Companies have jumped through hoops to attract, hire, engage, and keep the best talents. They gave all sorts of recruitment strategies a go and asked all types of questions, hoping they’d bump into a proven remedy that would boost their results. Here’s a topic that’s becoming more and more popular these days: Do employee referrals work?
Spoiler alert: Yes, they most certainly do! However, if you want them to lead you toward the outcomes you’ve always wanted, there are a few steps to take and some tricks you must learn. Moreover, there’s a whole new tactic for you to check out – reaching out to a massive crowd outside your firm that will recommend expert candidates.
So, get ready. Now is the best time to explore your options & grab hold of a tested recruitment formula.
What are employee referrals?
Before we move forward and review the perks (and possible disadvantages) of this popular practice, we should talk about the basic definition of an employee referral program. In short, this term stands for an organized hiring system many companies put to use with the aim to source and hire skilled candidates – efficiently and fast. It means that employees recommend their former colleagues or friends who possess the necessary skills to join their team and get the job done. Plus, the candidates they refer are usually a great match with the company’s culture, core values, and mission. In other words: employees’ recommendations are used to fill any hiring need quickly and effectively.
Are employee referrals effective?
Guess you pretty much know the answer by now. Firms around the world have relied on referral programs to smash their recruitment targets, and for a very good reason! In fact, here are a few awesome statistics you should read if there are any dilemmas regarding this hiring tactic:
- It has the absolute highest ranking among employers and their staff; an astonishing 82% of the workforce strongly agrees and strives to promote this hiring practice,
- It yields the best and highest RoI; more than 80% of companies have placed this alternative above others,
- It’s an amazingly effective incentive; 71% of employers see referral bonuses as a powerful way to engage their teams and let them take part in important processes.
Here’s another key question: Do referred employees stay longer? Well, first of all, hires who were recommended by a colleague or peer are 350% less likely to get fired. And according to studies, 45% of them will likely stay with the company for at least four years.
A few key perks: What are the benefits of employee referrals?
The main advantage that comes to mind is usually related to finances. So yes, referrals do save money, but that’s not nearly the sole perk you’d get. In fact, there are quite a few gains that will have you wondering why you waited this long before coming up with a referral program.
First of all, you will undoubtedly cut the time to hire. According to research, more traditional recruiting methods lead to a process that lasts about 60 days. But, with reliable recommendations, you will cut this period in half. Now, aside from saving yourself lots of cash by preventing the costs of an empty seat to pile up, plus minimizing other hiring expenses, there’s another perk that’s closely related to the short & smooth recruitment process. It’s candidate experience, the ultimate ingredient to a successful company. And you’ll learn how all good brand and reputation tactics depend precisely on this factor. A
And lastly, improved quality of hire (that’s bound to happen) means better overall results, performance, and productivity. Simultaneously, it has a tremendous impact on your retention rates.
Downsides you could face: What are the disadvantages of employee referrals?
Do employee referrals work? Dang right! But still, there are a few tricky situations to beware of. Here’s an obvious threat to your company’s healthy environment – biased recommendations. Sure, whoever chose to recommend a peer for an open position must have had good intentions. But, you do remember what good intentions are used to pave, right? So, as a result, your not-so-potential hire may not be as qualified as the referrer suggested.
Now, here’s one more potentially dangerous aspect to take into account. What happens if you’ve hired a referred candidate and suddenly they choose to quit? Will the referee leave as well? That’s a risk you would be taking.
Still, there are a few proven formulas that will diminish these risks and lead to a successful referral. First of all, make sure that the person who’s about to recommend a candidate is fully aware of all the basic requirements, must-haves, and daily duties. Also, be sure to communicate the actual benefits your company plans to offer and negotiate the salary before any sort of misunderstanding pops up.
Do employee referrals work? Absolutely, but it’s up to you!
So by now, we’ve seen some fantastic benefits of an employee referral program. And we’ve also covered some negative scenarios and backlash-inducing situations that could happen. However, if you play your cards right, you will get nothing less than massive advantages – and win big time. So get ready to read a few simple and tested pieces of advice that will help you get precisely where you want.
Tested tips on how to set up a referral program
As we said – keeping everyone in the loop and being completely transparent is always the best policy. But before you do any of that, it’s paramount to be clear regarding your true needs and expectations. These things take time. Do your homework meticulously, canvass your business and its necessities, and then act accordingly. Because afterward, all you must do is follow these easy steps:
- Keep your employees informed and let them know whenever there’s a change, or as soon as you have some valuable feedback,
- Learn who your most efficient sources of referrals are and recognize their good work,
- Set up various different systems that will show appreciation to your referrers and offer them both financial and non-financial incentives,
- Find the tools that can help you simplify and speed up the whole process while helping your staff stay well-informed about their candidates and expected outcomes.
Finally, you should never be afraid to experiment. Because once you embrace new approaches, recruitment trends, and the technologies that change the staffing industry, you’ll reach your goals much faster.
Which brings us to the ultimate way to recruit & retain the best candidates in a snap – recruitment affiliate software.
Bonus piece of advice: Expand your referral program
If your objectives include cracking the code on how to hire developers easily, referrals are definitely the best way to go. Because according to the stats, more than 60% of tech talents are satisfied with their current jobs and don’t go visiting job boards aiming to find the next firm. However, they might react to a nudge from someone they trust.
But what could be even more effective than internal referrals? You can guess it – this section will be about the limitless source of qualified hires. And it’s based on external referrals. Meaning: both referrers and referees can come from any place. And that entails having a more massive talent pool than ever before. Now, let’s see how it works.
Key points about a recruitment affiliate software
Recruitment affiliate software is a unique tool that helps companies expand their teams and boost their results easily – with the help of top industry experts and seasoned recruiters. The drill is straightforward: you just have to register and fill out a few fields. The info you must offer to referrers includes a full job description with clear requirements and a bounty that you’d set. And so, once you post a job and add the necessary details, your journey towards a successful hire begins. Spoiler alert: it will feel effortless.
The perks you’ll unquestionably get include a shorter recruitment process, a bigger pool of qualified candidates, and lower costs of hire. Also, you’ll be feeling a favorable impact in the long run. Because – better retention rates, increased employee engagement and satisfaction, and the chance to be recognized as an employer of choice will undeniably follow.
Don’t ask – Do employee referrals work. Learn to make them work like magic!
Do employee referrals work? There’s no doubt about it! They’re highly efficient, cost-effective, beneficial for candidate and employee experience – and so much more! That is, if you follow the right steps and do things the way you should. And don’t forget: if you just love the amazing benefits that come from internal referrals, it’s absolutely essential to expand your ground. Imagine what it would be like if you had countless recruiters and industry professionals working on your success. Well, that’s what using recruitment affiliate software is like. So step up and stay ahead of the game!