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Harness the Power of Employee Referrals with Incentive Programs

In Human Resources — by Recruiterbox

employee-referrals

If you’re tired of sifting through candidate after candidate with no hope of determining your new A-player, it’s time to look inward. Not in the “personal reflection” kind of way, rather recruiting the people who already work for you to find your next great employee, using referrals.

Job seekers bemoan the hidden job market , and with good reason: only 15% of jobs are filled through job boards — the rest are filled internally (i.e., promotions) or through employee referrals. Frustrating for job seekers, but a boon for employers and recruiters. Why muck with job boards when you can have a simpler, faster hiring process where someone has already vetted the candidate? You still have to create job ads and onboard the new hires , but referrals are currently the best way for employers to fill open positions.

Save Money With Referrals

There’s more to employee referrals than making things simple: it saves you money both in the short and long term. Regular recruiting costs from job boards, background checks, and using an inefficient Applicant Tracking System will set you back around $100 per month per person , whereas using employee referrals can save larger firms as much as $500. Even examining regular candidate data, referrals are a more effective hiring method. Referral candidates make up about 6% of the total candidate pool but are over 25% of the hires. So, if you have the possibility to promote referrals in your company, take it. You’ll lose money by not taking advantage of the opportunity.

Referrals are more likely to be hired , perform better on the job, and less likely to quit. This means they can save you from the costs of employee turnover , which can range from 30-50% of a worker’s salary for an entry-level position, 150% for a mid-level position, and a whopping 400% for a high-level position.

Incentivize and Engage With Referral Programs

How do you encourage your employees to promote your workplace? With incentive programs. There are several ways to incentivize employees to refer friends and acquaintances to your workplace, and the results can pay dividends. In the world of tech, referral bonuses can range from $1000-10,000, which means companies are putting a larger emphasis on referrals. Additionally, 46% of the hires in top performing companies are referrals. These incentives make workers more likely to tell their friends about a job opening by letting them know there’s something in it for them if they do.

Encourage employee referrals to make the whole team more productive. Referred employees are 25% more productive than those found through job boards, and the employee who does the referring is likely to perform better as well. Additionally, top performers will likely recruit those of similar work ethic and performance, and subsequently will make better recommendations. Kate Pope ( @kateVpope ), Manager of Talent Acquisition at Achievers, said:

“When a growing company like ours looks for top talent who fit within our dynamic culture, it’s important to use our most valued asset to help recruit: our employees. Job boards, sourcing tools, and job fairs can be a huge expense. We would much rather invest our dollars back into our employees by rewarding them for helping us find A-Players.”

The end result: referred employees are more engaged in their work than they otherwise would have been, meaning they have a 13% higher retention rate than hires from traditional sources. From reduced recruiting costs, to better employee engagement, to long-term retention, an employee referral program at your workplace is worth more than the incentives you’ll give the referring employees. Start building out a referral program at your organization with the simplest tool of all, tell your employees you’re looking!

Recruiterbox is considered the most user friendly hiring software on the market. If you’re ready to take your recruiting and hiring to the next level, request a Recruiterbox demo today.