Research shows that the current job market is 90% candidate-driven. To that effect, you don’t pick talent anymore. Talent picks you; therefore, creating an employee referral program can improve your talent acquisition as an HR administrator or acquisition specialist.
What is an Employee Referral Program, and why does it matter?
An employee referral program is an organized method of requesting and receiving employee referrals from your current employees at your organization. Your employees can still recommend possible good prospects if you lack an employee referral program, but it should not happen in an ad hoc manner for it to be effective.
You add another tool to your recruiting plan using employee recommendation programs with an employee referral program. This way; you are ahead of other companies in landing your dream team.
HR can build a successful employee referral program through these steps.
1. Decide when to ask for referrals.
An employer should know when to utilize referrals to identify competent applicants.
Will you start the hiring process by asking for referrals, or will it be preferable to use traditional recruitment strategies, for example, job postings? Will you utilize them for all available positions or those particularly difficult to fill?
Once you’ve established your hiring objectives, the challenges above will be easy to solve. For example, it’s good to use references right away to employ prospects hastily, as they’ve proven to cut overall hiring time.
2. Make your employee referral program known.
Involving your workmates in the referral program is one way to make it effective. Your employees should be aware of the following;
- How to refer someone (and that you want them to refer in the first place).
- It’s quick and straightforward to make a referral.
- What the role requires.
Employees will respond positively if the procedure is well-structured and articulated, resulting in an effective referral program.
3. Encourage and motivate your employees.
Establishing a referral program enables a firm to obtain broader hiring avenues; the employees. But it’s not as easy; finding competent applicants is still your responsibility, not theirs. They’re busy with their work and goals, so referring to possible good fits isn’t always front of mind. You may need to incentivize the procedure at this point.
A referral bonus scheme for employees can help motivate your teammates. When they believe there is a benefit to them, they are more inclined to consider and refer persons from their network whose candidates would qualify for your vacant positions. Make clear what makes up a fruitful employee recommendation and when one is qualified for a referral incentive (e.g., employees receive perks such as a bonus for the referrals recruited or those who stay with the company for a certain period).
4. HR should track employee recommendations.
Finally, you’ll need to collect and analyze some HR indicators to determine your employee referral program’s success – or failure. These could include the following:
- The ratio of total referrals to the number of hired referrals:
- The number of referrals per role/department:
- The ratio of referred candidates to the rest of the employees, regarding turnover and retention rates.
Benefits of an Employee Referral Program
Reduced Hiring Time
Colleagues would conduct indirect candidate screening because they are well-versed in job requirements. As a result, the candidate applications you receive due to an employee reference are more qualified leads than you would otherwise receive.
Better Conversion Rate
Candidates obtained through the referral program are more likely to move forward in the interview process.
Reduces Recruitment Cost Significantly
Hiring agencies need a commission. Don’t forget there are other direct and indirect costs involved in the costly hiring process. Using Employee Referral minimizes these costs.
Boost Employer Branding
Another essential advantage of employee referrals is that they assist your company in expanding as a brand. You get more traffic when your employees spread the news about different job positions. This may be a referral or direct traffic. Traffic boosts your brand’s visibility as well.
Easily Find Candidates For Hard To Fill Roles
The most difficult aspect of filling difficult-to-fill positions is the scarcity of qualified candidates on the market. You won’t find them on major job boards, career sites, or anywhere else. Your employees’ professional network is the most outstanding approach to contact them. Naturally, people with similar skill sets have other professionals in their network.
- Improved quality of the hire
- better employee retention rate
- Improves the scope of employee engagement
Embracing Employee Referral Programs has merits, as seen above. Now that you’ve grasped the key elements of an effective employee referral program, you should try it. HR can incorporate it into the company alongside other methods like job advertisements.
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