The Benefits of Utilizing Employee Referrals in the Hiring Process

67 percent of employers found the recruiting process to be shorter when aided by referrals, with another 51 percent that said it was less expensive to recruit via referrals, according to recent data. The same data set found that referrals are often happy with their jobs and tend to stay longer at companies, with almost half (46 percent) staying over one year. Employee referrals are insanely successful time and time again, and for good reason. Easier, faster and less expensive are just some of the advantages to employee referrals. Social networking makes the act that much easier. Here’s ten reasons why your staffing agency needs to give employee referrals a shot.

  • Better candidate quality – An employee is only going to recommend someone for a job who isn’t going to make them look bad. That’s why it’s such a successful way to hire people. In addition, you’ll have a greater insight to their work habits and personality than you would for an anonymous applicant.
  • Speed to hire – Instead of posting to a job site, getting hundreds of applicants, weaving through them for interviews and then securing a hire, you can just ask for referrals. It’s so much easier and quicker.
  • Cost – Simply put, referrals are cheaper. It costs money to find employees. When you get referrals, you don’t have to worry about spending money advertising your job postings.
  • Quicker onboarding – A referral has probably been introduced to the values of an agency before the interview even starts. This leads to quick onboarding, due to the fact that they are already aware of what’s expected of them and how to move forward from there.
  • Improved retention – Referred employees are more prone to holding the same values as the one who referred them, making them a good fit for the agency. In turn, that employee is more invested in the agency This leads to improved retention during work.
  • Wider candidate pool – Long story short, employees have more access to contacts. When you utilize them, you’re opening up a whole new set of talent pools. You could easily reach tens of thousands of people, depending on the size or your staffing agency.
  • Morale boost – When workers are amongst peers, they are most comfortable. Referrals help boost the morale of an agency.
  • Counter negative reviews – There’s sites out there like GlassDoor where employees can rate your agency. It’s good to look out for those. A referral means that you’re getting to bypass those negative reviews.
  • Better candidate fit – Referred applicants are a lot likelier to hold the same values that your agency holds, with bad cultural fits getting weeded out in the recruitment process. Your employees will only refer people they know can do the job.
  • Appreciation for recruitment – If your employees can be involved in the hiring process, they’ll have a better appreciation for it. It’s a way to make your employees feel of value to the agency.

However, when utilizing employee referrals, keep in mind the potential liabilities. Hiring someone who comes recommended by one of your trusted team members can be a great thing, but you don’t want your agency or your client companies to be accused of nepotism or other favoritism in the hiring process. Make sure that your agency has a Staffing Insurance program in place to fully cover all aspects of the recruiting and hiring process.

About World Wide Specialty Programs

For the last 50 years, World Wide Specialty Programs has dedicated itself to providing the optimal products and solutions for the staffing industry. As the only insurance firm to be an ASA commercial liability partner, we are committed to that partnership and committed to using our knowledge of the industry to provide staffing firms with the best possible coverage. For more information about Staffing Professional Liability Insurance or any other coverage, we have available to protect your staffing business, give us a call at (800) 245-9653 to speak with one of our representatives.

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