If you don’t do referral recruiting, you’re walking straight past a low-hanging fruit.
Why? Let me show you some stats:
- A whopping 29 percent of referrals turn into hires.
- Referral hires run with a company longer (46% stay over one year, 45% over two years.)
- Referrals generate 25% more profit than hires from other sources.
- With a referral program in place, you lightsaber the time-to-hire to 29 days (from 55).
Now—do you want to supercharge your recruiting machine? Crack on.
Referral Recruiting Defined
First things first. What is referral recruiting, and why is it any good?
Maciej Duszynski, a career expert at ResumeLab chimes in to explain:
It’s a recruitment strategy that encourages staffers to refer friends or family for open positions in your company. If done right, referral recruiting lets companies access hiring excellence.
Also, it makes employees feel pumped for referring friends or family.
Keep Employees in the Know
Here’s the thing: most employees kinda know what positions are open. They kinda know who might be a good fit.
Result? referral recruiting has the same effect as a fly on a windshield. But—you can flip things around. Here’s how:
- Create an internal page to help staffers see what roles open rolesOn that page, provide info about the openings to help employees decide if a referral is a good fit (e.g., list requirements). Also, list top reasons why you wouldn’t hire someone for a given role.
- Spotlight open positions at all-hands meetings and in the company newsletterRemind employees how to refer a friend and direct them to the internal page.
This strategy might seem as simple as Netscape and 56k modems. But—it works.
Tap into Employees’ Networks
Imagine if one successful hire could bring in two-three more solid candidates.
Wouldn’t it be nice?
Well—you don’t have to imagine. All it takes is to make lead generation part of onboarding. That’s what American property insurance company PURE does and they get a jaw-dropping 40-60% of hires through early referral.
Here’s how you can too:
- Sit down with a new hire to talk about referrals. Comb through their LinkedIn, GitHub, and Facebook profiles.
- Be ultra-specific.Before you mine the hire’s networks, ensure they understand who you’re looking. E.g., We’re looking for a [Paid Search Specialist (Google Adwords)] with [3+ years of experience] in [New York]. He must also be OK with [hardcore startup culture]. Do you know anyone like that?
- Extract the connection’s basic contact info. If you can’t find their email, go with the profile URL.
Now—you don’t have to limit yourself to onboarding only. Feel free to fish out referrals once or twice a year because people make new connections regularly.
Referral Bonus: Should It Stay or Go?
Here’s the problem: if you promise employees $1K for a referral, they won’t care if their friend or family member is a good fit. They’ll want the money.
And—if you don’t reward staffers for referrals at all, your referral program can run dry.
Solution? Offer incentives but don’t overemphasize them. Here’s how:
- Make a referral bonus small (g., $50), so staffers see it more as a thank you and less as a motivator.
- Pay the bonus for successful referral hires only.
Remember, if people feel they work at a great company, they’ll naturally want to intro others.
So—What Do You Think?
Do you use referral recruiting? Does it work for you? Is there anything you struggle with?
Drop me a line in the comments below. Let’s chat!