82% of employers indicate referrals generate the best ROI.
A referral candidate is 4X more likely to be hired.
45% of referrals stay with the company for 4+ years. (Compared to 25% sourced from job boards, who stay 2+ years.)
Organizations see an average savings of $7,500 per hired employee through productivity and sourcing.
Though it’s important to use all the tools available to you, consider this:
Sign-on bonuses increase your cost-per-hire.
Referral bonuses decrease your cost-per-hire.
With this in mind, employee referrals are an even more valuable tool and are worth the initial time and effort to develop a program focused on this candidate pool. How do you create an effective employee referral program?
Keep it simple.
Market the program, and market it often.
Prioritize referred candidates and respond to all referrals.
Recognize people for successful hires.
Your current employees make the best brand ambassadors, and by offering incentives for employee referrals, you not only make them stronger and more satisfied brand ambassadors—you also foster a company culture that strengthens retention. Here are a few basics on how to incentivize employees to refer their friends, family, and other qualified candidates:
Consistently communicate program updates, incentives, and recognition.
Any referral that is submitted or interviews receives some type of acknowledgement or reward.
For every referral that interviews, the reward can be as simple as a $20 gift card for coffee or lunch.
Provide 1/3 of any reward upon hire and the other 2/3 after the referred employee has been with the company for at least 60 days.
2022 average cash value for a hired and retained referral is $1,500-$2,000.
Motivate with non-cash rewards, such as recognition, paid time off, a larger giveaway, or desirable company swag.
Here's a simple sample program to get you started:
$300 upon hire + ½ day of PTO
$700 upon 60 days + entry into annual giveaway
Annual giveaway: company paid weekend resort stay or applicable vacation
Source2 has decades of experience in recruiting and retention, as well as success in the volatile market of the last two years, and we can help with wage analysis, brand positioning, and recruiting on the right channels with the right content to help find the essential employees you need. For more information on how we can specifically help your organization, we encourage you to connect with us directly for a conversation at email@example.com.