Employee referrals are powerful. Research shows getting a referral from a current employee to be cheaper, faster, and more likely to produce a higher qualified candidate. They, in turn, ultimately reduce the turnover rate at your firm.
A strong employee referral program (ERP) allows you to turn your employees into your own personal recruiting firm. When you have so many different people working toward the same goal, it improves job satisfaction and empowers participating members.
What makes the candidates your employees refer such strong candidates? And why should you utilize your employee’s networks for your company’s gain? Let’s take a look at why employee referrals make the best hires.
A Referral Is A Faster Hire
In a study done by JobVite it was found that a referred candidate takes 29 days, on average, to be hired. Compare that to the 39 days it takes to hire from a job posting or 55 days for someone brought in by a career site, and you’re saving a significant amount of time and productivity.
You also save yourself, and human resources the hassle of drafting, approving, and posting job postings. You also don’t have to wade through countless resumes or conduct multiple candidate screenings.
An employee referral saves you a lot of traditional recruiting costs. You don’t have to worry about outsourcing to a job board or career site to find qualified candidates if your employees are bringing them to you. You also save on internal costs and time, as a lot of the pre screening is done inherently by your referring employee. If you’ve properly designed your ERP and incentivize employees who bring in rockstar talent, they are going to be more likely to only refer strong, qualified applicants.
A new hire brought in by a current candidate often feels more comfortable, faster. They already “have a friend on the inside” that they can turn to with questions or concerns as needed. They are also more likely to be familiar with the company culture, given their relationship with a current employee. Additionally, they already have a high opinion of your firm, so getting them up to speed in training could be a smoother ride that someone completely new to every aspect of your company.
Retention, Retention, Retention!
Employee-referred candidates are generally higher-quality and more qualified than a candidate brought in at random by more traditional recruiting efforts. They already know more about your firm than a complete stranger and probably know more about the position than a job posting may divulge. Because of this, employee referrals traditionally stick around. In another study done my JobVite it was found that 46 percent of referred hires were still employed at least one year after their hire date. This is significantly higher than the 33 percent brought in through career sites and 22 percent hired through job boards.
Another benefit you may not have considered is the impact it has on current employee retention rate. If one of your employees brings in a trusted friend or business associate on referral, they are more likely to stick around. By empowering your employees to help build your workforce with friends and colleges their propensity to stay loyal to your firm only increases over time.
The Bottom Line
Employee referrals save time, money, and only work to strengthen your corporate culture and workforce. They also empower current employees and ensure that you are interviewing only the most qualified candidates.