Top 5 Myths About Employee Referral Programs

Learn the common myths about employee referral programs

While it’s well-known that employee referrals are a great way to find quality hires, many organizations still haven’t jumped on the referral program bandwagon. This may be because they’re wary of the process or just don’t understand how they work–but employee referral programs can be a valuable part of your recruitment process.

Recently, Zao, a social employee referral management platform, compiled some data challenging the five most common myths about referral programs that may be able to counter any doubts an organization may have.

Here are their top five myths debunked:

Myth #1: Employees are the only good referrers

This is not true. Once you include trusted non-employees in your referral program — such as former employees, business partners, vendors —  41 percent of referral hires come from these sources when you reward them.

Myth #2: Most employees don’t participate

Initially, participation can be a problem. However, with automation (which streamlines referral programs) and gamification (which uses game mechanics to encourage engagement), between 75 and 100 percent of the employees will participate in the referral process.

Myth #3: Referral rewards don’t matter

Who doesn’t like to be rewarded for their efforts?  You know, most people actually enjoy getting a thumbs up from their employer. Whether it’s monetary or through a social gesture, engagement in referral programs can rise 10 to 50 times when a reward is offered.

Myth #4: Referred employees aren’t any different from other workers

Employees who are referred can actually improve your business. In fact, additional studies have shown that hires from referrals produce about 25 percent more profit and referred workers are 20 percent less likely to quit their jobs.

Myth #5: Referrals can’t produce reliable hires

Reliability is a huge factor in the hiring process. After all, you want to make sure the workers you’re bringing on will stay put. According to a Jobvite survey, 46 percent of employee referrals stay for three or more years. In comparison, employees who are hired from job boards are less likely to stay — 14 percent to be exact.

As you can see, employee referral programs can do wonders for your hiring process. Do your research and be sure to implement a referral program that will not only boost your hiring, but will also be simple for your employees to use.

What do you think? What are some other common myths are employee referral programs?


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Heather Huhman

Heather R. Huhman is a career expert, experienced hiring manager, and founder & president of Come Recommended.

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