What exactly is meant by an employee referral? When an organization is looking for a potential candidate, they resort to using an internal recruitment process where their employees introduce prospective recruits from people they may know. Employee referrals are becoming very common in businesses nowadays. Not only does research prove that employee referrals are a cheaper, faster, and more efficient way to hire, they generally reduce turnover rates. So why are employee referrals a great way to hire? Akhtaboot has the answers to your questions below:
First of all, it’s faster
Employees know exactly what the company is looking for; so referred candidates are already pre-screened. Employees wouldn’t want to risk their position with an unsuccessful hire, so they think thoroughly before referring a specific candidate. Employees are also aware of all the qualities that would make their referral the perfect fit for the position. Rather than receiving and screening through multiple CVs, employee referrals cut your time short, and also reduce labor costs.
It increases morale
Candidates who are referred usually have to learn about the company, the policies and the culture. These candidates will feel a sense of loyalty to the team and office, which boosts their morale and assurance especially since they might know at least one other person at the office. A referred hire who feels good about their smooth hiring process usually stays longer at the job in comparison to a traditional hire. Usually an employee referral prevents having “mismatched expectations” which ensures that those who are hired through this method will succeed at their job.
It’s also cheaper
When you save time, you save money. It’s usually cheaper to hire a referred candidate, since other recruiting costs such as job advertisements are cut short. Screening and selecting candidates can be quite costly; sometimes they’re even outsourced to other third party organizations. When you market via word of mouth, it barely costs you anything, so employee referrals are predominantly a cheap way to find real talent.