Discovering Top Talents Through Employee Referrals

Did you know that over 76% revealed that attracting the right job candidates is their greatest challenge? [1] And it goes without saying that time is of the essence in the heated talent market. Employee referrals come in as a quick solution that connects you to a pool of talent who come highly recommended and are more likely to be a good fit for the company culture. How does it work? How do you implement it? Is there anything you should be aware of before you get right to it? Let’s find out.

What Are Employee Referrals?

Employee referrals are a hiring method through which employers request their own employees to recommend candidates whom they believe would be fit for open roles. This approach leverages the organization’s internal resources - employees - and their networks to find potential candidates. Employee referrals are a powerful complement to a recruitment team’s existing hiring channels, as recruitment teams rank them as the key source of hire. [1] Companies would oftentimes establish an employee referral program, which includes incentives such as cash or benefits for any referral who successfully completes a defined duration of employment. For example, an employee would receive a cash incentive, or referral bonus, when a candidate successfully completes a period of three months on the job.

Employee referrals are not a one-off program. They are a structured, long-term exercise that encourages employees to take part in the expansion of their organizations by actively recommending potential candidates to the hiring team.

How to Implement Employee Referrals

1. Explain Job Requirements & Keep Employees Updated

One of the most important steps in implementing an effective employee referral program is to clearly define and communicate the job requirements to your employees. This ensures that they have a clear understanding of the skills and qualifications needed for the position, making it easier for them to refer suitable candidates. Aside from that, keeping employees updated on any new job openings or changes in the referral program will keep them engaged and motivated to refer potential candidates.

You can use a recruitment tool like Manatal to make this step easier. Manatal is an Applicant Tracking System (ATS) packed with features like a Branded Career Page that allows you to easily design and create a career site to match your employer’s brand. Within your career page provided by Manatal, you can post job openings that come with clear job descriptions to inform employees participating referrals program what you’re expecting. Manatal’s career site also has a referral section that allows your employees to easily and quickly offer their recommendations.

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2. Incentivize Referrals

Offering incentives for employee referrals is a great way to encourage employees to actively participate in the program. This could be in the form of cash bonuses or other perks. Keep in mind that rewarding employees for successful referrals not only motivates them to refer qualified candidates but also shows appreciation for their efforts.

3. Make the Referral Process Simple

To streamline the referral process, it is important to make it as easy as possible for employees to submit referrals. This could be done through a dedicated referral portal on your company's intranet, where employees can easily submit candidate information and track the progress of their referrals. This is why you need to pay attention to this step; simplifying the process will increase employee participation and ultimately lead to more referrals.

4. Communicate the Benefits of Employee Referrals

Educating employees on the benefits of employee referrals can help them understand the impact of their referrals on the company. From reducing recruitment costs to bringing in high-quality candidates, employee referrals have numerous advantages for both the company and the employee. So, make sure to highlight these benefits. It’ll encourage employees to actively participate in your referral program.

5. Provide Training & Support

To ensure the success of your employee referrals program, it is a must to provide training and support to employees participating in the program. It could be conducting workshops on effective referral techniques, providing resources for employees to use when referring candidates, or assigning a program manager to answer any questions or concerns.

Benefits of Employee Referrals

• It Saves Time & Cost of Hiring: Instead of waiting for job seekers to scroll through job boards to find your advertisement, employee referrals bring the potential candidates right to your doorstep. And by bypassing time-consuming processes, the cost of hiring is naturally reduced. You can save a fair amount of budget for some other future projects that you have in mind.
• It Improves the Quality of Hire: When employees are recommending people from their networks, they know the strengths of their referrals that could potentially help your company expand and are confident that these individuals can go along with the culture. Once a referred candidate is hired, the onboarding process is likely to play out smoothly. Due to their already established bonds between the referrers and referees, your existing employees would probably provide tips and advice to referred hires on how to make a good start in your company.  The new hires would be quickly aware of their responsibilities and what you are expecting from them.
• It Gives You a Better Employee Retention Rate: Quality of hire leads to better employee retention. And with guidance from your existing employees, referred hires have a clear picture of your work culture and can fit in better. This is also another factor that has contributed to referred hires staying on the job longer than average. Referrers may also feel appreciated - regardless of whether it is about the incentives or not  - simply by adding value to the company they work for. A good recommendation goes a long way and employees who have successfully contributed to this would know that they have played a role in the future of the company.
• It Helps Build Your Employer's Brand: With employee referrals, your employer brand is strengthened in a person-to-person approach directly through your brand ambassadors: your employees. Your employer's brand and value proposition will likely be more attractive and authentic when your employees spread the word around about your open jobs. A personal approach like this also benefits the visibility and awareness of an employer's brand image.

Things to Keep In Mind When Recruiting with Employee Referrals

The Referrals Might be Biased

New hires from biased referrals could potentially bring issues to your organization. Firstly, due to the friendship between the referrals and referrers, there is a chance that these individuals would isolate themselves from the rest of the team members. Socializing only among themselves would cause a negative impact on the working environment as other employees might feel that they are left out, which leads to a team’s formation stage not taking off smoothly. To prevent your company culture from being compromised by this issue, you must keep an eye on new hires and encourage them to socialize with other people in the workplace aside from their affiliates.

When you are expanding with employee referrals, you need to also acknowledge the kind of skills and perspective you are expecting from candidates that would complement the rest of your team. This goes back to the work environment. Some promising recommendations might not actually fit the vibe of your team. So, before you make final decisions on adding referrals to your ranks, be thorough about what they should bring to the table.

There Is a Chance That You Might Lose Both the Referrer and Referee

Usually, referrers and referees share a well-established connection. Should one decide to leave their position for whatever reason, you could be at risk of losing both employees as the other tends to naturally follow. The risk may even be increased if the referees do not go along with the rest of the team. Therefore, it is important that you pay close attention to new hires after their initial onboarding to make sure they are connecting with other individuals in the organization instead of just the one who referred them.   

Bringing It All Together

Finding the right talent to help you increase efficiency and rise above the competition is quite a challenge these days. No matter the size of your company or what your business is, establishing strong recruitment strategies must be on top of your priority list. Employee referrals are one of the most effective ways to expand your organization with top talents. The fact that it saves time and money, improves the quality of hires, increases employee retention rate, and builds your employer brand are some of the reasons why this hiring method should be implemented in your recruitment strategy.

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Citations:

1. LinkedIn