How are Employee Referrals a Reflection of Your Employer Brand?

August 22, 2017 by Alina

Companies devote a huge part of their resources towards conveying their employer brand. A lot of effort goes into setting a decent track record and communicating a compelling narrative that convinces job-seekers to consider the company as their future career nest. It’s quickly becoming common knowledge that Talent Acquisition is not as much about selling jobs as it is about conveying an employment story. This makes it critical to deliver components that quickly resonate your corporate values whenever someone considers your company for a job and no one delivers a more impactful gist than the employees.

A candidate’s decision-making process

To gain some perspective, let’s first consider the process that a potential employee undertakes to secure a job. Turns out that when selecting future employers, they act a lot like consumers. According to a research by Glassdoor, 61% candidates assess a company’s profile based on reviews and ratings before even choosing to apply. This sweeping majority shows how important a role word-of-mouth plays in attracting good candidates to a vacancy. It’s also important to note that a company’s own word does not count here which reinforces the key role that employees play in advancing the cause.

If you’re not taking good care of your employees, the news can spread like wildfire and it can quickly undo all the effort invested in constructing an employer brand. With 69% candidates saying that they would not take up a job with a poorly reputed company even under current employment, it’s quite clear that the stakes are high and your employees need to act as ambassadors.

An employee’s experience

When work consumes over 9 hours of a person’s day, it’s natural for their conversations to be anchored around it. We all go back to our friends and family to discuss how our day went which either explicitly or implicitly conveys the perceptions we hold about our employer. Similarly, when we participate in a corporate entertainment activity, we’re also likely to share that experience on social media through a quick photo. All these unintentional practices contribute to building their employer’s persona for that employee’s personal network.

Some more intentional practices take the form of a review that an employee gives to their employer on a review site, a testimonial that they allow the company to publish and most importantly, the words they say to their very personal network about a job opening in the company. We’re talking about employee referrals which make up for the top source of hire by volume, cost and time.

Why you should care

We’ve already established a few things:

  • You’ve invested in employer branding to build and maintain a fantastic team
  • Future employees pay most attention to your company’s reputation as an employer based on people’s hard experience
  • Your employees naturally convey their employment experience on a regular basis

It is strikingly clear what should follow: convert your employees into your employer brand ambassadors so they contribute to your talent pool by pulling their best references to the company through their work experience stories. It sounds great in theory and is even better in practice. Here’s why:

They dramatically reduce time-to and cost-of hiring

Compared to other sourcing tactics, referrals are 5 times more likely to be hired and they also start work 29 days earlier. Since they know someone in the company that they trust, it is easier for them to resolve queries that influence their decision to take up the job offer which hastens the entire hiring and onboarding process.

For similar reasons, you save a lot of money hiring referrals. Since they were sourced through employees directly, you save on a paid ad on job boards and recruitment agencies. Additionally, with reduced time-to-hire, you also end up saving on internal labor costs. According to Recruiter, Employee Referral Programs can save organizations approximately $3,000 per hire.

They exhibit higher culture fit

Your company’s culture is more than some quotes pasted on office desks which is why it’s crucial to preserve it. A study by Columbia University concluded that organizations with a rich culture experienced less than 14% employee turnover, compared to 48% for their counterparts with poor organizational culture.

The strongest benefit of referrals is that the candidates are already vetted by your employees who are well versed with your organization’s culture. This increases the chances that they bring in people whose strengths and weaknesses are better aligned with the goals of the company. On the flip side, when the candidate has had a glimpse into your corporate culture through your employee, they will better also prepare themselves for the role they plan to take up.

They exhibit higher job satisfaction and stay longer

It’s intuitive that when an employee finds a high cultural fit, they tend to be more satisfied with their jobs and exhibit higher retention rates. Companies that use Employee Referral Programs experience a 46% retention rate compared to 33% for those that don’t have such programs in place. Interestingly, the boost in overall employee job satisfaction and retention scores for these companies comes from both sides. Those hired through referrals tend to stay with the organization longer and those who refer personal connections for their company’s jobs also hold their jobs at the company for much longer than non-referees.

Bottom Line

Blowing your own horn is rarely a classy move which is why companies are shifting away from self-promotion to more implicit ways of delivering their employer branding message. Employee stories, testimonials, and referral programs have shown immense results which make them a formidable source of talent acquisition. So, when devising your Employee Referral Program, it’s important to understand that it is more of a strategic decision than a savings initiative. The benefits that it affords you, drive the motivations of a strong and productive team which organically feeds and nurtures your employer brand. Much like that of bees and flora, it’s a beautiful symbiotic relationship.

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