Why Employee Referrals Are the Best Way to Source Candidates
Finding ideal candidates is always difficult for recruiters, especially when the sheer volume of candidates in the job market makes it tough to filter the quality candidates from the rest. Remote work has made it harder to justify the time, effort, and resources that go into hiring great candidates.
Employee referrals are the most reliable, available, and underutilized source of candidates for recruiters. HR teams can leverage their connections with current employees and get them to suggest worthy candidates. Your employees can help you reach the most relevant candidates in a fraction of the time and at a fraction of the cost of other candidate-sourcing channels.
During the early stages of a company’s life — and even at later stages — employee referrals offer the best channel for getting the talent you need to grow your company. Employees can refer candidates with ease by simply logging in to the employee portal on an ATS like Freshteam. Employee referrals are considered such a lucrative sourcing channel because they come with a number of advantages:
1. Referrals Reduce Time to Hire
According to HR Technologist, referrals are 55 percent faster to hire.
Employee referrals provide immediate access to talent since they are sourced through the personal connections of your employees. This cuts from the hiring process a lot of time that would otherwise be spent on the sourcing and screening cycles, coordination, negotiation, etc.
2. Referrals Improve Quality of Hire
A large part of the global workforce is made of passive candidates. Even with the recent shift in the job market that has increased the volume of candidates looking for a job, the top talent in most industries is often already employed in great and secure jobs. This means they might not be actively looking for opportunities, though they may be open to considering new roles. Referrals are a great way to reach such candidates. Since your employees are already wholly aware of your vision, mission, culture, and atmosphere, they can spread the word about why people should consider working for your company.
A LinkedIn study holds that referrals are the No. 1 way through which people discover jobs.
3. Referrals Reduce Cost per Hire
Referrals reduce cost per hire because of various reasons:
- Your employees partner with you to source candidates.
- Referrals make the initial screening easier.
- The time to hire is reduced, meaning all costs associated with the process are also reduced.
- Job advertising costs are cut.
4. Referrals Boost Retention Rates
Referrals give your new hires the chance to understand your company from an employee’s point of view before they even start working for you. That means referrals know what they are signing up for. They have friends in the company who can help them settle in quickly, reducing attrition and boosting retention. It’s also true that employees who are willing to refer their connections have faith in the company and are likely to stay longer. In a sense, your referral program can be an employee satisfaction check, too.
5. Referrals Can Give Your Hiring Team a Helping Hand
When you are scaling or trying to fill positions that are hard to fill, you could always use an extra pair of hands working alongside you. Employee referrals are a perfect go-to channel when you don’t want to expand your hiring team just for a season.
6. Referrals Attract Culture Fits
Referrals also make it easy to attract people who fit in with the culture. Referred candidates already know someone in the company and are familiar with what the culture is like, which means those referrals are more likely to be people who are drawn to the culture in the first place.
7. Referrals Promote Your Employer Brand
No amount of Glassdoor reviews or culture videos can match up to the words of someone who works in the company. When your employees reach out to friends and family to invite them to pursue open roles, they also equip their connections to become potential brand advocates.
8. Referrals Help Attract Prospective Customers
When your employees build awareness of your brand among their connections, they’re not just tapping potential candidates — they’re also creating prospective customers. Your employees’ connections might vouch for your organization in the companies they work for, leading to positive word of mouth for your brand in larger circles.
Before you hire through referrals, make sure you have your sourcing basics right. Watch out for common pitfalls that can come with sourcing candidates through referrals, and don’t depend on referrals as the only source of talent. If you don’t want diversity to take a hit, you should stick to the standard hiring process and provide timely updates to candidates so you don’t leave them hanging, even if it means rejecting candidates gracefully.
Freshteam by Freshworks is a smart ATS that comes with a built-in referral portal for your employees where they can access all open jobs in one place. Build a robust referral system with Freshteam, which offers efficiency and transparency in tracking the status of referrals. Freshteam also allows you to automate screening for referred candidates with pre-set criteria. It provides control over the whole recruitment process from a single dashboard and helps recruiters source, screen, interview, and hire the best candidates with ease. It has helped transform how numerous businesses recruit. You can check it out for free here.
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