More and more companies are turning to referred hiring, a talent recruitment strategy that is booming due to its valuable benefits and results.
What is a referral program or referral recruitment?
The main objective will always be the same: to find the best talent by leveraging the ability of current employees to recommend, from their network of acquaintances or friends, candidates whom they consider suitable for the vacancy and who they believe would adapt well to teamwork and the organizational culture.
While traditional sources remain the primary suppliers of talent, the referral program, or employee referral recruitment, is one of the most trending sources today.
Once the job requirements are designed, the human resources department communicates and invites selected employees to submit their candidates, who then apply for evaluations and video interviews and are either selected or rejected. Existing employees refer specific individuals or share a job announcement, for example, through their social media accounts.
In the case of a hiring, the employee who made the referral generally receives rewards, depending on the outcome of the selection and the referred person's performance. This is an interesting incentive for employees to continue recommending good talent in the future.
Why are more companies choosing employee referral programs?
The main reason to trust the employee hiring approach is that referral programs have an excellent track record of successful hires. According to the “Recruiting Trends 2020” study by the University of Bamberg, referred employees have a lower turnover rate. Other data supporting the advantages of employee referrals or referral programs are:
- Reduction in recruitment and selection costs and times. The referral program is on average 60% more economical than using other sources.
- On average, the entire process takes 25 days, which is much less time than it takes to hire candidates from other sources.
- Help improve the work environment. Employees tend to recommend someone when they themselves feel very comfortable in the workplace. Additionally, they would recommend people whose attitudes and knowledge they consider compatible with the position, the team, and the organization as a whole.
- Experience in many companies shows that employees hired in this way integrate quickly and quickly begin their productive phase.
- Lower staff turnover. Employees hired under this model show greater commitment and better integration with the work team, extending their working lives.
- Candidates find it more interesting to apply for a vacancy when acquaintances or friends recommend and speak positively about a company than when they do so through other more conventional means.
- Candidates have a 5 times higher chance of getting a job than through traditional methods.
- 40% of the referred candidates end up getting the job.
How to reward employees using a referral program?
The most commonly used is financial compensation, but other complementary or alternative benefits can also be considered, such as the following:
- Days off or additional vacation pay
- Free Training
- Shopping, fuel, or travel coupons
- Devices like cell phones, tablets, among others
- Recognition within the company, for example, a mention on the website
An employee referral program is undoubtedly an effective source for recruiting top talent.
