In this article we discuss ‘what does employee referral mean for recruitment?’. If you had to describe your friends and acquaintances, would you say that they’re nothing like you or a lot like you?
Chances are, you socialize with like-minded people. And so do your employees.
So when it’s time to recruit someone new, they can be your best source of talented candidates.
What Is An Employee Referral?
When you use employee referral, you’re actually putting your employees in the shoes of recruiters – or at the very least, sourcers.
On average, the hires you source through your existing employees are:
- 55% faster to hire (Source)
- Cheaper: if you use employee referral programs, your company could save over $3,000 per hire (Source)
- Better: 88% of employers say that referrals are their best source for above-average candidates (Source)
Referral hires really are the full package, but how can you motivate your employees to refer their friends to your company?
How to Encourage Employee Referrals
The first thing you can do is improve the experience of your existing employees at your company.
50% of your employees post about your company on social media, anyway. So if they love working at the company, they’ll still post – but they’ll post positively.
This is quite an indirect way to approach employee referrals, but it’s effective.
However, you can also encourage your employees to refer their friends by offering rewards for successful referral hires:
- Monetary incentives
- Benefits and perks
If you want to implement a full-scale employee referral program, you can do it by:
- Setting clear goals and clarifying the benefits that employees will get for successful hires
- Setting milestones for success – e.g. employees are rewarded when their friends send in applications, or they’re rewarded when their friends are hired, or when they’ve worked at the company for a certain period of time
- Sharing job openings
- Using employee advocacy tools to motivate employees to share content about the company on social media
- Measuring the effectiveness of the program
Of course, it’d be great if you could also guarantee fair treatment of the applicants who have been sourced through employee referral programs.
For example, you could interview them sooner and process their applications first.
Employee referral programs are also a great way to create your in-house candidate pool so you don’t have to go looking for candidates whenever you need to hire someone new.
This way, you can simply use your applicant tracking system to find the people who have already applied.
And when you reward your employees for it, you can bet that your retention rates are going to skyrocket.
What Can You Expect from Employee Referral?
The main thing you can expect from employee referral is faster time to hire. If you’ve got candidates at ready, it’s much easier to make an informed decision than when you need to source them in the first place.
Secondly, you could improve the quality of your hires. Since similar people socialize with one another, your best existing employees could have friends who are going to become top performers, as well.
Finally, you can expect an improved employer brand and higher retention rates.
And when your employees are happy, so will be your top management.
There you have it, this concludes our article on ‘what does employee referral mean for recruitment’. We have a number of other articles in our recruiting 101 series for you to take a look at.
Would you like to learn more about recruitment? Check out our full Recruiting 101 Series.