Why Employee Referral is the Best Way to Hire Top Talent
To many recruiters across the world, the second quarter of 2021 became known as the year of the ‘great resignation.’ Employees began to leave their jobs in droves, mainly in pursuit of passion projects and new career opportunities. Some simply wanted a break from a job which they felt they’d been doing for two long. The pandemic and its associated lockdowns made them re-evaluate their work-life balance with the belief that there’s something out there for them that’s more conducive to their lifestyle. HR professionals hoped that the trend might be short-lived, but new research shows that we’re still very much in a candidate-driven market, with the fight for top talent fiercer than ever before.
So what can companies do to ease the difficulties of recruiting the right people for those all important positions? One very good - and proven way - is via an employee referral program. We’ll talk you through its benefits and show you how we’ve set up our own program at 10Clouds.
1. It makes the process of hiring top talent faster
It perhaps goes without saying that candidates who have been referred are much quicker to hire than those who have come via job boards or recruitment agencies. According to research conducted by talent agency JobVite, candidates who have been referred take roughly 29 days to hire and onboard, while those who come from job boards or external recruiters take up to 55 days.
It makes sense, because the process is much simpler. It eliminates the need for researching the right job boards to post on, putting together a brief for a recruitment agency, screening CVs and running other pre-interview tests. Each of these elements can take several days, which combine into weeks of not having a candidate in post.
2. It can bring significant cost savings
Research from Talent Spotting shows that employee referrals have a significant impact on the cost-per-hire of every employee - which across the board can range from a saving of anything from 66% to 87% on hires via job boards and recruiters. There is of course also the money saved in the time previously spent by your internal team on screening CVs and posting job ads.
The money saved can be reallocated to initiatives which support employees, such as training programmes and workshops.
3. It boosts employee engagement
This is a benefit of referrals that is often overlooked, but shouldn’t be. Quite simply, if employees feel that the management team trusts them to make good hiring decisions, they are much more likely to feel generally valued, which in turn will make them more likely to stick around for longer. An added bonus of course is that they’re likely to end up working with one of their friends or a family member!
There are some companies that actually build employee referral into networking events. A good example is Salesforce, which organizes Recruitment Happy Hours in which they encourage employees to bring along a contact who they think would be perfect for one of the positions that they are trying to fill.
But note that referrals don’t have to come from employees. In fact, some companies have found that opening up the scheme to anyone in their network has been even more beneficial - as it has widened the pool of potential candidates. This is what we’ve decided to do at 10Clouds.
4. It has an impact on retention
A study conducted by Applicant Tracking System Icims has found that referred employees are likely to stay in a job much longer than those hired used job boards and recruiters. In fact, referred employees stayed with a job for at least 38 months in contrast with non-referred employees who only stayed for an average of 22 months. This is a significant difference of about 70%.
It makes sense, as these employees are likely to be a much better fit not just in terms of their skills, abilities and experience, but also culturally.
The Employee Referral Program at 10Clouds
Our employee referral program at 10Clouds quite simply rewards you for being a great mate. If you know someone who'd be brilliant for one of our roles, recommend them and get a chance to win up to 7K PLN!
Here’s how it works:
- You can find out who we're currently looking for here. If you know that your friend would be a great fit for one of our roles, let them know.
- When they apply, make sure they share your name in the application form.
- We'll let you know if your referral is hired.
We hope you’ll decide to get involved! Thanks in advance!