How Employee Referrals Fit in to the Bigger Picture of Talent Acquisition:
Finding top quality candidates is important for any company/business. However, it can be difficult to fill your recruiting pipeline with candidates that match the open position and end up becoming costly. Employee referrals are a great way to increase high quality candidates, minimize the time it takes to fill a position, and cut the overhead administrative costs that accumulate from open jobs. Take a look at what employee referrals can do for talent acquisition.
Increase in High Quality Candidates:
Employee referrals are a great way to bring in high quality candidates and fill your recruiting pipeline. The employees at your company know the best fit for the position at hand. In a way the person referred already has a stamp of approval from the employee that referred them. Employee referrals create a more authentic feel for the employer and the candidate. It also helps employees to feel like a vital part of the company. Our 2020 Referral Statistics found that 45% of employees sourced from referrals stay for 4+ years while 25% of employees sourced through job boards only stay for 2+ years.
Time to Fill a Position:
Employee referrals remove the initial step of recruiting, creating a faster way to fill open positions. We already know that employee referrals are 5x more likely to be hired. It is also good to consider that when your coworkers refer someone they know, they can already vouch for that person and make sure that this person meets the minimum requirements for the role. On average you are looking at between 45-60 days to fill a position. That is almost two months of recruiting and interviewing just to add someone to the team. However, if you are using employee referrals to find the best candidates you are looking at between 35-40 days. Employee referrals eliminate the extra time that would be spent with advertising the initial job and resume screening through applications. Not only is it a benefit to fill positions faster, but 82% of employees rated employee referrals above all other sourcing options to yield the best ROI.
Cut Administrative Costs:
Recruiting can become expensive. Consider the total recruitment cost directly related to the amount of time spent recruiting, including HR time, management staff, etc. Additionally, you have overhead costs that accumulate the longer the job is open and often need to resort to outside resources to help find the right candidates. Overhead management is the key to a successful program, but without it your referral tracking can fall short. Let’s do a little math. Say your program is off to a strong start then all of the sudden you have 10% of your employees making referrals. Administrators are tracking bonuses on a spreadsheet with more than 10,000 employees in that company. This ends up becoming 1000+ line items on a spreadsheet. Not to mention this becomes a full time job for someone to keep track of. As your referral program grows the more tedious the data entry becomes, unless you are able to automate the process from the beginning. Thanks to automation your talent acquisition team won’t have to spend extra time maintaining spreadsheets and manually tracking bonuses when they could’ve been filling roles. Employee referrals end up saving over $7,500 per hire.
Still wondering what how employee referrals can be beneficial? Take a look at our 2020 Employee Referral Statistics that You Need to Know for 2021.