Sourcing New Hires Through Employee Referral Programs

Sourcing New Hires Through Employee Referral Programs

For a company that is cost-conscious recruiting in today’s labor market, the appeal of an employee referral program is quite high. It provides a fruitful source of capable candidates who are likely to fit company culture than the average candidate.

In addition, the primary cost for an employee referral program is the financial incentive for referring candidates. In fact, the expense is much lower than the commission that a recruiter would be paid.

Relationships are Key

The value of the personal connection that the employee has with the referred candidate is probably the main selling point for an employee referral program. All things are based on relationships.

Your employees know better than anyone who you should hire to fill the positions within your business. In fact, over half of a company’s new hires will likely come from the referral program each month.

Employee ReferralsFulfilling an Urgent Need for Talent

With an employee referral program, the time to hire is much faster than through other recruiting methods. When time is a factor, it will take longer to source candidates through other channels if you do not have an employee referral program effectively in place.

The Moderate Cost of Employee Referrals

The cost of an employee referral program is quite modest. For this reason, these programs are becoming increasingly popular with several employees in a wide variety of industries.

Consider if you were to pay an external recruiting professional for a job that paid $100,000. You would have to pay the recruiter as much as $20,000. That is significantly more than the $3,000 that you would be paying as an incentive through an employee referral program. Keep in mind, however, that posting available positions on a job site would still be the cheapest method of recruitment although less effective.

See one of our previous articles on Automated Technology Growth

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