The Benefits of Employee Referral Programs
Several years ago, while applying for summer internship positions during college, I recall scouring through all the job postings on my campus career page as well as many other job search websites and applying to any relevant positions that piqued my interest. I vividly remember performing this task each day and waiting for my phone to ring with the hope of potentially receiving a call for an interview.
What I failed to do, instead, was utilize the more powerful tool of networking. What I know now that I wish I’d known then is that networking can potentially open up many more opportunities to jobs that aren’t made available publicly on any of these websites.
Is Applying for Jobs Outdated?
Today, the concept of “applying to jobs” has interestingly become one of the last resources for job seekers and employers alike. Job seekers now rely on other methods such as networking and referrals for opportunities, and employers have also been searching for other methods to recruit top talent into their organizations.
One example has been the creation and/or expansion of employee referral programs. Job seekers use such programs to communicate their interest in obtaining a job in general or within a specific company, and employers utilize referrals when seeking talent to fill their open roles.
If you are an employer and uncertain about the benefits of employee referral programs, here are some interesting facts to consider.
Benefits of Establishing an Employee Referral Program
- Hiring through referrals versus career sites results in a higher employee retention rate after one year (46% vs. 33%). Source: Implementing an Employee Referral Program in Your Organization
- Referrals may lead to higher quality hires in comparison to other recruiting methods. Source: Implementing an Employee Referral Program in Your Organization
- “67% of employers and recruiters said the recruiting process was shorter, and 51% said it was less expensive to recruit through referrals.” Source: Why Employee Referrals are the best source of Hire
- Referrals appear to be a better cultural fit, as employees tend to refer those that are most similar to them.
Before building an employee referral program at your company, there are many factors to consider. These include assessing the benefits, identifying your target employee audience (all or select departments), reward types and practices, ROI etc. I will cover these in more detail in a future blog on how to implement an employee referral program.
Using Your Network to Hire/Apply Smarter
As a job seeker, rather than using the more traditional forms of job searching, it would be advisable to tap into your network either through LinkedIn, or by contacting individuals you may already be acquainted with either professionally or personally. There are several benefits for utilizing this method of job seeking:
- It is especially helpful when seeking opportunities at organizations that are difficult to get into, or that receive a large amount of applications.
- Having a contact person at the employer of your choice will give you an opportunity to ask them questions related to their personal experience at the organization, the company culture, the position, etc. This will enable you to be better prepared if you are asked to participate in the job interview process.
Now that you have more clarity on how employee referrals can benefit your organization or your own job search efforts, why don’t you take some steps in implementing a program at your company or reaching out to someone who may be a valuable asset at a company of your choice?
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