What Is Employee Referral & Why Is It Important

What Is Employee Referral & Why Is It Important

Employee Referral Meaning

The employee referral, in simple words, is when an existing employee recommends any candidate for a vacant position that exists within their organization, hence making the sourcing process easier for HR managers.

It''s no news that the process of hiring is among the most time-consuming human resource procedures. Tapping into recommendations or referrals from existing or former employees might make this entire process quicker and less laborious for the HR professional.

One of the strategies for recruitment is referrals, whereby a company relies on its employees to recommend or refer any person in their network for a specified opening.

This approach helps HR people reach out to the most suitable candidates for an opening. Many companies have an employee referral program where they provide incentives, bonuses, or prizes to a person referring a qualified person to the given company. We will learn more about the employee referral program in the section.

Employee referral is a hiring technique that enables current employees to refer appropriate candidates for open positions in exchange for rewards.

The existing employees take the initiative to contact their relatives and friends and ease the work of the HR managers by suggesting a suitable match. You, in turn, can reward them with either financial or non-financial incentives.

Benefits of Employee Referrals

Here are the top benefits of employee referrals you must be aware of, though there are many:

• Top Candidates: Your existing employees will clearly be aware of the skills and expertise required for any one particular position within your company. This, therefore, will help them refer people who shall definitely fit the culture and needs of your organization. While they review their network and recommend the most suited candidates, you could reap an advantage of exquisite candidate pool selection.
• Cost Saving: Not only that, but recruitment has its costs along the way, too. The biggest costs always come up in the form of advertisements, bad hires, and agencies. Now, all those costs and more can be reduced, thanks to the use of employee referrals. You can then use the saved money to reward the employees for referring you to the best candidates.
• Faster Hiring: Moreover, it improves the overall hiring process and importantly makes it faster. There are a number of steps involved in filling a position, such as job advertisement, candidate sourcing, application evaluation, shortlisting of the best candidates, interviewing, and then recruiting. You can cut down many of the steps like job advertisement, candidate sourcing, application evaluation, and more through employee referral. That is to say that you will save a lot of time which can be utilized later on for other productive activities.
• Improve Staff Morale: Hiring new employees through a reference may let the process be carried out easily for both the employer and the new employees and may help improve the morale of the employees of a business organization.
• They may even, upon the employee''s referral, assess whether the candidate fits among them socially and culturally. This would reduce the occurrence of interpersonal conflicts in the long run.
• Needless to say, employee referrals boost the morale of the referrers also, since they feel their contribution is valuable to their workplace itself.

Though employee referral systems bring forward the quality of the new employees, this has several benefits, the HR managers or the employer face some challenges. In certain situations, the referred may not meet up to his / her expected level with respect to teamwork, productivity, and responsibility. You need to pay more attention to every referral''s skills and experience and accordingly appoint them.

How to Encourage Employee Referrals?

Just follow these simple steps:

1. Let Them Know About The Openings: To start the process of gathering employee referrals, you have to first inform and describe the need for referrals. Therefore, the very first thing you must do is to bring a list of open positions and a job description in front of your employees, and ask for any possible referrals. When employees are aware of and understand the job openings and the associated roles, they can easily leverage and evaluate their professional networks to make thoughtful referrals.
2. Let Them Contribute: In addition to communicating the needs of the organization, attempt to communicate the importance and benefits of employee referrals to encourage current employees to contribute to the process.
3. Many organizations out there have some sort of employee referral programs that pay off the referees to motivate them in the long term. You can also benefit from such programs. Apart from this, you must also appreciate the employees'' eagerness to refer good candidates to you.
4. Provide Feedback: Also, some of the referrals made may turn out to be irrelevant in the long run. In that connection, do not leave without leaving a message with the employee who referred the candidate informing them about the skills and experience primarily sought after. This helps them to understand the reasons some of their referrals were not chosen. This process is crucial to ensure that every employee feels included and needs to be valued.

This is all for now that you must know regarding employee referral. We hope now you have an idea about employee referrals and how to use them in the right manner to get maximum hiring results.

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