According to new Human Capital Institute (HCI) research sponsored by Montage, 29% of organizations have increased their use of employee referrals in the past year. Employee referrals are trending up, and I can’t say I’m surprised. Employee networks are an essential source of job candidates for TA teams, especially in challenging recruiting environments. Often, these referrals are a win for all parties involved.
When Employee Referral Programs Work
In a perfect HR world, a key source of a company’s hires would come as a result of employee referrals. New hires sourced this way tend to stay longer at a company. They tend to be well-aligned with organizational culture, too. It makes sense – recommending employees know both the company and their colleagues or friends, so they’re in a strong position for corporate matchmaking.
Employee referral programs can be a win all the way around:
- It’s a great opportunity to reward employees for getting more fully engaged;
- A foot in the door can make the hiring process easier and faster for referred candidates; and
- Employee referrals can reduce cost-per-hire and time-to-fill.
What’s the one thing all successful employee referral programs have in common? Employees satisfied with their employment experience and proud of their company. That engagement and positive culture are vital in so many ways, including employees’ willingness to connect friends and colleagues to a potential job opportunity within their firm. Companies which lack employee engagement won’t see many candidates coming from their network.
3 Ways to Boost Referral Quantity and Value
You can turn employee referrals into a more productive candidate sourcing channel with these steps:
- Make open positions known company-wide. When you have open positions in a department or business unit, communicate that to all employees, not just those in the same area. Maintain the information consistently in a place that’s easy for all employees to access whenever they’d like.
- Be clear on what you need. Your recruiter has already talked with the hiring manager about necessary behaviors, attributes and experiences in addition to required skills for an open position. Share your ideal candidate with all employees so they can make higher-quality referrals.
- Tell and re-tell the story. When an employee-recommended candidate is hired, share the good news across the company, including any benefit the employee earned. Talk up the story to reinforce the advantages of making referrals.
Stretch Your Thinking
One of the best hires I’ve ever made came from an employee referral. On paper, this employee-recommended candidate looked overqualified, and, fearing he would quickly become bored and leave, the hiring manager didn’t want to interview him. I decided to talk with him anyway because of his connection with a current employee. I soon realized he actually was a great fit. Long story short, the hiring manager was able to expand her thinking about the role, the candidate was hired, and then promoted within the year. This employee referral caused our TA team and the hiring manager to think outside the box, to the benefit of all involved.
If you’d like to delve deeper into employee referrals as a quality candidate source, take a few minutes to read HCI’s new research, Making Referral Programs Count: Sourcing Quality Hires through Employee Networks. You’ll find there’s good reason nearly one in three companies is counting on it to improve their hiring.
Senior HR Manager Lisa Wilke, PHR, SHRM-CP, works to find, select and engage the high-performing team members Montage relies on to drive successful client partnerships worldwide. Her focus is on enabling talented individuals to develop to their full potential. Lisa brings nearly 15 years of experience in human resources and recruitment to her role and her writing. Reach Lisa at firstname.lastname@example.org.