Finding the right talent in 2022 is expensive, time consuming, and often unsuccessful. Labor shortages, employee preference for remote work, and tough competition for talent all require strategy rather than reactivity in recruiting. And according to Aptitude Research, employers are planning to do just that, starting with employee referral programs.

Aptitude Research shows the benefits of employee referrals include engagement of both new hires and existing employees. They have the potential to reduce hiring time, improve quality of hire, and positively impact retention. But the research also shows that many employee referral programs fail.

According to the research, if referral programs are put in place but lack support and suffer from poor communication and low participation, they won’t be effective. Successful referral programs need support and they need to be aligned to talent acquisition strategy. There are things employers can do to ensure employee referral program success rather than failure.

Prioritize Employee Referrals

According to Zippia research, employee referrals result in more than one-third of all hires, cost less than other sources, and are rated by more than three-quarters of employers as the best source of qualified applicants. Companies that don’t utilize employee referrals, or don’t support and track referrals, are missing out on a huge opportunity for quality hiring. Prioritize employee referrals with support and tracking to improve recruiting strategy and hiring success.

Measure ROI on Referral Programs

Aptitude Research shows that most companies are not measuring the return on investment (ROI) of recruiting sources, including employee referral programs. Even though they’re spending more on talent acquisition and using multiple avenues for referrals, they aren’t tracking how their efforts are performing. Knowing how employee referrals are performing is important.

Spending on recruiting tools and services without measuring ROI leaves employers without the performance information they need to find out which avenues are the most effective. When your organization implements an employee referral program, tracking how referrals perform by the number of hires, time and cost to hire, and other important metrics helps with planning and improvements needed for hiring success.

Paper forms to submit referrals and manual tracking make the referral process cumbersome and slow. Optimize referral information to improve the referral experience for employees, candidates, and recruiters by automating the employee referral process. Use technology to track referral progress through applicant tracking systems and have information about referral sources' performance readily available.

Support Referral Programs with Excellent Communication

Aptitude reports that most referral programs fail to provide consistent successful results because they aren’t communicated well. Lagging referral programs fail for lack of awareness and when it’s difficult for employees to share openings with friends and colleagues. Promote employee referrals on company websites, career pages, and social media.

Provide links so employees can share jobs with their contacts and their social networks. Have seasonal communications about referral programs. Include games and contests to make referrals fun and interesting and memorable. Give recruiters additional ways to promote employee referral programs where possible, such as office signage, referral program flyers, or email marketing to employees.

Use Proactive Sourcing Rather Than Reactive

Aptitude Research shows that many employers are turning to proactive sourcing methods and away from reactive sourcing, and employee referrals are a big part of this. Recruiting as hiring needs surface, using the same job boards and LinkedIn methods, and hiring third-party recruiters isn’t enough in a tight labor market. Employers need to use sourcing with varied technology and automation to understand the most valuable sources. This helps build stronger talent pipelines and enables attracting more diverse talent.

Identifying and putting resources toward the most effective sourcing strategies like employee referrals is a strong success factor in recruiting. Even with continued investment in traditional sourcing channels, employee referrals are still the top source of hire. Aptitude reports that employee referrals have remained effective and economical in both strong and weak economies, with both competitive and slower job markets.

Create Engagement with Consistent Clear Communication

One of the big challenges Aptitude’s research found with employee referral programs was that they fail due to a lack of employee participation. They advise continuously engaging employees with communications about referral programs and embedding them in the overall recruiting strategy. The companies with the most successful employee referral programs implement key strategies for this.

Incentivize employees to refer qualified candidates with employee referral bonuses. Be sure to communicate how and where employees can participate. Aptitude reports that successful referral programs make employees aware of referrals and how to use them, align them with internal mobility, and integrate them with applicant tracking systems. Improving communication methods and content further boosts participation.

Aptitude Research shows that the number one reason referral programs fail is that employees don’t know about them or it’s too difficult to participate. Simple, straightforward communications about referral programs work best. Successful referral program communications include emails to recruiters, mobile quick links, information on career websites, and managers communicating referrals.

More Strategic Sourcing

Evaluate your employee referral program for more strategic sourcing. Increase referral program participation and success with improved communications, alignment to talent initiatives, using technology, and measuring effectiveness. It will boost candidate and employee experience, improve quality of hire, and reduce time to fill, as well as save money.