Every hiring manager knows just how challenging it is to access great talent in today’s market. To find their ideal candidates, hiring teams are going all–in on social media, personal networking, branded ads, etc. These are all essential recruiting tools, but they are not always enough. Data shows that referrals from current employees almost always result in the best hires, with referred employees performing better and staying longer than employees sourced through other methods.
Here are three good reasons why your company should add an employee referral program to its recruiting toolbox today.
Referrals Keep Your Pipeline Full of Quality Talent
A well-designed referral program can keep your hiring teams flush with qualified passive candidates who are not actively seeking new positions but would be willing to explore new opportunities. Typically, referrals are extremely high-quality candidates because referring employees understand that their reputation is on the line both with the company and with their friend. Your employees don’t want to recommend someone who isn’t a good fit because it could damage their credibility and their relationship. And because referrals tend to be high-quality, they have the highest conversion rate of any sourcing method. While only 7% of all referrals follow through with an application, they account for 40% of all hires.
Referrals Lead To High-Performing New Hires
Quality candidates make quality employees and referrals make some of the best new employees you’ll ever work with. Typically, their ramp-up time to full productivity is shorter than new employees who applied cold. They also tend to be a true cultural fit, because the referring employee takes the time to discuss culture with their friend before recommending them. This leads to better performance, happier employees, and, ultimately, improved retention.
Referral Programs Boost Morale
Effective employee referral programs include a monetary bonus. Usually, a percentage of the bonus is paid when a referral is hired, and then the remaining bonus is distributed after the new hire hits a six or nine-month milestone. These bonuses can be a significant morale booster. It not only encourages employees to make reliable referrals, but it also gives employees incentive to refer qualified candidates to you, rather than to someone else in their professional network.
Think you don’t have enough in your budget to pass out referral bonuses? The money you save on recruiting, onboarding, and potentially making a bad hiring decision will more than pay for referral bonuses for your employees.
Are You Ready To Reap the Benefits of Employee Referrals?
It can take a while to build a solid referral program, so if you need excellent referrals today, it pays to partner with an expert recruiting company. If you are looking to improve the quality of your hires while controlling costs, contact the engineering recruiters at Selectek today.