Employer referrals remain a key way to hire and retain talent
- SilkRoad, a global talent activation firm, says employee referrals remain the largest source of new hires. The company’s annual report, Sources of Hire 2017: Where the Candidate Journey Begins, showed that referrals brought in 30% of new hires, and that 45% of hires were internal referrals. Researchers analyzed aggregated data from 1,000 small, midsize and large organizations.
- According to the report, external sources of candidates were less efficient than inside sources, requiring twice as many interviews and four times as many applicants to reach the interview stage.
- Indeed brought in the largest number of hires (65.3%), more than twice as many hires compared to other sources. CareerBuilder came in second (10.7%), the report showed.
Recruiters often prefer internal job referrals. Some employers even offer workers incentives for referring candidates. Employees can be reliable, trustworthy referral sources. They’re already on staff and therefore know their organizations well, in many cases. They also can vouch for a potential hire they personally know and consider a good fit for the organization.
Employers might do well to develop employees as referral sources. First, they need to get employees’ buy-in. Enlisting employees’ help is more likely to happen when employers engage them, recognize their achievements, reward their performance and value their input.
An iCMS study showed that employee referrals increased hiring quality and cultural fit while decreasing hiring costs, improving the entire recruitment process and turnover rates. The study also showed that 50% of referred employees stayed in their positions, on average, five years.