8 Reasons why Employee Referrals are the best way to hire

Employee referrals are clearly the best way to hire quality talent. Talent that is excited to join and stay. I know you think we are probably biased. You are right. We are biased and for good reason. 

In fact, here are 8 good reasons why we are biased: 

• Retention and Culture fit

 Employees through referrals score significantly higher on retention & culture fit. If you can encourage employee referrals in the right manner, it is practically possible for you to get on a downward spiral of attrition. Existing employees stay longer due to increased referral payouts. Your recruiting spend can now be diverted to better employee engagement activities and drive more goodwill.

 

• Speed of hiring

 Referral programs that are done right lead to a 12% improved offer to join ratio and lesser joining no-shows (<2%). The time to close a position is known to be least in employee referrals. This means it takes me less effort to get to shortlist, interview, hire and close a candidate. Isn't that sweet?

 

• Lower cost per hire 

 Employee referral is more cost-efficient compared to other sourcing channels. Employee referral payouts are significantly lesser than external recruiting agency payouts.  

 

• Improved Diversity

 Referrals are an excellent underrated source to drive diversity hiring. Your existing employees are part of a big network outside your workplace, which will have people coming from varied backgrounds and possessing different skills. 

 

 

• Scale skill combos automatically

 Your employees understand skill combos and hiring for them is easily scalable. Employees are unlikely to refer to somebody who has used an ERP system for an ERP developer position. Relevance is hard to get. Most job portals fail in providing relevant profiles and that honestly is heartburn.

 

• Build proprietary sourcing channels 

 Job boards and vendors present the same candidates to many organizations. Referrals are proprietary. Your employees help you identify and reach quality talent that is passive, eager to join and stay. 

 

• Strong Employer Brand

 Employee advocacy builds a stronger brand where people exist - WhatsApp. Employees that refer successfully feel more attached to the organization and become brand advocates to the external world.

 

• Happier Employees

 Employees want to help their friends and the program distributes wealth within the organization. When new hires join the organization, they have somebody on day 1 to go to lunch with. This means that if you have a friend looking out for you, you are likely to find out what to do and more importantly, what NOT to do. The chances of your hire succeeding and staying with the company increase as a result.

 

We are big believers in Employee Referrals as a sourcing channel. What benefits do you strongly identify with based on your organization's employee referral program? Let us know your thoughts and comments below.