Employee referral programs encourage a company’s employees and contacts to source potential candidates for vacancies from their own networks usually in exchange for rewards or compensation.
Candidates hired through referral programs are considered to be better performers as they tend to be pre-qualified by the referrer and better suited for specific jobs. On top of this, hiring based on referrals, reduce work load and saves time, strengthens the bond with existing employees, boosts the employer brand, turns employees into brand advocates and improves the employee retention rate.
It takes a while to create great referral programs and it all starts with developing a positive employer brand in order to establish an appealing internal and external employer image. Although it takes some effort, try making this type of hire a priority in your company, communicate this to your team and start by encouraging your employees and connections to refer people to your vacancies. You’ll soon be pleased to see how easy it can be to connect with smart, talented and innovative people, people who are the right fit for your team and environment. Moreover, you will get access to quality talent and people who are not actively seeking new opportunities but who might do when encouraged by a person they know and trust.
Start by establishing your ideal candidate’s profile and tell your employees exactly what you’re looking for in a great hire. Focus on skills like motivation, ambition, problem solving and teamwork, but also on experience and education. Explain to all of your employees the value of employee referrals and make them understand how hiring the right talent can boost their productivity and happiness at work. Then celebrate successful referrals and tell your employees how much you appreciate their efforts. Also, never forget to reward them for taking the time and effort to help you recruit qualified candidates. Some companies prefer to give away cash rewards and/or vouchers and some choose to offer other incentives like free travel or extra time off.
At Investigo, we recognise the benefits of referrals and acknowledge the fact that they usually result in the highest quality hires. Therefore, we always welcome referrals and encourage our employees and connections to recommend candidates and to encourage them to register with Investigo here. Over the years, this has helped us to take recruitment to the next level.
In case you’re still not sure if it’s worth developing an employee referral program or not, here are a few more interesting stats that might help you decide:
Referrals are 5 times more likely to be hired
65% of job openings are filled through internal movement and referrals (CareerXRoads Sources of Hire Report, 2011)
82% of companies rate employee referrals above other sources of hire for ROI (CareerBuilder’s Referral Madness, 2010)
71% of recruiters are looking to social media channels to increase referrals (Select Minds Why Optimizing Referrals is Critical Now, 2010)