Love is a mystery, as is hiring. The former: no comment. The latter: at least, given the rise of analytics and Big Data, is far more able to be quantified now that we can send in the Cloud and conjure up scopey benchmarks and juicy reports. But there’s no guarantee of success: will that brand new star on the 14th floor, lured with chunky compensation and incentives, want to actually stay? Tech talent has a 1.5 percent unemployment rate and competition is fierce for their hands. Bouncing out of one position with grass-is-greener fervor — and sometimes there is a lot more green; poaching up to the C-suite — is it any wonder we’re an anxious bunch?
Think about it: what makes people stay? Love. And money. And tribe. Retention can’t necessarily be bought without risk, but translate this into HR speak and you may well have your magic bullets, at least for the duration. So no more holding back. Perhaps we’ll find in the near future (parsed by analytics, no doubt conjured up by some promising young software brain) that there is one key phrase that keeps people and one key moment that is the straw that breaks the camel’s back. In the meantime, it surprises me is that we’re still asking if employee referrals are worth it, whether as a full-on, incentivized, company-wide programs or targeted to bring in high-value talent. So let me give you the top 3 ways they’re key right now (and we are exploring this topic more during this week’s #TChat, Why Sourcing Referrals Can Improve Retention.)
Old school is new school.
Retro is in. It sells jeans and artisanal chocolate. Retro gives a sense of substance. And there’s nothing more old school in terms of hiring practices than word of mouth. In a survey of the best practices among 300 top U.S. firms (the Inc. 5000), how to search for talent was a key issue. The top two highest ranked methods of finding new talent were co-worker and peer referrals (33%), and then referrals by others — customers, suppliers, and former colleagues (27%).
Given that in the new normal of work, everyone’s either a potential hire or a potential return, the second category is a close cousin of the first. And interestingly, next on the list was social media, e.g., sites like LinkedIn (15%).
Transitions are smoother.
The employee who made the referral not only gets to feel like a rock star, but gets to play unofficial mentor. Among the most-preferred methods to get new employees into the mix in that same survey — 48% said informal mentoring was the best way to get new hires acclimatized. The personal investment the employee has in their pal getting the job tends to bleed into wanting to see them thrive and succeed for obvious reasons: we shine in the light of those we stand closest to. From the employer standpoint, two more advantages: the employer brand is palpably represented during the entire process (and best of all, has a familiar face); and there may be a slight reduction in onboarding cost and investment.
The tribe is the glue.
The holy grail once known as company loyalty is far more subtle and social. We’ve all learned, and talent discussions tend to focus on the arm wrestle between company retention and a hire’s loyalty to her own career (it’s a trend). But there’s more on the mat than that. Corporations may indeed want to consider themselves people, but they’re not: the glue that binds us is a compelling admixture whose focal point is a sense of community — as well as culture and competition.
For the sake of argument, let’s accept that one aspect of career success is a perceived sense of a worthy tribe — in which one feels recognized and valued. Now, take another look at the value of an employee referral. Among hires brought in as employee referrals, 46% stayed at least three years. Compare that to job board hires, of which only a paltry 14% stayed that long. Again, it’s a win for everyone if incentives are part of the structure: that same employee who referred the new hire may well look at the bonus and go, “Hey, I think I may know a few more.” It reflects a sense of transparency and authenticity on the part of the company as well: we value people enough to put our money where our mission is.
Employee referrals are not even the cutting edge anymore: there are certain firms that now so value their talent that they pay them to hang out rather than see them depart. The emotional intelligence behind that is pretty sharp. But for those of us stuck on earth, with, you know, budgets, that’s not necessarily possible. But if indeed we’re going to follow the best practices of our leaders, there’s no downside. Employee referrals are just plain good for everybody in this world of work, and given its global, multigenerational, transitional state right now, that’s no small thing.
This article was written by Meghan M. Biro from Re-Imagining the World of Work and was legally licensed through the NewsCred publisher network.