5 Smart Reasons to Hire Employee Referrals

Published by Fair Trade Outsourcing on

5 Smart Reasons to Hire Employee Referrals

Recruitment programs that reward employees for referring their friends as potential recruits are known to yield better results than other methods of talent acquisition. According to the research literature available online, companies prefer employee referrals compared to non-referred job applications, and here are five smart reasons why.

#1 Employee referrals stay longer with the company.

About 46% to 47% of employee referrals usually stay with a company for more than two years while only 14% of employees who were hired through job boards remained.

Research have also shown that referred employees perform better and persist longer at their jobs when they work directly with friends who recommended them to their employers. The results are the same for referred employees who were hired through recommendations of persons who were not affiliated with the company and placed in positions they were not originally referred to.

So, if you wanted to hire people whom you could retain longer at their jobs, then trust your employees to find them for you.

#2 Referrals from highly productive employees produce top quality talent.

Birds of a feather really tend to flock together, at least when it comes to choosing our friends and spouses. If you’d rather hire people with the same attitude, general intelligence, and educational level as your most productive employees, then ask the latter group for referrals.

This is why hiring managers would rather hire referrals for jobs that require cognitive skills and more nuanced work experiences.

In fact, most managers ask their employees for names from their previous companies. It’s not because their previous employer was a better recruiter. It’s because employees who perform well at their jobs tend to be friends with people who have the same values and behaviors as them.

#3 Referred employers report greater job satisfaction at work.

Referrals are generally happier at work compared to their non-referred colleagues. Reasons that managers commonly cite include skills that match job requirements and sociocultural fit with the company. As mentioned above, referrals tend to have the same attitudes and values as their referrers, and this contributes to their smoother integration into the workplace culture.

Because their skills and attitudes fit well with the company, referrals feel that they can do what they do best at their new jobs. And, this also contributes to their overall job satisfaction.

#4 The training and onboarding process is faster and less costly when you hire employee referrals.

Compared to internal hires and referrals from employees, the recruitment process for employees who were externally sourced requires “twice as many interviews and four times as many applicants to reach the interview stage.” More than 60% of employers and recruiters report that the hiring process is shorter for referrals, and it’s less expensive.

#5 You’re able to nurture a high level of trust and goodwill among your employees when you hire referrals.

Combine all the previous reasons why and you can immediately see a pattern of behavior that is ideal for nurturing positive relationships at work. In the context of team culture, friendship leads to a greater sense of trustworthiness in one another. Friction within a group is reduced and conflicts are easily resolved when there’s a clash of personalities.

Fears of hegemony and lack of diversity caused by employee referrals seem unfounded when research have shown that people do not necessarily choose their friends based on similarities in personality. Thus, diversity remains an achievable goal even when your company choose to hire referrals.

Whether employees became friends before or after they were hired seems irrelevant. As human beings, we’re known to thrive when we have daily social interactions compared to when we remain in isolation. In a fair trade call center like Rethink Staffing, creating a highly engaging work environment is crucial in retaining quality talent and producing superior results for clients.