Employee referrals are the number four priority for recruiting teams in 2023, according to Talent Board’s latest benchmark research. It’s not hard to understand why: 20% to 40% of all annual hires happen because of referrals.
Referrals not only bring new talent through the door but they also help companies hire qualified talent faster, reduce cost-per-hire, and boost employee retention (the tenure of referred talent typically lasts longer than that of non-referred talent). These are just some of the reasons so many employers invest in referral programs. But there’s one source of referrals these programs often overlook: job candidates.
While the bulk of referrals are made by employees, customers, and other brand champions, some come from job seekers who’ve had a positive candidate experience — i.e., they’ve been treated fairly and respectfully by a potential employer. Because of their positive experience, these candidates recommend the employer to friends and colleagues. Believe it or not, they do this even when they don’t get hired.
That’s right, rejected candidates can be source of referrals thanks to a positive candidate experience.
We’ve seen it again and again in our annual benchmark research. The more positive their experiences, the more likely candidates are to refer others. For example, among companies delivering the highest-rated candidate experiences last year, candidates’ willingness to refer others was 31% higher than it was for other companies. And nearly one-third of all the candidates we surveyed said they were still “extremely likely to refer others” following a positive experience, regardless of the fact that almost 90% of them did not get hired!
When you think about the sheer number of candidates that your company is going to have to reject over the course of a year, it’s pretty clear why you’d want to convert those people into advocates for your employer brand.
The most effective tactics for ensuring that rejected candidates become your advocates include:
- Providing consistent and timely communication across the candidate experience.
- Setting timely expectations about each stage and next steps of your recruiting process.
- Asking candidates for feedback and providing it to them at every stage of their journey with you — no matter how brief.
- Ensuring the highest level of perceived fairness in your applications, interviews, assessments, and selection processes.
While referrals are critically important to employers, many have a hard time quantifying the business impact of losing or gaining referrals — an insight that would be most helpful. As a result, Talent Board is working on launching a referral revenue impact calculator later this year. So be on the lookout for it!
You can read more about importance and power of referrals in our complete 2022 benchmark research report. You can also learn more about and participate in our 2023 benchmark research program here.
Be safe and well.
