Hiring the best people is the first and most important task to run a business.
But recruiting is not easy. Recruiters spend days or sometimes weeks sourcing and interviewing candidates to find the potential ones. But again, there must be an easy way for everything, and there is one here- the employee referral program. An employee referral program is more like word of mouth. An employee referral program allows your employees to do the recruiting work for you. They refer the candidates if they enjoy working with you. Yes, employee experience plays a key role in your employee referral program. Happy employees promote the employer brand and bring in higher-quality candidates who are likely to get hired. Let’s look at more reasons why you need to implement an employee referral program in your recruitment strategy.
Including an employee referral program in your recruiting strategy will boost the process. Let’s look at how an employee referral program makes recruiting easier and faster and five reasons why you should implement an employee referral system in your organization.
Let’s see some stats why employee referrals work:
- Referred candidates are five times more likely to be hired.
- 82% of recruiters reported that employee referrals yield the best ROI.
- Referred employees start their job sooner than candidates from other sources.
- $1,500 was the average employee referral bonus in 2020.
- Recruitment costs companies $4,129 per hire.
- Over 45% of people employed through referrals stay with the company for more than four years.
- Referred employees are 23% less likely to quit than other hires.
4 Key Reasons to Implement an Employee Referral Program
Saves Time
No one has time to waste today. Everybody wants to use their time most productively. Saving time for vital things is a major priority for any business. Employee referral program reduces the time to hire. As per Glassdoor research, the interview process in the US takes an average of 23 days, which is steadily increasing compared to the last few years. One of the most biggest of hiring through employee referral is eliminating longer screening processes and speeding up hiring.
Saves Recruiting Costs
With an employee referral program, you’re not only saving time but also costs. This strategy helps you save costs on traditional job advertising as you don’t have to pay anything for word of mouth. You can cut back on external recruiter expenses since your employees know better about the company, culture and how you treat your employees. Hence, they prefer candidates that are most suitable to your culture.
Note: Offering employee referral bonuses for successful hires is far less expensive than what you have to pay for external recruiters.
Creates an Engaged Workforce
An employee referral program is an effective way to engage your employees in a more meaningful way. Your current employees create a familiar environment for the new hires if they feel valued and treated well. They also feel a sense of accomplishment and financial boost. Moreover, new employees feel more engaged right from their first day since they already know a person in the company. Also, they’re also easy to adopt the culture.
Increases Productivity
This is in continuation to the next point. Engaged employees are most productive. Generally, it takes time and effort to boost workforce engagement. But luckily, referred employees are likely to engage with their teams faster. Hence, they become productive faster, which increases the overall productivity of the team.
Increases Employee Retention
As per the study, the best talent often comes from within internal hires or through employee referrals. Moreover, referral employees stay longer when compared to the candidates hired through other channels of social recruiting. A survey shows, more than 56% of employee referrals reported they’ve been in their current role for more than five years.
Stay Ahead in the War of Talent
Not only employee referral program helps you fill positions faster and easier, but it keeps you ahead of your competition in the war for talent. Tracking the employee referral employee program is as important as implementing it in your recruitment strategy. Currently, 63% of companies report having a documented employee referral program, and the rest have an informal referral system.
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