Why do you need to develop an employee referral program now? Easy answer: your competitors are doing it, so you should, too! Better answer: With fierce competition for talent, it’s more important than ever to make sure you’re leveraging a proven channel for sourcing highly qualified job seekers and dream candidates.
Why employee referrals are so important
Every so often, we get stuck in this little recruiting bubble, believing most of our hires come primarily from advertising on job boards. But that’s no longer the case. Research now shows that employee referrals drive a significant amount of hires.
In fact, at Glassdoor, more than 50% of our hires come from internal employee referrals, a serious budget saver as well as a way to drive down cost-per-hire. Best of all, an employee referral doesn’t have to cost a lot, maybe as little as a few hundred dollars per hire.
According to ERE, a great employee referral program can result in:
- Higher quality applicants. Employee referral hires can be up to five times higher quality vs. candidates sourced elsewhere. Think about it: your current employees aren’t going to stick their necks out for just anyone—they want to refer star candidates that have a higher likelihood of getting hired (and who may lead to a payout referral, too).
- Employees who stay longer. To refer a friend, former co-worker or family friend, employees will naturally need to learn more about your company, including the ins and outs of your hiring process. This process and research often instills a greater sense of pride and loyalty in the company, thus deepening employee bonds.
- Time savings for company recruiters. With a referral program, employees voluntarily step up in the hiring process, ultimately saving recruiters time and effort sourcing great candidates. In fact, high-functioning organizations view their employees as brand ambassadors, an integral part of talent acquisition.
According to Jobvite research, “one in seven referrals result in a hire compared to one in 100 general applicants.” This efficiency illustrates why it’s time to start your own referral program. Here are essentials to get yours up and running:
1. Set a budget
Obviously, employee referral programs are going to cost your organization At Glassdoor, we pay employees anywhere from $100 for part-time hires to $5,000 for engineering or data science hires.
Talk to your finance team. Determine how much you can afford to pay employees for each hire, and which hires have the highest priority, e.g., engineers or sales reps.
2. Track everything
It’s crucial to track all hires and referrals in your applicant tracking system (ATS) so you know who brought in whom and which referrals resulted in hires. Investing in a quality ATS (Glassdoor partners with Jobvite) and training your recruiters to understand the key talent analytics it provides will help your organization in the long run.
3. Leverage social media
Don’t rue the fact that most of your employees spend a significant amount of time on social media. Tying in with your ATS, social media networks like Twitter, Facebook and LinkedIn are the perfect platforms to share open positions with friends, former co-workers and family. At Glassdoor, in under 60 seconds, employees can log in to Jobvite and set up social sharing of open positions.
4. Get engaged
Be sure to ask managers to encourage employees to get the word out about open positions. Let them know often how much they’ll be making from each hire. Nothing incentivizes people quite like a bonus!
Remember: employee referral programs don’t have to break the bank. Offer what you can, and accept that employees will be happy receiving anything for referrals. It’s not all about a gigantic payout, it’s about recognizing their help in hiring great talent.