With shortages of qualified talent in various industries across the U.S., as well as 93 percent of CEOs finding that they need to change their strategy for attracting and retaining talent, businesses today face a significant challenge when it comes to identifying and hiring best-fit candidates to reach company goals and objectives. However, one highly successful and cost-effective talent acquisition tactic that can be employed to quickly source top talent is creating an employee referral program. By leveraging the social and professional networks of their current employees, businesses can hire workers who fit in and perform better, stay with the company longer, and potentially know additional passive candidates to source for future hiring needs. With this in mind, let’s take a look at ways businesses can maximize the effectiveness of their employee referral programs to find and hire the best candidates and achieve business success.
It All Starts With Education
The first step in maximizing the effectiveness of an employee referral program is educating your employees on its overall value to the organization. Holding regular, company-wide information sessions on your program and its benefits is a great way to get your employees on the same page and eager to participate. By communicating statistics such as 47 percent of referrals stay with a company three years or longer, or that 60 percent of employers agree that referrals are a better overall fit with the company, businesses can ensure that their employees are educated on the positive attributes of employee referral programs and begin thinking of potential professional and personal contacts who would be suitable to submit for consideration.
Show Me the Money
To promote participation in employee referral programs, many companies offer tangible incentives for their employees, such as cash payouts or extra PTO days for successful employee referral hires. By offering these lucrative rewards for employees to participate, businesses can ensure a steady pipeline of potential candidates that is more cost-effective than rolling the dice with costly job board postings and pay-per-click services. As recruiting through employee referral programs puts cost-per-hire at only about $1,000 per employee, businesses that offer monetary compensation to employees for successful hires will still be ahead compared to those that use more traditional recruiting methods. Additionally, regularly highlighting employees who submit successful hires and receive these rewards will also drive additional employees to participate in the program.
Make It Easy On Your Employees
When developing your employee referral program, establishing a simple way for your employees to submit a referral is crucial to ensure success. By creating a branded company referral portal integrated with your ATS, employees can quickly and easily upload a resume with a few clicks of the keyboard and mouse. Adding to this idea, multiple company employee referral portals can also be utilized at larger organizations to allow employee submissions for specific business segments or office locations, such as your company’s plastics division or European office. As 43 percent of companies say that their best candidates come from employee referrals, creating an easy way for your staff to submit candidates is one of the most important steps to achieve an effective employee referral program.
As finding and hiring top talent continues to become more difficult in recent years due to improving economic conditions and a shift to a job seeker’s market, companies must actively develop creative ways to successfully find and hire the best candidates to stay competitive and offer a top-quality product to its customers. By taking advantage of their most valuable hiring asset, their current employees, and creating well-designed programs that are easy to use and promote participation, businesses can successfully find top talent while also reducing key hiring metrics, including time-to-hire and cost-to-fill, to increase the overall productivity and effectiveness of their talent acquisition operations.
Glen Braunsdorf is a content strategy associate at iCIMS.
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