What’s the Top Source of New Hires?
The War for Talent shows no signs of slowing down. Record-low unemployment has created a recruiting environment in which qualified, dedicated workers are hard to find and even harder to recruit. For HR and recruiting professionals, this means major headaches when it comes to filling open positions, stemming employee turnover, and supporting engaged and enthusiastic teams.
New data collected by Chicago talent management company SilkRoad points the way for companies seeking to survive and thrive under these difficult conditions. The Sources of Hire Report reveals which sources are leading to success in talent acquisition. Based on “more than 14 million applications, 655,000 interviews and 329,000 hires” (as the Society for Human Resource Management reports), the SilkRoad study is the most up-to-date, comprehensive picture of the recruiting climate.
We recently sat down with JobShakers CEO Kevin Fryer to discuss these findings and what they mean for today’s recruiters.
Employee Referrals are the Top Source-of-Hire
The Sources of Hire Report reveals that employee referrals lead among internal sources of hire, which also include in-house recruiters and career sites. In 2016, they found, referrals provided over 30 percent of hires overall and 45 percent of internal hires, followed by internal moves (which provided 21 percent) and recruiter-sourced hires (19 percent). Among external sources such as job search engines, recruiting site Indeed was found to be the most successful, yet it still trails behind employee referrals at under 30 percent of total hires.
Is Fryer surprised by this? “Not at all,” he remarks. “The team at JobShakers understands the power of employee referrals and their ability to produce culture-matched, qualified candidates who ultimately succeed at filling open positions. We know that existing employees are able to provide great insight into what their company needs from new talent and leverage their network of contacts to assist HR departments in hiring exceptional employees.”
[Related Insight: The JobShakers Strategy for Attracting Exceptional Employees]
“Yet,” Fryer says, “employee referrals are underutilized by almost every company.” The SilkRoad data backs this up. As SHRM reports, “Even though studies consistently show that employee referrals improve quality-of-hire and retention rates while lowering hiring costs, they are still underutilized.”
An Underutilized Source-of-Hire
Tim Sackett, president of HRU Technical Resources, notes that “most organizations spend the least amount of money marketing and automating their referral program than any other single source they have… Yet, it’s their No. 1 source and their No. 1 quality-of-hire source.” The bulk of recruiting budgets often goes to external recruiting sites such as Indeed, LinkedIn, and CareerBuilder, which generate more interviews than employee referrals but fewer actual hires. Why is this the case?
[Related Insight: Do Your Recruiting Methods Prioritize Quantity or Quality?]
Recruiters often see the initial numbers as indicative of final results, which gives an incomplete picture of the sources that lead to success. While external sources may result in greater numbers of candidates and interviews, “It takes four times as many applications from external sources to get to the interview stage and twice as many interviews for a job offer,” data from the Sources of Hire report reveals. Ultimately, “Internal sources… produced 52 percent of hires in 2016, compared to 48 percent from external sources.” Savvy recruiters should prioritize quality over quantity when it comes to the methods they embrace.
An Innovative Approach to Employee Referrals
Why do companies continue to underutilize employee referrals? “I think many companies have an outdated understanding of the employee referral process,” Fryer reflects, “they feel like it creates a lot of paperwork and extra effort from HR departments, which is no longer the case.” Today, innovative referral platforms like JobShakers are making it easier than ever to develop a thriving employee referral program and keep recruiting pipelines stocked with qualified candidates.
At JobShakers, “we’ve created a solution that does the heavy lifting for HR and recruiters,” Fryer says, “so they can focus their time and energy on placing referred candidates in open positions instead of overseeing every detail of the referral process. Our mobile platform makes it easy and intuitive for employees to make a referral, which generates an online application that a referred candidate can fill out from their phone. Then, automated messaging keeps the candidate in the loop without requiring extra effort from HR.”
HR and recruiters will be glad to know that JobShakers provides built-in resources for employee adoption and engagement, so referral programs start off strong and stay productive and active over the long term. Additionally, the platform includes data tracking that makes it simple to establish metrics and measure the program’s success.
“We’ve revolutionized the employee referral program with a mobile, social approach that aligns with today’s tech-savvy, interconnected talent networks. There’s just no excuse anymore for companies to underutilize their most valuable resource – their people,” Fryer concludes.