If you’re looking for people to hire, an employee referral program can have many benefits. That’s especially true in today’s environment, in which employment is at record levels. It can be difficult to find qualified people, and the search can be extensive.
If you have employees who go above and beyond in their work, and they know more people who could help your organization grow, having an established referral system makes those connections possible. What benefits could your organization gain from setting up a referral system?
1. They can find more qualified people
Friends and family members who your top employees already know are likely to be somewhat similar to those employees. They are likely to share a similar work ethic and set of values. Referrals from these employees are likely to fit into the company culture, which can be an important determinant of performance. A referral system provides a process and rewards for having your existing workforce specifically refer people who they know are qualified and are put to work.
An employee referral program can increase your reach throughout your geographic area. It can also reach into connections of your employees who are passive job seekers, who are content in their current jobs but might take the opportunity to work alongside someone they know closely.
2. They make the job search more efficient
A referral program can make your job search more efficient by finding candidates faster. In the weeks and months it takes to conduct a traditional search for active job seekers, company productivity may take a hit. Gaining referrals through employee word-of-mouth is likely to be quicker than sharing job postings online when it comes to finding candidates quickly.
In addition, the new employee’s existing connections will likely make their onboarding and introductions more efficient.
3. They reduce costs
The hiring process can cost a great deal in the long run. Some of the cost is the lost productivity of vacant positions. Some of it is the drain on productivity lost to interviewing multiple candidates and so forth. Referral candidates tend to be more streamlined. The more streamlined the hiring process and the onboarding, the less it costs your company.
Find a Referral System that Works for Your Business
It’s prudent to have a plan to determine the effectiveness of an employee referral program.
The most crucial part of the plan is determining the most important goal for the program. Is it to get more qualified employees? Are you looking to improve the cultural fit of the team? Do you need to reduce time-to-hire and decrease costs?
Then, you’ll need to compare referred hires versus hires who weren’t referred. You won’t have valid metrics unless there’s a comparator group. If your central goal was to reduce time to hire, for example, you’ll need to gather data on time to hire for referred candidates versus non-referred. If you wanted to reduce costs, you’ll need data on costs for referred candidates versus non-referred candidates.
Effectiveness in an employee referral program relies on both goal definition and comparisons, in short. Looking for more expert advice on the process of finding qualified candidates? The Applied Companies is here to help businesses across Reno and northern Nevada. Contact us today to connect with our team and learn how we can help your business grow.