How employee referrals, applicant quality and higher performance are related?

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    Jun 17, 2014
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How employee referrals, applicant quality and higher performance are related? Photo by Savio Vadakkan

Employee referrals are not just about saving time and money. Their real value lies in their ability to attract higher caliber candidates with ability to significantly outperform hires from other recruitment sources. By motivating employees to participate in the process of organization building, employee referral is the only recruitment source with the potential to positively impact employee engagement and performance at an organizational level.

Infact the biggest advantage of an employee referral program is that it provides an organization with access to a high quality talent pool they might not otherwise have been able to tap. The natural tendency of human beings is to associate with other people similar to themselves. Your current employees have already adapted and thrived within the current organizational culture, and hence people they refer are likely to fit in culturally in the prevailing work environment. The fact that a current employee is promoting the job opening is in itself a big selling point for good talent as they feel reassured about the employee friendliness of the organization. Many organizations, infact accord special preference to referrals from top performers, as their connections are more likely to be high performers themselves with the ability to add significant business value to the organization. Also since employees know the organization and the job intimately they are able to do a proper pre screening to refer only candidates whose skills and experience match the job requirements and can adapt to the culture. This is one of the main reasons why hiring through employee referrals is faster as there is much less screening required to be done.

Better applicant quality naturally translates into more productive employees who are able to significantly outperform hires from other sources. Infact a study by University of California, Berkeley titled “The Value of Hiring through Referrals” threw up the following findings related to positive business impact resulting from effective hiring through referrals.

• Referral hires are more productive and are able to impact profit by approximately 25 percent more than employees hired from other sources.

• Referrals from top performers in the organization are three times more productive for the organization compared to all other hires

• Employees hired through referrals are 10-30% less likely to quit than hires from other sources. Higher retention rates means a more engaged and productive workforce, a big competitive edge for any organization.

Using an employee referral tool like Zalp to source the bulk of their hiring is fast becoming a no brainer for organizations as the benefits both direct and indirect become more and more evident.

Author's Profile

Savio Vadakkan is the Marketing Professional at ZALP, a leading employee referral tool. Zalp enables organizations to boost their employee referral hires by implementing an effective employee referral program.

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