Employee Referral Programs Deliver
Are you using an employee referral program yet? Listen, these days, hiring takes a team effort. With labor markets beginning to tighten again, smart employers are turning to well-run employee referral programs to attract talent. Employee referral programs can be a great way to fill open positions and identify talent that would otherwise go undiscovered by your HR department. And, employee referral programs are great way to get everyone involved in recruiting by creating incentives that promote participation. A well-organized, consistent employee referral program will not only increase your talent pool but it will promote employee engagement.
Here are five reasons for your business to start using an employee referral program if you haven’t done so yet:
1. Employee referral programs increase your talent pool.
The power of your employees’ networks should not be underestimated. There is always top talent out there that will not be reached through traditional job boards, careers sites, recruiters, etc. Your employees, however, have exclusive access to a unique network – their own friends, family, ex-coworkers and acquaintances. The Pew Internet and American Life Project found that the average American has over 634 in their overall networks (from Pew). These networks are potential treasure troves of talent that can become the currency of a well-run employee referral program.
2. Referrals are worth spending time & resources on
Any hiring manager or recruiter needs to gauge how much time they should spend on any potential hire. If a hire is a long shot and very unlikely to commit, it doesn’t make sense that a hiring manager devote all their effort towards that individual. The data on referrals shows that they are far more likely to sign on than standard hires, with an applicant-to-hire ratio of 1-3 vs. 1-18 for all other sources (from ERE.net). In addition, your hiring manager won’t even need to spend as much time on that referral to close the deal. The data points to the fastest application-to-hire time for referrals, at an average fill time of 29 days vs. 39 days for job boards.
3. Referrals will be successful hires
The data on the success of referrals does not lie either. Retention rate and hire quality both come in at the top of the spectrum for referral hires. This makes sense. Not only is your current employee vouching for the abilities of this candidate prior to hiring them, but once they are hired they now have an additional sense of ‘duty’ to live up to the potential that their friend vouched for.
4. Involve your current employees in the hiring process
Not only does involving employees in the hiring process give your HR department some extra manpower, it also fosters a team environment. If an employee feels partly responsible for landing a star player that ends up making the company more successful, that referring employee will also end up performing better as an integral part of the team. In addition, the referring employee might have already worked in the past with their referral candidate, which increases their ability to sync up and work together as a team.
5. Referral Tracking Software is at the top of its game
An employee referral program is far easier to track in today’s day and age due to employee referral technology. Instead of having a piece on a paper application for a person to write in “referred by,” the process can be smooth and efficient utilizing the latest referral tracking software.
There are standalone tools like referagig that will allow you to create job posts and share them with your employees. They can then take these posts and share them on their social media networks like Facebook and LinkedIn. Should one of their friends respond to the job, the employee is already linked to that application – making it easy to track the referrals.
There are also integrated referral tracking software systems that sync up to your company’s applicant tracking system. These referral programs are highly efficient because they leverage the power of your ATS and enable you to manage your referrals from the top level. Not only does this allow employees to leverage social networks and share job postings through social referral software, but you can ensure employees vouch for their referrals, communicate referral rewards to employees, and track all your hiring program data under one roof.
