Eric Friedman | , , , ,| By
The power of an employee referral is well known in the recruiting industry. A recent poll of business showed that 41.4% of businesses referrals account for 80% of sales. From a business perspective that is an overwhelming number in terms of dollars earned from word of mouth marketing. Through the eyes of an HR professional, a referral is seem as the #1 source of a quality hire according to Ere.net. There are rarely any bad statistics when it comes to using your staff as a referral source, but how do you entice them to provide quality hires.
Without incentive your company’s staff are less likely to invite their friends, connections, and acquaintances to apply for a job that might have a higher than normal turnover rate. The cost of a referral is substantially lower, in fact using referral programs for executive and technical positions can really reduce the cost of executive searches or agency fees. In doing so, a well-rounded referral program can make your referral cost lower then traditional sources. The benefits are not only strong from a business perspective, but from a recruiting function, there are many factors that help your company.
Creating and establishing a successful referral program takes time and can only work effectively when your employees are incentivized properly. Here are a few tips that’ll ensure your creating value within your own program:
Creating a successful internal referral system
Knowledge of Open Positions: With larger corporations and several open positions there is usually a disconnect between current employees and recruiters when it comes to positions that need to be filled. Post regular notices, use your internal network, and actively engage your employees in the benefits of using their own personal network to gain better hires. Referrals are the fastest time to fill positions with an average of 29 days. Depending on the size of your company that could cost the company up to $12,500 a year.
Incentivize Your Employees. Who doesn’t want money every time their friend gets hired? Working for small retail companies and getting $200 every time a friend gets hired is worth the investment. Not only do employee referrals stay longer on average at a company, but also 70% of employers felt referred hires fit the company culture and values better. Hourly employees are always looking for ways to make extra cash and this might be the win-win for your organization.
Make it Fun! Who doesn’t want to have fun at work? Create leader boards, contests, promotions, giveaways, and anything else under the sun that’ll make obtaining employee referrals fun. The prize doesn’t have to be monetary, but building a pool of quality employees saves a recruiter time which saves your employer money. This type of program isn’t going to appeal to everyone in your company, but you only need a few competitive people to build lists of 10-15 potential recruits for your business.
Tapping into your staff for referrals
How do you tap into your internal network to find great referrals?