Employee referral schemes really come into their own when we’re looking at talented individuals who, statistically, perform well in an organisation and are retained longer term.
It is largely predicted that candidate referrals will become the premier source of recruitment in the future and having an effective referrals scheme in place across a business will be crucial to capturing potential candidates and attracting higher quality talent in the future.
Here, we outline four reasons why all HR teams should use employee referral schemes:
Referral Schemes Harness the Power of Social Networks
Employee referral schemes harness the latent power of social networks. All employees are part of social networks – constellations of talent – and these almost always include skilled ex-colleagues and peers from their own industry. Doesn’t it make perfect sense to utilise this in creating the best possible team for your organisation?
Best of all, the networks already exist – you don’t have to create or nurture them, just utilise them smartly.
Referral Schemes Reduce Your Cost-Per-Hire
Referral schemes are incredibly cost-effective; in fact, in the Global Employee Referral Index survey, internal referral schemes are consistently cited as the top recruiting source to invest in[1].
You are, after all, essentially turning all of your existing employees into ongoing potential recruiters.
Referral Schemes Encourage Cultural ‘Fit’
There’s also a very obvious link to candidate ‘fit’, since the candidates are known factors rather than unknown quantities (in as much as they’re already known to the employees recommending them, and those recommending employees are known to the employer). This provides a ‘chain of good fit’, where no-one is a complete stranger throughout the process.
The ‘good fit’ aspect assumes that individuals known to employees and recommended by them will share similar attributes and / or worldviews and that the recommending employees see those individuals as potentially fitting seamlessly into your organisation. After all, it wouldn’t be in their own interest to recommend unsuitable candidates.
Hence, cultural fit tends to be enhanced within an organisation through employee referral schemes.
Referral Schemes are a Tacit Celebration of Your Organisation!
Liz Ryan wrote in Forbes Magazine: “Employee referral is the best recruiting channel I know … it’s the only one that reinforces and celebrates your employees in a tangible way for contributing to your company’s success.[2]”
Operating employee referral schemes offers the added advantage of your organisation being spoken about and recommended ‘out there’ in the talent pool’s wider networks, freely and sincerely.
Behind this there’s an unwritten, unspoken assumption that the recommending employees enjoy their work and feel that other skilled contacts would enjoy working for the same organisation too.
Let employee referral schemes celebrate your organisation and its people!
Great! What Next?
If, more practically, you’d like more information about the ‘how’ – ways in which you can set up and maintain an effective employee referral scheme that works well for everyone involved – take a look at our training course ‘Referral and Alumni Scheme Development’
[1] See in particular ZALP, Global Employee Referral Index 2013 Survey. “ZALP unleashes the power of Employee Referrals”. ZALP.com.
[2] Liz Ryan. ‘The Truth about Employee Referrals’, Forbes Magazine, 23 January 2015.
