82% of employers rate employee referrals above all other candidate referral sources for the best return on investment, according to CareerBuilder. 88% of employers rated employee referrals as the best source for the generation of high-quality new hires.
These are impressive statistics and quite telling.
If you’re saving money and building your workforce with only the most qualified people, you are going to have a competitive advantage. Employee Referral Programs (ERPs) increase the credibility of your talent pool and grant your company access to a unique, higher-quality network.
To illustrate this point, let’s look at this from a different angle. Consider your own personal purchasing decisions. Do you ask for friend, family, and coworker recommendations? An ERP is the same concept.
A modern ERP can tap into everyone that your organization knows to not only get more referrals but to also gather insight that could help your organization make better hiring decisions. With a larger pool and better decisions being made, you’ll have a stronger workforce, which will only further progress your company in the face of competition.
So, how can you ensure that your ERP is running efficiently enough to give you that competitive edge? Here are a few ways to check.
Track and Measure
In the CareerBuilder study mentioned above, only about half of employers are using a tracking system to measure the effectiveness of the leads brought in by their ERP. However, only 23% of those respondents had confidence in their tracking method.
Although certainly less expensive than more traditional recruitment methods an ERP still has costs associated with its effectiveness. It is crucial that you track results in order to gauge what works and what doesn’t. By tracking and managing the ERP leads that convert to hires you can see who is contributing most. It can also give you key insight in getting other employees active. This overall group effect will impact your bottom line, thus increasing overall effectiveness of your firm.
Keep Them Coming
Successful referrals breed more successful referrals. According to the American Journal of Sociology, referred workers are more likely to refer candidates that end up getting hired. While it is true that not every employee referral will lead to a hire, a smoothly running ERP will help build a generous pool of qualified applicants from which to pull for future positions. By keeping your employees actively engaged you will never have a recruiting crisis. You will never have to worry about positions remaining open for long periods of time taxing current employees to pull more than their weight in times your firm may find itself understaffed. Keeping quality candidates coming in keeps positions filled which only gives you an advantage over your potentially struggling competitors.
Imagine having the ability to use technology to comb through your employees’ social connections to make relevant recommendations about your open positions. With advancements in technology, you will need to make sure your ERP keeps up. The firms that will thrive are the ones that adapt and embrace new ways of connecting their current workforce with potential new talent.
Social media sites like Facebook can give your company more room to get creative in executing your ERP. Social networking allows for a more personalized touch and by leveraging the relationships built online you will have access to stronger referrals and a regular stream of incoming rockstar talent.
The Bottom Line
Making sure you are measuring the effectiveness of your ERP will only help you to further strengthen it. With a strong and effective ERP you will bring in stronger and better-qualified candidates strengthening your workforce. By using the latest technological advances available you put the power in your employees hands to get your company running and smoothly and efficiently as possible. With all of these key pieces in place you will find yourself with a real competitive advantage.