Employee referral program helps you quickly connect with your employees’ professional network. Within a short span of time, you get to reach to a huge talent pool. And this becomes the primary reason for other benefits of employee referral programs. Let’s look at the benefits of employee referrals and how it could be your best bet to hire talent.
Hire Quick With Employee Referral:
Your employees would do indirect candidate screening as they would know job requirements really well. Hence, the candidate applications that you get through employee referral are more qualified leads than otherwise. According to a study by Jobvite, it takes 29 days to close a position using employee referrals when compared to 39 days using job sites and 52 days using career sites.
Higher Conversion Rate
Job applicants received through employee referrals tend to move forward in the interview process. According to a Glassdoor interview data report employee referral boost the chances of job matching by 2.6 – 6.6 percent.
Highest ROI
Recruitment is an expensive process. Companies spend a lot of money while hiring. There is a direct and indirect cost involved. Direct cost in terms of the commission that is paid to recruitment agencies. You would easily pay anything between 10-20 percent of annual employee pay to the recruitment agency whereas you just need to pay 2-3 percent as a referral bonus. Direct fees also include the fees that are paid to different job sites and career sites or for any recruitment marketing-related tasks. The indirect cost would include resources spent like time, logistics, etc.
However, running a successful employee referral program can save most of these costs. As employee referral invites more relevant profiles and has a better conversion rate, you really don’t need to spend a lot on other recruitment channels.
Improves Employee Engagement
An employee referral program is the best way to engage your employees in more meaningful ways. When a company asks employees to find the next hire in their organization they feel more empowered. At the same time, it’s a great feeling for them when they help their friends with their next career move. It’s a win-win situation for them.
Human beings always long for rewards and recognition. An employee referral program is a perfect platform to achieve this.
Boost Employer Branding
Another valuable benefit of employee referrals is it helps you grow as a brand. When your employees spread the word about various job openings it brings a lot of traffic your way. This could be a referral or direct traffic. This also improves your brand visibility. If you play your cards right, like brand and design career page in a way that would compel your visitor wanting to know more about you. This way can convert a passive candidate into a job applicant.
Summary – Benefits Of Employee Referrals
Benefits of employee referrals largely depend on the success of the employee referral program. Here is a quick list of the benefits of employee referrals –
Reduced Hiring Time
Better Conversion Rate
Reduces Recruitment Cost Significantly
Improves Quality of Hire
Improves The Scope of Employee Engagement
Boost Employer Branding
If you can execute employee referral programs well then you can enjoy most benefits. Many companies try to implement employee referrals in their organizations. Some use organized ways and some keep it unorganized. What matters most is how you engage your employees through employee referral programs. Successful employee referral programs often use interactive methods, gamification, etc for better employee engagements. Most of the time employee referral program fails because of the ineffective execution of referral programs. However, if you can find ways to motivate your employees to refer more and more of their friends and make the process easy for them then you certainly enjoy all the great benefits of the employee referral programs.