Employee Referral Program
Human capital is one of the most valuable assets that any company has. This is why most companies put in place strategies to ensure that they improve the quality of hire during the recruitment process. One of the best ways to attract talent is through an employee referral program. Simply put, this is a structured and organized recruitment method in which current employees are encouraged and rewarded, through employee referral bonus, for recommending candidates for open positions. Unlike sourcing, this internal method taps into the existing networks of employees to find and hire the best talent.
As much as companies can use an employee referral program flyer to receive recommendations, it remains important to recruit and keep top talent. Qualified employees are likely to have better and quick learning ability, bring in new energy, show a different level of expertise, ensure increased time management and show better management skills within colleagues. By choosing candidates who are a good fit for open positions, you will make it easier to run and grow the company. There are several companies that managers can turn to when looking for the perfect employee referral example. Pure Insurance, software application company Buffer, online marketplace for freelance services Fiverr and the cloud-based software company Salesforce have used this program to help build better teams and grow their respective brands.
Employee referral stats you should know
Research shows that employee referral programs have a high return on investment. Managers and executives should explore employee referral program ideas that will help them find and hire top talent. However, there should be clear employee referral program guidelines to ensure transparency and help the HR department find the best fit.
- New hires sourced via referral programs produce 25% more profit for their companies than new employees sourced through other means.
- Referrals have been found to be the number one most productive source for diversity hires.
- 70% of employers said that referred hires fit the company culture and values faster and better than those hired from other sources.
- Hiring a referred candidate is faster, helping to cut time to hire by about 40%.
- Employee referral programs help to increase your employee retention. In fact, 46% of referred hires retained for a minimum of one year after they were hired.
- Applicants hired from referrals have been found to start their new positions an average 10 days faster than their counterparts from other sources of hire.
Based on these statistics, the benefits of employee referral programs are clear. Such programs make the hiring process faster and cheaper, help boost productivity, increase employee loyalty and retention and promote seamless processes in the workplace. Borrowing from some of the best employee referral programs examples will help companies enjoy the associated benefits.
Advantages and disadvantages of referral marketing
Today, a good number of companies rely on referral marketing when seeking to recruit new employees. Here are some of the reasons why this recruitment method has become popular.
Saves money for recruiting – compared to other sources of hire, referral marketing ensures a shorter hiring time. This, in turn, helps to save money for recruiting. However, you should rely on an employee referral program flyer template to announce the recruitment process to existing employees.
Increase employee productivity– employee referral statistics 2018 show that referral hires fit in the company culture faster, have a higher retention rate and are likely to be more productive than their counterparts.
Drives employee engagement – referral employees have a better chance of feeling more comfortable with their colleagues. In addition, by fitting into the company culture, this is likely to drive employee engagement.
For all the advantages associated with the referral market, the process is not without some disadvantages. Here are some of its demerits.
Can lead to the formation of cliques: Referral hires will definitely have a relationship with the existing employees who recommended them. Once they assume their respective roles in the company, there is a chance that they will form cliques. This could leave other employees feeling left out, a factor that could have serious implications on teamwork and collaboration.
Can contribute to a lack of diversity and ideas: By recruiting people from your employees’ networks, you will realize that they have many things in common. This means that the workplace may lack diversity as well as new, innovative ideas that could bring about growth.
Risk of favoritism: While employee referral bonus amounts are meant to encourage employees to recommend qualified candidates for open positions, they are also associated with the risk of favoritism. An employee could influence the process so as to receive this bonus.
One of the ways to ensure maximum benefits is to make all employees aware of the employee referral program announcement. Once the recruitment exercise has been completed, employee referral program names should be made public to encourage transparency.