On average, it takes 55 days to hire new candidates from job sites or 39 days through a job posting, meanwhile it only takes 29 days to hire a candidate through an employee referral program. More than time saving, hired employees through referral will also stay at their job longer than a traditional hire, a clean indication of higher quality. Jobvite study found 46 percent of referred hires stay for at least one year after they were hired, which was far above the 33 percent of those hired through career sites and 22 percent hired through job boards.
Referred candidates are also cheaper to hire than a traditional candidate. Firstly, these candidates do not need traditional recruiting costs to source them as your employees refer them directly to you. They are also typically faster to hire, thus you can spend less on internal labour costs. For example, a typical agency charges a fee of 20 percent of a hire’s first year salary, that could be $20,000 for a single $100,000 hire. If you give your employee a $2,000 referral bonus for successfully recommending a new hire, that is a $18,000 savings for you.
Looking at the aforementioned data, an employee referral program can be considered as one of the best ways to recruit new talents. This is a program that is employee-driven wherein current team members act as “hunters” for like-minded talents that will thrive in the organisation. Finding top talents by way of traditional recruitment process oftentimes show less favorable results. In efforts to find the right talents to urgently fill up open positions, hiring managers can now look at employee referral programs to be included in their recruitment process.
True enough that this seemingly informal method can prove effective in bringing in numbers of qualified hires. Instances show that this program, with properly laid out mechanics, can beat even popular career recruiting sites or job boards. That is why to most companies, this program is now formally integrated to maximize the efforts and complement the traditional recruitment process.
In order to commission the help of your current employees, here are a few tips to make your employee referral program work:
Everything with a clear goal and objective will give a satisfactory result – same goes to this program. Give your employees a big picture of how having the right talents in the company can help achieve the business goal that will benefit everyone – on a personal and corporate level. Bringing in the right talents will mean better overall productivity, less stress for everyone working on a project, more out-of-the-box ideas and source of ingenuity – everything that will help catapult the company forward.
Communication is important in making this program successful, and with over a hundred or thousand employees it would be hard to effectively monitor employee referrals at the right time that it needs. At best, it would take an expensive system just to keep the monitoring and communication going. Some organisations are taking advantage of a cloud system where employees can easily log in their referrals anytime, anywhere and monitor its recruitment progress along with any due incentives.
More and more organisations are vouching for their recruitment success using social media. When job posts are announced through social media, qualified talents “raise their hands” to be considered and move into action to bring their curriculum vitae in front of the recruiter. This process amounts to savings on company resources.
You might be underestimating your existing talents that actually show some signs that they fit well for the current open positions. Looking into your human resource for any employees interested in moving up to a challenging position is both economical and convenient. While employees look to grow in their career, they prefer to experience that in the company they already work with than move out and start somewhere else. Let your employees refer coworkers that they know are qualified for the new job and you will be surprised at how many are up for it.
Your employees joining the program will agree to make efforts in looking for the right candidates for the open jobs. They will somehow pre-qualify an applicant for you because their incentive will be success-based. Your employees can bring in the numbers and quality of hires that you require and naturally employers should reward them in their efforts in lieu of the amount of time and money they helped save the company. Incentives need not be grandiose. Gift certificates, small cash incentive, a better office parking slot, or dinner reservations will do well to show your appreciation.
HR professionals are usually required to create and manage employee referral programs. They are needed to assist and select the best one to fill vacant positions. The job of HR team include, but not limited to the following: