Employee referral programs are the future of recruitment
Research (2018) from Silkroad with 1000 participating companies, showed that around 55% of all 329.702 hires that were registered were referrals. Traditionally, referrals from employees have always been a great source for companies to hire good quality candidates. However, it is a movement that has been increasing over recent years and has now become the main source of recruitment. For most companies, referral recruitment is therefore critical to reaching their growth targets. Especially in the current job market which is defined by a shortage of qualified candidates, referral recruitment is the way to go. However, often there is no structured program in place and that leaves a lot of potential unused.
What is referral recruitment?
Referral recruitment can simply be defined as a program within organizations that are designed to facilitate and stimulate employees to take an active approach towards recruitment. This often translates in employees that refer friends, old colleagues or candidates that they actively persuaded on LinkedIn or similar platforms. Most of the time, companies offer employees interesting rewards for referring candidates.
Why referral recruitment should be at the center of your recruitment strategy
In the current job market, where young talent is scarce and competition is fierce, it is becoming increasingly difficult for companies to reach growth targets. Especially companies that are focused on technical candidates are experiencing hiring difficulties. Platforms like LinkedIn are becoming more saturated by the minute, as recruitment agencies keep popping up in great numbers. At the same time, due to the fact that most candidates get approached a lot on LinkedIn, they will be less likely to apply for vacancies themselves.
Therefore, organizations should redefine their recruitment strategy to keep attracting the right talent as well as to keep growing. Expecting candidates to find your vacancy and apply is not going to cut it anymore. You will need to be visible for candidates, that means an active approach on platforms like LinkedIn and also a serious investment in employer branding. When you look at employer branding from a recruitment perspective there is one thing that stands out: referral recruitment. For both short- and long-term goals referral recruitment is the most effective way to hire talent. Especially in the current tight job market, referral recruitment should be at the center of every recruitment strategy. Whether you are working at a startup, scaleup or large corporation, referral recruitment is the way to go. It allows you to make every employee an ambassador and, when done right, essentially a recruiter as well.
Benefits of a referral recruitment program
Having a referral recruitment program often translates in more and higher quality candidates and therefore automatically in better hires as well. The reason for this is that candidates that get referred by employees have essentially already been screened in some form. Most employees have a good understanding of the company culture and what kind of people are successful in different roles. Besides that, they also tend to be selective as they have a strong sense of responsibility for candidates they have referred. Employees don’t want their names to be associated with bad candidates or hires.
As I mentioned earlier, by building a strong referral program you can make every employee a part-time recruiter as well. This means an increase in the number of candidates that get to know your company. Therefore at the same time, this also has a positive effect on employer branding. Employees will be talking a lot more about their work with people when they know there is a reward for referring new colleagues. Not only will this increase the company’s presence on social media, but also in the real world this will have its impact. Career possibilities will be on top of mind of colleagues. So even on birthdays, parties or similar events employees might find potential candidates that are looking for a new challenge. The more they get familiar with the hiring process and potential rewards the more successful they will be. An additional benefit of this is that it will increase employer retention as well.