Implementing an Employee Referral Program
Employee referrals are considered one of the most productive recruiting strategies. Research has proven that referred employees are the best employees in many different ways: they take the shortest to hire, they are more affordable to hire and they stay longest with companies and have a lowest turnover rate. Implementing an employee referral program, which allows current employees to refer friends, family, and other associates for open positions within the company, can give your recruitment efforts a major boost.
How? Implementing an employee referral program allows your employees to do a lot of the recruitment work for you. If your employees enjoy their jobs, they’ll have no problem promoting open positions to friends and family. And they’ll be able to speak from personal experience about what it’s like to work for your company, which means any candidates they bring in will be more informed and likely better suited for the company than those who apply with no previous knowledge. Here are 4 great reasons to consider creating your own recruitment channel through an employee referral program:
1. Shave Days off Your Time to Hire
Saving time through more efficient processes is a big priority for most businesses. In today’s fast-paced world, no one has time to waste. And that includes time spent on recruiting and hiring. The good news is that hiring referred candidates can shave days off your time to hire. According to research from Glassdoor, hiring times have been steadily increasing over the last few years. Hiring referred candidates can speed up the process by eliminating extra screening steps and allowing HR professionals to breeze through steps that may otherwise require closer investigation and negotiation (such as application and resume analysis).
2. Cut Recruiting Costs
When you slice the time and effort it takes to recruit a new employee, you also slice the required dollar amount. You pay very little for your employees to advertise your job openings to friends and family – maybe you offer some reward or a small fee – hence you can cut back on traditional job advertisements or outside recruiter costs. Employees have a better understanding of your company and culture anyway and can make a better sell through personal relationships. Even if you offer a monetary employee referral bonus for successful hires (and you should), it’s typically only a fraction of what you might have paid for recruiting and advertising.
3. Create an Engaged Workforce
Allowing current employees to recruit their friends or family members for open positions at your company is a powerful way to create an engaged workforce. And the benefit is twofold:
A. Current employees feel trusted and valued since they are participating in the company’s future and growth (and often receive a financial boost through an employee referral bonus). Plus, if their referral gets the job, they feel a sense of pride and accomplishment.
B. Referred employees feel more engaged from day one since they already know at least one person at the company. And they are often easier to assimilate into the culture since they have a built-in buddy or mentor to turn to for guidance.
4. Increase Employee Retention
According to a report on social recruiting, the best talent often comes from within—through internal hires or employee referrals. Additionally, a study on employee referral programs indicates that employees hired via referral tend to stay with a company longer than those hired through other channels. More than half (56%) of employee referrals who were surveyed for the study said they’ve been in their current role for more than five years. This is great news for your employee retention rates! Hiring employees who start out with a good understanding of the company and an in-house advocate is a successful strategy for reducing turnover.
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