Exploring Employee Referral Programs: Big Talent Pool, Short Timeframe
When it comes to sourcing candidates, a solid employee referral program (ERP) is one of the most effective places to start. Jobvite discovered that implementing a strong employee referral program in its recruiting process increased employee satisfaction; it also found that 46 percent of employees hired via referral stay for more than a year, 45 percent stay beyond two years, and 47 percent stay for more than three years. With numbers like these, it makes sense for all employers to explore ERPs more thoroughly.
Shorter Recruitment Process
Recruiting processes conducted via career sites can take up to 45 days; job boards recruit within approximately 39 days. An effective ERP, on the other hand, can fill a position in roughly 29 days. Sixty-nine percent of recruiters using employee referrals to hire candidates say recruiting through this process takes less time, and an additional 51 percent say it’s more cost-effective. Referrals simply move through the system more quickly, often because hiring manager can pre-approve candidates and recruiters can bypass agency fees and/or expensive postings.
Larger Talent Pools
By asking a team of 75 employees for contacts of potential candidates — assuming each employee has a handful of friends, family members, and acquaintances to refer — recruiters can quickly find 11,250 new candidates. This is specific math from specific companies, but studies show that referrals expose companies to more qualified talent –and talent that’s more likely to stick around — than other, costlier methods.
Likely Positions to Recruit
Some positions have a higher likelihood of hiring via employee referral than others. Highly skilled positions may be harder to fill using ERPs, simply because candidates for these positions are already scarce. On the other hand, positions in marketing, sales, HR, and design can be quite easy to recruit for via ERPs. Furthermore, applicants referred for sales positions are twice as likely to be hired than those who have been referred for engineering positions.
Cash reward is the top incentive for motivating employees to participate in ERPs, but it’s also important to praise employees for taking part in the recruitment process, regardless of the outcome. Whether the candidate(s) referred by an employee successfully make it onto the team or not, employers should reward participating employees with company lunches, monetary rewards, or social praise. Employees are more likely to engage in the referral process when offered cash rewards between $2,500 and $5,000 — far less than the cost of using an agency recruiter.
Giving employees something to be proud of will increase their engagement in the process. Here are a few tips on creating an engaging work environment:
- Create a compelling site.
- Make participation simple for higher sign-up rates.
- Develop interesting job descriptions to grab the attention of those candidates who are being referred.
- Recognize employees who engage in the process. Doing so will ensure future engagement.
- Use gamification to boost participation.
- Give participating employees feedback to help improve future referral results.
One in five candidates referred by employees are hired. Referrals also offer the most productive diversity hires. Employe-referred candidates tend to be better fits for a company because these candidates have been vetted by current employees and are more likely to understand the way the company works.
Many employees tend to stay away from ERPs for fear that their candidates won’t respond to hiring managers, but implementing the above tactics can help ensure higher participation rates and high-quality referrals.
Get started with employee referrals today and watch your recruiting and retention rates skyrocket!