Employee referrals are one of the most effective ways to fill job openings. Not only do you have the opportunity to add quality members to your team, but you also reduce the time and money your company spends to recruit top talent. Because you surround yourself with like-minded individuals, your employer knows you are sending talented people their way. With the money saved on recruiting, you may receive a bonus for referring a new hire.
Here are three ways providing an employee referral can benefit you and your employer.
Influence Hiring Decisions
Referring a friend means you have an impact on who gets hired at your company. Because you want to work with people you like and trust, referring family, friends, former colleagues, and acquaintances who are qualified for a role helps reach your goal. If a member of your network is hired, you gain credibility as a referral source. Since you already know the person, you can help them get to know others on the team to increase cohesion and collaboration. As the new hire gets acclimated to their role and begins producing, your team moves forward. This makes you an even more valuable member of the team.
Save Time and Money
Referring a friend reduces the time and money needed to recruit a qualified candidate. Whereas a typical hire can cost $4,000 to $18,000, a referral may cost $1,000. This is because, with a typical hire, your employer writes and pays for job postings. When you send candidates to your company, there is no cost. Whereas a study conducted by Jobvite shows it takes an average of 39 days to hire a candidate through a job posting and an average of 55 days to hire through a career site, it takes an average of 29 days to hire a referral. When you refer a member of your network, they often require fewer interviews and less screening than other candidates.
Referring a friend reduces the amount of time needed for onboarding. Because you have a personal relationship with the new hire, they already have a basic understanding of the business and company culture. You can introduce them to coworkers to start conversations, find commonalities, and build relationships. Your referral can come to you with questions and concerns when needed. These actions make it easier for your referral to acclimate to the position, team, and company. They also are more likely to remain with the organization longer because they know someone who works there.