Are you looking for fresh talent in your industry or the best player for a particular role? Who better to recommend the ideal candidate than someone who knows your business inside out?
Someone who knows the field, and who’s killing it. Someone who’d be a great fit as a teammate. Someone who would sit happily as part of your company brand and culture.
That’s why employee referrals are becoming bigger news than ever for employers and their recruitment teams.
We’re going to look at the benefits of employee referral programs and why recruiters should be utilizing them as part of their hiring process.
Faster hiring times
Studies have shown that employee referrals reduce the hiring time, on average, by 40%. If there’s a big hole in your team that needs filling, you want that seat occupied and your operation back to full speed as soon as possible.
Employee referrals have an average hiring time of 29 days. Candidates coming from job boards and career websites are placed within 39 and 55 days, respectively. That’s at least a full week faster. How much work do you think one person can get through in a week? That’s how much more valuable your referral hire is over traditional sources.
Better employee retention
It’s accepted that candidates entering a business via referral have had a level of insight into the company that a candidate applying to an advert wouldn’t have had. Better educated and prepared for what’s coming, a referred employee stays far longer in their new position than those who weren’t so well primed.
The numbers? 46% of referrals stay with their new job over a year. That figure doesn’t drop during the second and third years, either. When it comes to more traditional hires from the job boards, the numbers drop to around 14% in the third year. That’s roughly a 30% difference.
It provides a steady source of qualified candidates
Your employees know just what’s needed for the role in question. They know that any referral who isn’t right for the job is a black mark on their record and reputation. You can guarantee that anyone they recommend will not only be qualified for the job but a great fit for the company.
This can happen within every department of a business. Employee referrals supply some of the best-fit applicants for every position. It’s not only an ideal option for those that create your product or provides your service, but for every open position, you need filling.
Having a direct line to those with the relevant skillsets is a valuable commodity.
More passive and diverse candidate selections
Some of the best possible candidates for your role won’t even be looking for a new job. They’re probably quite happy where they are, but that doesn’t mean they can’t be tempted away.
Your employees will reach out to previously unreachable candidates, vouching for your workplace culture, and answering the all-important questions of how your company succeeds where their existing employer lets them down.
Passive candidates tend to be higher caliber than any other hire. Employee referrals also tend to provide far more diverse candidates than typical recruitment avenues. Diversity increases creativity. And creativity helps a business to thrive.
High conversion rates
If you want to streamline your interviewing and hiring process, employee referrals will help with that. While they currently provide only 7% of potential candidates, the referred candidates have much more of what the employer is looking for, and their conversion to employment rate is as high as 40%.
That figure alone suggests just how much better qualified and suited to the suggested roles they are. With this figure in mind, recruiters should be utilizing referrals to create a more efficient hiring process.
Creating a better cultural fit
Today’s society places a considerable amount of importance in our work/life balance. Happiness and fulfillment at work are just as relevant in today’s workforce as remuneration.
Hiring teams regularly struggle to judge who will fit and who won’t. You could never learn as much about a person during an interview than if you’d known that person for several months or years.
Only one out of ten businesses are happy with how they decide who is going to be a good fit for their business. It’s no surprise this is such a concern, seeing how 90% of bad hires are down to a poor cultural fit.
Qualification and experience count for a lot, but not everything.
An employee referral program can significantly improve this important figure, creating a much more efficient process for your recruiters. Outstanding company culture creates happier, more productive staff, as well as lowering turnover. It shows just how important this part of the recruiting process is.
It’s better for your budget
The average traditional hire in the US is thought to be around $4,000. The figure includes assessments, sourcing, background checks, agency fees, advertising, interviewing, and more.
If your business regularly recruits, and for multiple positions, it’s no surprise that wherever those costs can be cut, it’s going to be music to its accounting department’s ears. Even when offering financial incentives as part of an employee referral program, there are still significant savings to be made.
Your employees become your biggest advocates and boost your brand
Your employees can make or break your brand’s reputation. A happy employee will boost and lift your company profile. An unhappy worker will drag it down into the mire.
If an employee is trying to engage a candidate, the last thing they’re going to do is talk the businesses down. An employee referral program will encourage employees to talk up the advantages of working for the company.
Are you doing enough to promote employee referrals?
You should be starting to see the many benefits of employee referral programs if you hadn’t already. How you choose to implement yours is up to you. Get creative, or rely on tried and tested methods; it’s your choice. But you should be engaging in one—one way or another.
It will save you time and money, raise the quality of your brand and product, and create a happier environment at every level of your workforce.