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Why You Should Focus on Referral Hiring Especially for High Turnover Roles

Posted by Michael Bachman on Jul 26, 2017 10:45:00 AM

For certain industries high-turnover is the nature of the beast. Staff can be transient, the competition steep due to high demand of a specific skill-set, or the roles needing filled are challenging and simply prone to a high burnout rate. While for these industries retention struggles are expected, for others, poor retention can be a symptom of a hiring process that isn’t addressing organizational fit. This is a major problem as a poor hire can become toxic and costly to a work environment. Not to mention, the added cost of refilling the position time and time again.

It therefore becomes the responsibility of the talent acquisition team (in all industries) to develop hiring strategies that can yield better retention figures, and keep recruiting cost down. As a result, resources have been dedicated and research done to crack the code on hiring for retention.

The good news for us is that the results have been tallied and the answer is in: more employee referrals.

Better Fit

Studies show that on average, 47% of applicants hired from referrals stayed loyal to a company up for 3 years or more. Only 14% of applicants from job boards stayed the same length of time ( This doesn’t come as a huge shock when considering that the recommendation for that person to join the organization came from someone already deep in the trenches. No one would purposefully refer someone they think would fail in the environment, as they are putting their own reputation on the line in the process. Additionally, if they are referring them it means that individual is someone they could see themselves working well with, creating stronger synergies.

People Stay for People

When discussing classic factors in retention, the idea of workplace community always comes up. The fact that if people have a strong network of work associates that they feel connected to, they're slower to start looking around. By having a new associate come in via a referral, there is already a pre-existing relationship they can draw on to settle in quickly and feel comfortable within the organization.

Employee Satisfaction & Buy-in

This is all about creating buy-in within an organization. Individuals often feel valuable and respected if they can have a direct influence on a major decision or process. Hiring a new associate or team member certainly qualifies as one of those big decisions. By creating a culture of referral hiring, you are saying to your employees that you trust them by putting them in the driver's seat of who we consider and who comes through that door. The cherry on top of this situation is the financial benefits received by the person making the referral. A little extra cash can go a long way to creating some office feel-good.  

Faster Onboarding

On average, applicants hired from a referral begin their position in 29 days vs. 39 from job boards and 55 from career sites. This means a couple great things for your organization. First, that’s nearly a month's difference in having a position vacant and accruing all the associated expenses. Second, in a hot talent market, or one that you simply expect a lot of movement, that is more value added time you have with that individual than you may have otherwise received.

Employer Brand Boost

Employer brand is promoted multiple ways through employee referrals. One way, is the fact that your employees feel good enough about the organization to recommend it to others. This goes far when establishing trust with the market place. Another way, is that since referrals are known for having a smoother hiring and onboarding process, there is less risk of creating negative press about your hiring practices. Lastly, when positions are filled via referrals rather than public postings a sense of exclusivity is created. Your organization becomes one that is perceived as being so desirable you need to be referred to get in. 

These are a few ways referral hiring can have a strong positive effect on your retention strategies and recruitment budgets. Be advised though, a lot has changed in the past few years as far as HR tech available to develop these programs. Prior to dusting off that employee referral campaign from 2005, check out some of the modern and mobile tools out there to make your job that much easier.


Topics: high volume recruiting, referral hiring

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