Getting open positions filled in a short space of time and finding qualified candidates is one significant challenge for HR managers. Your goal as a recruiter is to find the best talent for new vacancies and make the perfect hire.
You might have tried using various recruitment methods, posted your vacancies on job boards and used your recruitment budget to cover the costs of job advertising, but have you considered referral recruitment? If you haven’t, take a look at this article; it covers the benefits of employee referrals and how it will boost your recruiting.
What is referral recruitment?
Referral recruitment is part of an internal recruitment strategy that uses employee referrals or an employee referral program during the hiring process. It is a strategic and structured approach through which employers can find potential candidates to make successful hires and fill their job openings.
How do employee referral programs work?
Employee referrals work like this. A hiring manager will encourage employees to refer potential candidates to you who are a part of their network and fill an organization’s job openings. Hiring managers might set up an employee referral program as part of the employee referral process.
Companies might aim to reward employees for the referred candidates. Current employees might be given an employee referral bonus for successful referrals when they recommend candidates who meet more than the minimum requirements, or perhaps when an employee refers at least one person to you who qualifies as quality talent.
Using referral recruitment as part of the talent acquisition process is a popular strategy for hard to fill roles, and hiring managers are increasingly seeking the support of existing employees for this purpose. They, therefore, motivate employees as part of their quality talent acquisition process.
Benefits of using Referral Recruitment
Four benefits of using referral recruitment and an employee referral recruiting strategy include that you’ll find quality candidates, increase the conversion rate of applicants, reduce time and cost-per-hire, and reduce employee turnover (increase retention rates).
Find high qualified candidates
By using employee referrals as part of the hiring process, your talent pool will contain high-quality candidates and potential new hires who have the best talent for the job.
The referral process will help you reach passive candidates by effortlessly sharing more about your company culture with applicants; after all, employees understand your culture well. Your existing employees who have referred you to high-quality passive candidates are therefore your best asset to attract successful hires.
Increase the conversion rate of applicants
Compared with traditional recruitment methods, employee referrals increase the applicant-to-hire conversion rate; they give you the highest applicant-to-hire rate, you’ll receive top candidates who are better aligned with your open positions, and they will already be prequalified.
As your existing employees can become ambassadors for their employer brand, and inform referred candidates of more details about your organization’s perks, and the company culture, this will increase the applicant to hire conversion rate too as referred candidates appreciate learning about the company culture.
Reduce time to hire and cost per hire
As there’s no need to create job postings for your job openings, or sort through resumes, referrals can reduce your time to hire significantly, and save time in the recruitment process.
Using an employee referral method can even help reduce recruiting costs and costs per hire. It achieves this by simplifying the first candidate screening as you won’t have to pay to advertise any job postings on job boards.
Reduce the rate of employee turnover
As referred applicants’ values tend to be better aligned with your open positions as they know what to expect from your business and understand your company values, each new hire who has been referred through current employees will stay at the company longer. Employee referrals, therefore, increase employee retention rates.
Important statistics about referral recruitment
From reduced time-to-hire to increased conversion, lower costs, and lower turnover, here are four statistics about referral recruitment.
1. Time to hire is only a fraction of hiring time with traditional job boards
According to JobVite, when using employee referrals, the time-to-hire reduces to an average of just 29 days compared with using a job board for top talent acquisition. With the latter, you’ll typically make a hire within 39 to 55 days.
2. Referral programs increase the applicant-to-hire conversion rate
With employee referrals, the applicant-to-hire conversion is around 40%, even though the referrals themselves make up about 7% of potential candidates. Across all industries, the average interview-to-hire conversion rate for applicants is 8%.
3. Keep recruiting costs low with employee referral programs
Employee referral programmes tend to be less costly than traditional recruitment methods; you’ll typically pay less than $1,000 per hire and talent acquisition. Traditional recruiting methods, however, can come at a high cost — between $4,285 to more than $18,000 per hire.
4. Employee referral programs reduce employee turnover
By using an employee referral program, most companies can achieve a 6% reduction in turnover or more compared with using traditional hiring methods.
Keep the recruiting costs low
An employee referral program is ideal for faster, cost-effective, efficient hiring. HR professionals can use it to increase employee retention rates, enhance the candidate experience (as employees feel positive about joining an organization with a strong culture) and for exceptional talent acquisition.
Remember, to keep employees at your company longer and keep recruiting costs low with a successful recruitment process, keep referred candidates and current employees updated about the hiring process and use a referral bonus as an incentive.
Discover top talent and those hard to find skills with an employee referral program. Get more information at recruitmenttech.com.