Your Business Case for an Employee Referral Program

Oct 19, 2018

This guest post is provided Jessica Woloszyn, Content Development Associate at iCIMS

It’s no secret that a formula for business success revolves largely around the talent an organization is able to attract and retain to drive objectives. In today’s labor market, job seekers are finding employment easier than in the past. As a result, it has become difficult for recruiters to win over the quality candidates they desire, requiring innovative sourcing methods and strategic talent acquisition.

One method that organizations have leaned on for quite some time is the ability to tap into the networks of their current employees for referrals of likeminded talent from a trusted source. Although the general concept of an employee referral program seems pretty straight forward, many organizations struggle to implement a sustainable process that leadership can get behind. When there is a lack of buy-in from key personnel, even the most robust program may fail.

Start the conversation to build a business case for a robust employee referral program:

  • Referrals are an Excellent Source of Talent. When hiring managers are determining talent needs to move the business forward, they are most likely collaborating with leadership to outline what an ideal employee would encompass as far as technical, behavioral and experiential skill requirements. That same conversation can then be passed on to employees to provide a roadmap for identifying high-quality candidates in their network. In fact, 60 percent of employers believe referrals bring in candidates that are a better fit for the company.
  • Less Vacancies Offer Direct Financial Benefits. The idea of a vacancy is something all recruiters are well aware of as a business cost. This can include lost productivity, revenue and even customer attrition in some cases. The simplicity of employee referrals as a sourcing tool is instrumental in saving on recruiting cost and time spent attracting new talent, while also providing retention benefits. Referrals have a greater likelihood to stay with the organization and be satisfied and motivated throughout their time as an employee, which means not only do vacancies get filled quicker, but they also stay filled longer. Seventy percent of referred employees will remain in their positions, with 86 percent of working Americans saying they would be happier at a job they were referred to.
  • Employee Engagement Increases with a Formal Program. You may be surprised to hear that one in five American workers are unsatisfied with their company’s current employee referral program, and that disengagement can cause the program to be unsuccessful. When employees feel that their voice is heard in terms of who would be a great talent fit, they become not only more invested in the hiring process, but also in the company’s culture as a whole. Having true advocates provides employee engagement benefits that last well beyond referring new employees, contributing to increased retention for the long haul.

Back Your Business Case with a Strong Solution

Once your business case has been established, inform leaders about the ways a dedicated employee referral solution can reduce recruiter time and streamline the tracking of incoming referrals to further increase the potential for great departmental efficiency. Companies can better capitalize on this effective source of hire, by making participation easier.

With features such as gamification and competitive referral campaigns, the amount and quality of referrals across a business is enhanced. Additionally, many dedicated solutions that support your employee referral program introduce mobile and social capabilities for employees to share out openings to their network and refer quality candidates from any device, at any time.

Make it a Unified Experience

The value of an employee referral solution is evident, but by presenting a solution that integrates right into your applicant tracking system under a single best-of-breed platform of record, there is a clear ROI to be seen for the business. Using solutions together under a single system in which they can speak to one another to simplify the hiring process increases recruiter efficiency by making it easy to centralize tools together into one view with simplified workflows.