Benefits of using an employee referral program

When one is looking for a job, a good word from an acquaintance, peer, or friend can bolster the chances of your resume getting more than a cursory look. Some firms have entrenched referral programs where employees are encouraged to recommend people for a job vacancy, and even pay a bonus or reward for the same.

A good beginning for anyone searching for a job is to find out if you know anyone employed at the company you have applied to.

benefits of employee referral program

A referral program is advantageous as a referral from an employee means that the talent recommended will already be familiar with the company’s culture and needs. Also, the search for a candidate is narrowed down to a few that are a good fit for the job, and there is a guarantee of sorts that the recommended future employee comes with the right qualifications and experience.

The program is frequently used to resource top high-quality job candidates and to fulfil senior roles.

Another plus is that employers get to tap into top talents that are not actively looking out for a job but are maybe open to offers. Once you ask your employees to go out there and recommend you, your Employee Value Proposition goes up too. Most candidates now consider an organization’s reputation and brand value before agreeing to join.

For a job seeker, a referral ensures that your application stands out amongst the hundreds that are routinely received for an advertised position. If someone in-house recommends a candidate, he or she will surely get priority consideration.

LinkedIn is a good source to make a referral check. Keeping track of your school and college alumni listings is another way.

For an efficiently run referral program, the HR department needs to first keep employees updated about the programs. There should be an online form that can be easily accessed and filled in by the current employees if they know or have heard of someone who is an easy fit for the organization.

Secondly, the referral program tab for current employees should clearly list out what the company looks for in a prospective candidate.

Another way is to tap those employees who have made a move from a competitor and you can let them know that you are open to hires from that particular company due to its good talent management and reputation.

To encourage employees to keep an eye out for good prospective candidates, some companies offer incentives in the form of a monetary reward, a free trip or some other perks.

There are other referral channels that employers and organizations can tap. Old employees who have left on a good note, clients, consultants, suppliers, college network, etc.

Organizations with a referral program should also prepare clear guidelines on what they expect from such recommendations, including a past proven record in a similar position.

Also, by relying on supportive channels for referrals, the hiring pool becomes larger, and the costs involved are nil, except you gain in goodwill.

A referral program is a productive recruiting strategy. According to LinkedIn research, referred employees take the shortest time to hire, they are cost-effective and they and have one of the lowest turnover rate (45% referred employees tend to stick to a company compared to job boards.) Employees who match organizational culture, norms and values better, will also stay longer with the company.

Diana Coker
Diana Coker is a staff writer at The HR Digest, based in New York. She also reports for brands like Technowize. Diana covers HR news, corporate culture, employee benefits, compensation, and leadership. She loves writing HR success stories of individuals who inspire the world. She’s keen on political science and entertains her readers by covering usual workplace tactics.

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