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5 Myths about Employee Referral Hiring Debunked

Posted by Michael Bachman on Aug 29, 2018 2:26:00 PM

Employee referral hiring is a recruitment method plagued with misinformation. While the data regarding its ability to secure quality hires is irrefutable, there is still some bad press out there due to various poor experiences. So with this in mind we are going to clear the air on 5 myths currently circulating, and maybe preventing your employee referral program from truly taking off.

Myth #1 Diversity Killer

This is probably the number one myth being propagated regarding employee referrals. It's the idea that current employees will only refer individuals who are most “like them.” Like all myths this is born out of bits and pieces of data put together to tell a misinformed story. Your employees aren’t going to refer someone they consider unqualified for the job, while, at the same time, they’re not going to go out of their way to find someone who is just like them. I would even go one step further to say as a society we are friends, co-workers, and acquainted with those who are not always just like us.

Myth busted. If you want to learn more about diversity hiring and employee referral programs check out a previous blog post.

Myth #2 Only employees make good referrals

With this one we are bending the definition of the traditional employee referral to include those within an employee’s network. It all comes down to having the proper tools in place to encourage current employees to share information via their digital networks, capture referrals, all while being able to receive the credit. What this looks like is an employee sharing information via social networking to their friends, and then those friends being able to share that post as well (reaching 2nd degree of separation and so forth) until the right potential candidate clicks-through and applies.5_Myths_Debunked_Blog_image-1.jpg

Myth busted. Preferhired proves this myth to be untrue day in and day out. External referrers make up a significant portion of our marketplace and have referred candidates that have gone on to be hired.

Myth #3 Referred employee hires are the same as non-referred

Referred candidate or non-referred, no difference right? Wrong. Referred employees are less likely to be a retention risk and are more likely to have smoother recruiting and onboarding experiences. In fact studies show that on average, 47% of applicants hired from referrals stayed loyal to a company up to 3 years or more. Only 14% of applicants from job boards stayed the same length of time. It all comes down to the element of culture fit and feelings of belonging. Through the referral process they have already been identified by the best resource, the current employee, as someone they could see succeeding there. Then, once hired, they are way ahead of a normal hire with having established networks within, yielding a smoother transition.

Myth busted. For those who don’t already have an employee referral program because they aren’t sure of the benefits to the program -- look no more. Statistics don’t lie.

Myth #4 We don’t have time for enough engagement to keep our program alive.

The lack of employee engagement is the #1 killer to any employee referral program. Regardless of the bonus the general response from employees is apathetic if they’re not engaged. HR is already inundated with tasks that go well beyond an employee referral program, so finding a balance is hard, and most just simply say they don’t have time. This leads to the death of your program and the loss of high quality talent. However, you do have time.


Myth busted. Those who say they don't have time may simply be thinking too big when they start out or when they’re in the middle of the process. Here are a few suggestions to give you back that time: A) Automate the process. Send employees an email when a referred candidate applies, gets hired, and when the bonus is going to be paid out. B) Partner with other departments. Create standardized material and share it with department heads. After all, employee referral programs are a team effort. C) Use Preferhired (shameless plug, I know). Preferhired not only automates this process, but takes the burden of administrative work off your HR team while giving you access to the only referral marketplace out there. On top of all of that, it’s free to post a job and you only pay for success. Try us out.

Myth #5 Once a referral program is in place it runs itself.

This myth is where all good employee referral programs go to die. They start out with great interaction and promise, and then to only fizzle out due to poor administration. All it takes is one or two employees feeling like their referrals weren’t handled with respect, and the whole reputation of the program goes down the drain.

Myth busted. An employee referral program takes constant nurturing and time in order to make it successful. Employee referral programs are not self-driving. In order to create a program and make it last it’s important to dedicate the time and resources needed. The best way to know what resources you need is to create a plan beforehand.

There are several more myths behind employee referral programs out there, but the fact is they’re always going to be your best source of hire, they take a good amount of time and dedication, referred employees, whether internal or external, will always yield better results, but the biggest takeaway from this, is employee referral programs don’t harm diversity.

Topics: employee referrals

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