Did you know that employee referrals have become the most valued tool in hiring?
When I wrote this post in 2014, I had just returned from speaking at the Career Thought Leaders Conference in Baltimore. The theme of the conference was “Framing the Future”. A common theme throughout many of the presentations was that employee referrals are golden.
I wrote extensively about the value of employee referrals in my Targeted Job Search series on this blog. I wrote about continuously building your referral network so that you stay employed at companies where you want to work.
Employee Referrals – The numbers don’t lie!
Gerry Crispin co-founded a nonprofit, TalentBoard, to better define and measure the Candidate Experience. In his presentation, he presented some startling numbers on hiring and the effect of employee referrals that came from the Candidate Experience Award.
The Cande Awards process is a competition, but it is also designed to provide every organization that chooses to participate some confidential and specific feedback on how they can improve their candidate experience.
Gerry gave the following typical example:
- 180 applications for every open position
- 4 employee referrals will be submitted
Approximately, half of all candidates are screened out or deemed unqualified for the position which leaves:
- 90 applications
- 2 employee referrals
5 candidates will be interviewed including the 2 employee referrals.
The numbers do not lie. If you apply and an employee referred you for the position, 50% chance of getting an interview and you have a 20% chance of getting hired.
If you do not have an employee referral, you have a 3% chance of getting an interview and only 1.2% chance of getting hired.
What this should tell you is that employee referrals are invaluable!
Note: These numbers are 4 years old. The numbers of applicants have increased every year so if you do not have an employee referral your odds have decreased.
The Employee Referrals Bonus
Employee referral bonuses have become common in a lot of corporations. Bonuses are paid if the employee refers the candidate before the candidate applies and the candidate is hired. Therefore, before you apply for a job online seek out a referral!
In 2009, in the depth of the recession, I was working for a sexy tech startup…and we were hiring. I had more candidates from the Launch Pad Job Club, where I serve on the board of directors, asking me to submit their resume. My first question was always:
Have you applied online?
The answer almost every time was:
My response every time was:
Next time, please send me your resume first and only apply when I tell you.
When to Apply
Due to the fact that they already applied, I was not eligible for the bonus and their application would not be seen as an employee referral. Not every employee referral program works this way, but most do.
I was more than willing to work for these candidates because of my position with the job club. Money was not what motivated me to help. Of the almost 100 resumes I received that year, and only one sent it to me first. As you could imagine, I received a $2500 bonus for that position but none of the other 99 were hired.
Whenever you find a position, work diligently to find a connection. If you are not sure how go back and read the following posts:
- Building your Target List – The Targeted Job Search
- Connecting with Recruiters – The Targeted Job Search
- Build Your Referral Network – The Targeted Job Search
After you have found someone who is willing to make a referral, ask how you should proceed. They may tell you:
- To apply online and fill in the field for the employee referral on the application. Many major employers now have a field on the application for referrals.
- Send them your resume and they will take it directly to the hiring manager. Customize your resume using JobScan to compare your resume to the job description. If this is the case DO NOT apply until they tell you to apply.
When you do apply online, only apply to one job that you are the best fit for.
Risk Mitigation in the Hiring Process
The employee referral has become the most reliable method for hiring. It is all about risk mitigation in the hiring process. The two safest hires are:
- An internal candidate
- An external candidate with an employee referral
These two types of hires make up a huge percentage of all hiring. My guess is it is over 90% because internal hires are often never publicized.
When I entered the job market in the 1970’s the average person stayed with a company for 10 or more years. In 2016, the average employment tenure for men in the U.S. is 4.3 years. There is a lot more hiring today than ever before.
If you want to boost your chance to get hired, work diligently on building your referral network.
To read the rest of the Targeted Job Search series click here.