Are Employee Referral Programs Really Worth It?
With a severe talent crunch afflicting most industries, Employee Referral programs are becoming a panacea for motivating the current employees to partner in the recruitment process. For organizations wanting to focus their limited time and resources on programs with the highest impact, the lowest cost and little chance of failure, Employee Referral Programs tower above other recruitment Methods.
Even before discussing the benefits of the new employees that become a part of the organization by way of referrals of existing employees, it is fitting to discuss the positive corporate culture that is promoted by the act of encouraging employees to partake in an activity as important as recruitment. It sends across a positive signal, that the organization values the judgment of its existing employees and trusts them enough to allow them to recommend co-workers.
The process of Employee Referral also, in turn positively affects the Employer brand wherein the organization is perceived to be a great place to work with happy employees.
In terms of quality of candidates, Employee Referrals are known to present a significantly higher percentage of candidates that are qualified for the job. While job postings and recruiting agencies typically reach out to active job seekers, the vast network of employee contacts also include a number of passive candidates who aren’t actively looking for a change in employment, but are equally keen to enhance their career prospects. With fewer candidates presenting themselves through Employee Referrals that do not fit the job requirements, it not only reduces the operational workload of sieving through a host of not so fit profiles, but also significantly reduces the time taken to screen candidates and arrive at a shortlist.
It almost seems like a natural corollary then that Employee Referrals are known to produce employees who show a higher degree of productivity on the job.
A number of researches have gone on to show that Employees recruited through referrals of other employees, stay on with the organization for longer periods of time. With a high employee retention rate, coupled with the fact that the cost of recruiting this employee is a fraction of the cost of employees recruited through traditional sources, the ROI of employee referral activity, turns out to be exponential.
As social networks become an important aspect of life, they also become an important source of social capital for organizations, as it becomes that much easier for existing employees to tap into their contact pool. Despite the old myth that referrals score low on diversity, researches in fact have revealed quite the contrary. Referrals have been seen as being well ahead of major job boards and career fairs
in terms of diversity of candidates offered.
Last but definitely not the least, with employees having large global networks of contacts, employee referral programs work effectively to attract prospects across the world.
Implementing or upgrading your Employee Referral program, is therefore no longer a choice, but an integral part of an effective recruitment strategy.
You can read more on latest trends and technologies in recruitment on zalp.com/theemployeereferralblog/
