Posted August 27, 2014 by

Why Are Employee Referrals the Most Fruitful Way to Hire

Portrait of multi-cultural office standing in a lobby

Portrait of multi-cultural office standing in a lobby. Photo courtesy of Shutterstock.

Employee Referral is a simple internal recruitment method to interview and hire more employees through the referrals provided by their existing employees. The employees simply forward the résumé of a family member or friend who is looking for employment to the hiring department of the organisation. If their referral is selected, the employees receive a referral bonus. Employee referrals are few of the most cost effective ways of employee recruitment and the best means to build man power required by the organisation. With the growing number of dissatisfied employees and increased workforce attrition, it is becoming more and more essential for companies to hire quality employees that will stay and contribute to the business workflow. Listed below are the various benefits of employee referral schemes.

1.    More Productive Employees

With the increased demand for quality service and products, it has become important for companies to hire more skilled and productive employees. Research has shown that the employees who are hired through the various referral schemes are significantly better and more efficient than the ones hired through the other channels.

2.    More Culturally Fit Employees

The employees often tend to refer the candidates who are similar to themselves. This often eliminates the problems of cultural differences and leads to the hiring of employees who are more accustomed to the work environment. As the candidates who apply through other channels can be from any locality, or field of work, there are higher possibilities of them not being accustomed to the organisation’s work environment.

3.    Higher Source of Candidates

Employee referral schemes also provide the companies with the contacts of the people who are not actively searching for a job. There are several candidates who are not looking for a job, but when contacted by an organisation can turn into potential employees with the right skills. This leads to a higher generation of candidates and also improves the quality of the applicants.

4.    Lesser Number Of Non-Qualified Employees

Employee training after recruitment is one of the most expensive and time consuming processes. It is important that organisations maintain a healthy balance between the number of skilled and unskilled employees to limit the expenses on training. The employee referrals is said to produce a higher quality of employees and lowers the possibility for non qualified applicants to bulk up. This preliminary screening method not only saves time but also makes the hiring process more smooth and efficient.

5.   Less Burden on Management

Finding candidates through the employee’s social networks not only allows the company to save on advertising but also puts fewer burdens on the management. As there would be fewer unqualified candidates, so the management would have to take lesser amount of failed interviews resulting in fewer rejections.

6.    Morale Indicator

Employee referral schemes also work as a morale indicator for an organisation, as it also tends to focus on the employee satisfaction so that the employees would refer more and more candidates. If the employees don’t like their boss or the way the organisation functions, there are a few chances that they will ever refer any one from his social circle to apply for a job. The low number of employee referrals is indicative of the worker’s dissatisfaction and can be the base for reforms in the company’s workflow.

7.    Immediate Results

Referral programs are known for their cost effective and quick generation of applicants. With the growing unemployment and the demand for a more skilled workforce, employees are the best way of finding some quick leads and almost double the number of hires within a year. The referral bonuses are often lucrative and lead to a higher employee satisfaction.

If you are looking for a quick and easy way of generating more and more candidates to hire within your organisation, employee referral scheme is certainly the best tactic that you can opt. The abovementioned benefits are just few of the major pros of opting for employee referral schemes.

Author Bio:

Luke Peters is a keen reader of various books, magazines and other literature related to various topics like hiring, management, human resources, marketing and advertising. He is the current contributor for Findingitjobs.co.uk which is the best way to find IT Jobs in UK.

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