January 10,2023 – Myth: You need to deploy recruitment methods only when there is a position available.
Truth: You must remain on the lookout for great talent continuously, even when there is no open position.
Now, it may seem like a monumental task to run a continuous hiring drive but the simplest way to go about identifying and recruiting great talent is to create a simple and effective employee referral program. Your employees are sure to have family, friends and acquaintances who are equally qualified and would make a great addition to your team and given the right incentive, they would be happy to share this information with you.
Importance Of An Employee Referral Program
There is a reason most organisations, especially in the tech industry, have some kind of employee referral program in place. It’s because they are one of the best sources to find and hire the right talent.
Setting up a successful employee referral program can be daunting but if done right, it can be very effective and build a strong and efficient team. There are many benefits to building a referral program:
- Hiring Candidates Who Fit Better
Referred candidates already know quite a bit about your company and its culture through the employee who referred them. They understand the culture and values that the organisation stands for so it’s easier for them to fit in and embrace the culture.
- Fast Hiring
Hiring a new employee can sometimes be a long-drawn process because it isn’t easy to find the right fit. However, research shows that the average hiring time through employee referrals is 29 days as compared to the average of 55 days it takes to hire through a job portal.
- Better Retention Rate
If a new employee is referred by an existing one, it means they are interested in working with the organisation. This leads to a higher retention rate, especially past the first-year mark. The retention rate of employees hired through a job portal stands at 33% whereas, the rate of employee retention for candidates hired through referrals is at a whopping 46%.
Moreover, 45% of people employed through referrals stay with the company for more than four years which saves a lot of time, effort and money for the organisation.
- Reaching Passive Candidates
Some of the best talent in the industry is passive which means they’re not actively looking for a change but are open to it. You can reach these passive candidates through your existing employees because chances are, they run in the same circles.
- Higher Productivity
Employees that come in through a referral, have added motivation to prove themselves which is why they go the extra mile to get things done, leading to higher productivity. Research shows that employees hired through referrals generate approximately 25% more profit than those hired through other sources.
With all those evident benefits of an employee referral program, not having one for your organisation seems like a disservice