According to SHRM, recruiters say employee referrals are the top source of hires. In a study that analyzed data from more than 14 million applicants, employee referrals delivered more than 30% of overall hires, and nearly half of internally sourced hires.
But that’s not all. Industry research shows that recruiters look to employee referrals for much more than just applicants and hires:
- 82% of employers rated employee referrals as generating the best ROI, above all other sources. (CareerBuilder)
- Referred candidates are 55% faster to hire, compared with employees sourced through career sites. (HR Technologist)
- 88% of employers said that referrals are the best source for above-average applicants. (Dr. John Sullivan Research)
Employee referrals are more than just a reliable talent source — recruiters rely on them to drive value throughout the hiring process.
Why it matters
Currently, the amount of jobs available in the U.S. outnumbers the amount of active job seekers. That shift has created a candidate-driven hiring market, and recruiters have had to adapt to the changing realities of modern hiring.
As a result, cost of hire is increasing. As companies have had to put in more time and effort to recruit top candidates, Gartner estimates acquisition costs have risen as much as 26% between 2015 and 2017.
At the same time, candidate expectations are higher than ever before. In our 2019 Recruiting Study, we found that the vast majority of candidates — 81% — expect the hiring process to wrap up in two weeks or less, across all generations.
An employee referral program is a great way to accelerate hiring, while working to more efficiently to decrease acquisition costs.
What people want in a referral process — and how to deliver
Across all generations, candidates point to referrals as the most valuable source when searching for a job. But of course, the hardest part of an employee referral program isn’t building it. You have to get employees to participate.
Many companies use incentives (bonuses, vacation days, etc.) to drive participation — but the easiest way to get employees involved is adopting an easy-to-use process that’s simple and won’t take too much time out of their day. Among companies that say they’re most satisfied with their referral program, the majority (63%) use a third-party technology platform outside of their ATS to ensure they get the most value — and employee participation — out of their referral program.
As a best practice, it’s smart to keep employees who’ve referred candidates in the loop. Ensure your program supports automated communications to keep employees updated, or provides them access into a tracker to see where their referrals are at in the process.
Bottom line: Companies that prioritize sourcing new talent through an employee referral program will ultimately streamline the hiring process. A dedicated referrals platform can also improve your results, driving more efficiency, speed and cost reductions throughout the candidate journey.
Yello’s Employee Referrals Software allows your internal advocates to easily refer top talent — empowering your team to streamline sourcing efforts, lower turnover rates and create a collaborative company culture.
Empower your workforce
Create a company-wide recruiting culture through transparent employee referral software that engages every employee from submission through hire.
- Mobile-enabled referral platform
- Transparent status tracker for employees
- Internal referral campaigns
Advance referred candidates quickly
Ensure referrals continue through the hiring pipeline with automated review and engagement pushes — moving forward to next steps or nurturing candidates for future roles.
- Automated employee referral follow-up
- Streamlined recruiter engagement
- Proactive, engaged talent pool
Track employee referral program success
Maximize results by measuring employee participation and referral program success to encourage buy-in and growth across the organization.
- Pipelining and reporting
- Referral source tracking
- Employee participation metrics
“Our goal is to increase our employee referral program to 20% the first year, 30% the second year and then to achieve an industry-leading figure of 40% by the third year.”
Build a better employee referral program
Yello helps you empower your workforce to refer top talent, leveraging a simple and integrated platform that employees will actually use. Whether you’re looking to build your program from scratch or improve upon existing manual processes, Yello has the solutions to drive efficient referrals and improve ROI at your organization.
