Your Former Colleague, Our New Hire
Have you ever referred a friend for a vacant position at your company, or been that referred candidate? If so, was there a referral bonus involved? In the ‘War For Talent’ companies are always on the lookout for new employees who will help their business grow, and fit right in to the company culture. So what’s the best way to find these new team members?
Implementing employee referral bonuses definitely has its merit. In-house employees suggesting their ex-colleagues, friends, or even family, as your company’s newest employee increases the quality of candidates, and can successfully reduce the time and expense of traditional recruitment methods.
For cost-savvy boardrooms, research by the industry title The Recruiter highlights that referral programs can save organizations $3,003 or more per hire. Even better, these hires produce 25 percent more profit for their companies than new hires sourced via other means. As well as saving on outsourcing fees or recruitment agency bills, a referral reduces the time spent by the HR team sifting through CVs and interviewing unsuitable applicants; win-win!
A candidate referral plan can create a bridge between vacant positions and passive job seekers who aren’t necessarily looking for a new challenge, but might be a key to the success of the team. Although not actively looking, they may give a new job opportunity consideration if it offers a better work culture, salary, or even job description
It is also proven that employees hired under referral plans are more likely to stay in a position for longer. Research shows employees hired from employee referrals have 46% retention after one year (versus 33% from career sites and 22% from job boards) on top of boosting office morale – especially for the referee who receives the incentive simply by introducing the new team member.
To run a successful employee referral program It is crucial to let employees know why the program is so valuable to the company’s growth and culture. Paying bonuses only after the new hire has passed their probation period ensures employees consider carefully the candidates they put forward for a vacant position.
Here are some guidelines we follow at Xactly:
1. Communicate a clear referral policy to all staff
2. Share details of open positions on a regular basis
3. Measure results clearly, and pay referrers after successful completion of probation
4. Be clear on why you hire or decline referred candidates
Employees are your best recruiters so encourage them to always be on the look out for new candidates. Your business, culture, and team morale will benefit from their efforts!
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