say is “no.” Former employees can be valuable sources of referrals. If they say “no”, simply ask, “Do you know anyone else who might fit our organization who you would recommend to us?”

Whenever another employer calls you for a reference on a former, good employee, you’ve just been tipped off that your ex-employee is looking for work again. It’s the perfect time to call and see if they’d consider coming back.

Employee referrals

The next best source of recruits is referrals from all the good people who work for you now.

Research shows that employee-referred candidates are three times more likely to be a good match for the job because your employees give these candidates much more detailed information about the job requirements and working conditions than you would. As a result, candidates are only likely to proceed with the selection process if they feel they will be a good fit. Referral candidates are also much less likely to quit or be fired within the first few months.

The key is to continuously let your employees know that you need good people and what you’re looking for. If you don’t already have one, consider implementing a referral incentive or bonus program for employee referrals. While many employers do this already, they get no bang for their buck because they put the reward in the employee’s paycheck rather than making it a celebration. The bonus or gift should be awarded in public with a great deal of fanfare and enthusiasm.

The other big mistake is to hinge payment of the award to the new hire’s length-of-service (usually after 90 days of employment). Behavior that you want repeated needs to be rewarded immediately. You don’t pay for classified ads and job boards 90 days after they result in a new hire, so why would you penalize your people for delivering self-selected, quality applicants? (When you put the reward off to a future date, you’re also telling everyone you are not sure if you made a good hiring decision.)

Whenever an employee gives you a lead, be sure to ask: “Is this a referral or a recommendation?”

Add excitement and momentum to your referral program by giving employees a choice between cash and a day off with pay, or make it a game (a drawing from a variety of prizes, a “wheel of fortune” or a departmental contest). The idea is to keep interest alive by making it fun and a win/win situation for you, your people and your new hires.

Employers-of-choice (companies people are clamoring to work for) all have these four things in common: low employee turnover, higher productivity, higher customer satisfaction ratings and the fact that 35 percent or more of their new hires come from employee referrals.

Refine your recruiting strategies and elevate your hiring standards. Don’t hire people just because they are available and you need someone yesterday. Proactively go after and hire the people you want—the best.