Recruiting the top talent in your industry is an important hiring priority no matter the position you’re looking to fill. One of the best ways to attract qualified candidates is to ask people who already work for you who they would recommend.
After all, your current employees know your company culture and the demands of your work environment. Creating an employee referral program is an effective way to improve recruiting success and build employee engagement.
How Do Employee Referral Programs Work?
Employee referral programs reward an organization’s employees for referring professionals they know for open jobs. Collecting referrals is a simple process. You simply:
- Let employees know that you’re accepting referrals for an open job.
- Ask job applicants to name the person who referred them to the job.
- Ask employees to turn in a paper or electronic form indicating the name of the person they referred.
If you hire someone referred by an employee, you award that employee with an incentive.
How Employee Referrals Bolster Recruiting Efforts
Employee referrals are a proven way to attract high-caliber candidates to your organization. Individuals working for your company understand the skills, personality, and experience necessary to thrive in your work environment. When you use a referral program, you’ll reap benefits regarding candidate quality, hiring speed, and retention.
Attract High-Quality Candidates
Your organization might have a lot to offer to job candidates, but it’s not possible to communicate everything that’s great about your company in a job listing. Current employees can do more than just speak to the details of the position — they can describe to a job candidate what makes your workplace unique. Candidates who know someone who works for your company and loves their job are more likely to join your team than candidates whose only impression of your company comes from interviews and info provided by HR.
Speed Up Time-to-Fill for Open Positions
Does filling open positions always take longer than you’d like? Employee referrals are a great way to speed up time-to-fill because you don’t have to wait for qualified candidates to see your job ad or search for a position on your website. Employees can tell qualified professionals about jobs as soon as they become available, cutting down significantly on overall recruitment time.
Increase Employee Engagement & Retention
Employees want to feel invested in your workplace. Launching a referral program is a way of showing that you trust their judgment and want to collaborate on an essential company function. A referral program can boost employee engagement without significant cost investments.
Hiring candidates who have been referred by current employees is also a great way to increase retention. Your employees know how well others would fit into your corporate culture. They can refer candidates who are a great fit for what you do, which helps increase new-hire retention.
How to Make an Employee Referral Program Work
Employee referral programs aren’t difficult to run. After all, you simply need to track who made referrals and note when a referred candidate is hired. For your program to be successful, though, you need to incentivize employees to make referrals in the first place.
Some organizations prefer to offer cash bonuses for successful referrals. Other employers offer different incentives, including:
- Paid time off
- Tickets to concerts and other local events
- Gift certificates for retailers, restaurants, and entertainment outlets
- Donations to a charity of the employee’s choice
- Material goods such as electronics, bikes, etc.
Measuring the Success of Your Referral Program
You’ve started a referral program, but how do you know if it’s successful? It’s essential to track recruitment metrics. Compare metrics for positions you hired via referral versus positions hired from traditional job ads. Some of the metrics you can compare include:
- Time to hire
- Cost per hire
- Quality of hire
- Turnover rates for new hires
MRINetwork has been a leader in the world of recruitment for 55 years. To learn more about how we can help with employee referral programs and other recruitment needs, connect with us online.