Yes, we are talking about your employee referral program. For several years, referrals have topped the list of external hire sources. It makes perfect sense - who can assess cultural fit and level of skill better than a current or former employee? Just to name a few benefits; referred candidate hires boast higher engagement rates, higher retention rates and faster time-to-fill. Put simply, these are the candidates you want flooding your talent pool.
Employee referrals result in about 30-45% of hires, yet referrals only account for 6.9% of total applicants on average. See the problem here? Referrals are commonly star candidates with incredibly high conversion rates, but in reality; very few are applying. So let’s talk about how you can optimize your #1 source of external hires…
Do you remember all of those referred employee benefits I mentioned up there? Well, there are plenty more where those came from, and each one converts back to savings for the organization. Unfortunately, an average of just 1: 3 organizations will actually measure the economic impact of those referred employee resource-savers.
Expert in ERPs, Dr. John Sullivan notes organizations that do measure the economic results can easily attest to the fact that ERPs produce one of the highest ROIs in the HR function. He goes so far as to say, possibly even the enterprise.
So what have we learned? This is a function that you have to measure, especially if you want to keep your ERP budget growing. There is always a budget struggle for those functions that don’t have a nice, big, fat value number assigned to them. This function needs a value number, stat.
Keeping that budget up is essential to this next topic –rewards. Failure to measure the economic impact of your ERP is how poor John with the great referral ended up with a $10 Starbucks card. Now, how willing do you think John, your best coder with a great network, will be to participate in your referral program the next go-round? Yeah, you’ve lost him, and the worst part is that great talent tends to know other great talent. Don’t get stingy with rewards.
Rewards, recognition and gratitude need to be built into this process. When you see a referral come through, before you even review it, you should send a quick “thank you” to the referrer. I know what you’re thinking, “But I don’t want to encourage poor referrals.” I know, the fact of the matter is this step could save you time and/or act as a fail safe. It happens quite often that a candidate with a “referral” doesn’t, in fact, have a referral. Perhaps they saw on Facebook or LinkedIn that one of their connections worked there. Without the step of a standard “thank you”, you’d never know.
Another case for early rewards and recognition comes from Careerify:
“After researching and assessing hundreds of companies, the few that have attained 50%+ of their hires through referrals often initiate recognition once an offer had been made to the candidate. Sometimes interviews are drawn out in a lengthy process. The employee can be an influential person within the offer stage as they ultimately have a stronger relationship to persuade the candidate to accept the opportunity over potential competitive offers. By ensuring that the employee is involved in securing the hire, the employee will likely have greater fulfillment.”
Being quick on the draw and generous with recognition and rewards will always do more good in securing your quality referrals, than it could ever do harm in the way of encouraging poor referrals.
There’s a Technology for That
This process must be backed with solid, user-friendly, social media compatible and automated technology. When employees go out of their way to send you a referral, the last thing they need is a complicated and time-consuming technology throwing roadblocks at them. Instead, choose the technology that turns your employees into brand ambassadors.
A friendly conversation is great, but it won’t exactly expand your reach exponentially. Social media can though. CareerBuilder research revealed 88% of employers rated employee referrals above all other sources for generated quality of new hires. With numbers like that, it’s insane not to tap into the power of your talent’s social networks.
Want to see how it’s done? Check out Broadbean Referral now.
Measurement arms you with the capability to reward, rewards earn engagement and you can leverage that engagement through social media. It’s the big beautiful circle of the ERP life. These resource-saving, cultural fit, quality candidates are exactly what your organization needs. Start optimizing your ERP today.