What is referral?
referral, definition
Referral is a sourcing method that relies on company employees and their networks. As part of a referral recruitment strategy, the company asks its employees to recommend people in their personal or professional environment (friends, family, former colleagues, etc.) who are suitable for the position, in terms of their professional background, personality, values, etc.
Thanks to referral, recruiters receive applications from their own staff, which are often of higher quality than those received via other sourcing channels.
For example, Banque Populaire Auvergne Rhône Alpes, which has integrated referral into its sourcing methods, confirms the quality of the candidates it meets through cooptation by observing a transformation rate 10x higher than other channels.
For the recruiterIf you’re a company with one or more vacancies to fill, referral is the tool of choice. In fact, it’s a strategy that has become very common in the corporate world. By canvassing his colleagues and their networks, he will obtain qualified applications. In particular, he can be put in touch with profiles that are atypical, hard to reach or not necessarily in tune with the market.
Referral can also extend beyond the circle of employees. For example, the company can ask its customers, suppliers and former employees to recommend candidates.
For the collaborator-referrer For the employee-referrer, a referral enables them to be valued, included in the company’s strategy and involved in building the teams they will be working with.
For a candidate, areferral is a great opportunity, whether you’re open to new professional opportunities or not. You can be recommended to potential recruiters, or be informed of new opportunities (with job offers of which you were not necessarily aware).
The benefits of referral
1/ A complementary sourcing tool
Referral is a truly advantageous sourcing method for companies, since it can be added to the recruitment tools already in place internally. Referral allows companies to put all the chances on their side to hire THE right person. In this way, they can call on their employees’ networks to put them in touch with quality profiles that they wouldn’t necessarily have been able to reach via other channels.
2/ Quality candidates
Through referral, companies place trust at the heart of their recruitment processes. A recommendation is a commitment for both the person making it and the person receiving it!
Within companies, employees have a key role to play. When they recommend one of their contacts for a job, on the basis of his or her skills and know-how, they are making a commitment to their company and putting their credibility on the line.
On the other hand, a person recommended by an employee, who knows the company well, is more likely to share its values and match the requirements of the position.
In his white paper “The social referral”, recruitment specialist Bill Boorman reveals that 64% of recruiters believe that the best candidates come from referrals!
3/ Faster recruitment
Generally speaking, referral is a fast process that saves recruiters time. When an employee is approached for a job, he or she has a profile in mind that could be a good match within 48 to 72 hours.
On the other hand, rather than receiving dozens or even hundreds of applications via job boards (sometimes with CVs that don’t match the position), companies are put in touch with fewer but more qualified profiles. This reduces application processing time.
In his white paper “The social referral”, Bill Boorman estimates that on average :
10.4 referrals are enough to recruit 1 candidate. This can even be reduced to 7 recommendations for 1 recruitment, if the referral program is managed using a digital solution like Keycoopt System.
Companies save 80% of their time in the pre-selection stage alone.
4/ A practice with a high ROI !
Referral enables companies to recruit more economical recruitment because it’s a less time-consuming solution in terms of sourcing (recruiters don’t need to source candidates; it’s the employees who recommend them) and processing applications (the company receives fewer, higher-quality applications).
It’s also less expensive than a recruitment agency. Some companies, such as Caisse D’Epargne Côte d’Azur, manage to recruit 85% more cheaply than a recruitment agency.
Among users of the Keycoopt System solution ( referral and internal mobility software), we see the economic aspect of co-optation in a very significant way: with a 2 to 3-fold reduction in recruitment costs for our customers.
This is due in particular to the high conversion rate of referrals, which can be as high as 20-35%, i.e. the number of referrals received that lead to recruitment as a percentage.
5/ Fewer turnovers
The turnover rate in France has doubled in 20 years! In 2021, it will be 15% (INSEE figure) compared with 13.7% in 2013 (Hays Group figure).
Co-optation reduces turnover. In fact, 43% of candidates recruited through cooptation remain with the company for 3 years, compared with 14% of candidates recruited through job boards (source Bill Boorman).
Several reasons are cited: easier acculturation, better matching of recruited profiles, better integration….
6/ Open up to new profiles
Referral is also a factor of diversity. It enables a company to discover profiles with “atypical” backgrounds, or even to consider other candidates. These people may not have all the skills required for the position, but they may have “transferable” or “adaptable” skills, and therefore great potential. In a referral based recruitment strategy, candidates are also valued for their softskills and madskills.
7/ Developing the employer brand
Recruiters may not think of it at first glance, but referral is a powerful lever for developing the employer brand within companies. By involving their employees in the recruitment process, they become true ambassadors for their company.
This increases their sense of belonging tenfold. When an employee recommends someone they know to their own company, it’s because they appreciate the working environment and hope the person will join them.
In the same way, referral benefits the company’s image. In the long term, it becomes more attractive to new talent.
To find out everything you need to know about referral, the benefits, the keys to success… Here’s a guide to the essentials for getting started with this strategy:
Set up a referral program
More and more companies are setting up internal referral programs to recruit new talent.
While there’s no such thing as a standard model, there are some key elements to be aware of and take into account if you want your referral program to be a real recruitment lever.
Here are the steps you need to take to set up a referral program:
Step 1: Define whoho is concerned by the referral program
There are, of course, recruiters and company employees. It’s important, however, to define which employees can participate in the program: can interns, apprentices, fixed-term contract employees be recommended?
💡 Expert advice: don’t close any doors. The more diversity you have in your community of cooperators, the greater your chances of meeting candidates!
It is also possible toinclude thecorporate ecosystem to the referral program program customers, the suppliers, the alumni…
Step 2: Structuring the program
The success of a referral program depends on organization and structure. It’s vital to create common rules for the whole company, touse the same system or tool, and to avoid the pitfalls of the artisanal approach, with its loss of information, mistrust and misunderstanding due in particular to a lack of transparency.
Structuring your program makes it more effective and, above all, allows it to be deployed on a large scale, because it’s common and clear to everyone!
The key to this is the implementation of a dedicated digital referral tool. This harmonizes the program, makes it easy to distribute to all employees, regardless of geography, and above all, saves time for recruiters, who can manage the program from their usual tool (ATS, multi-distributor).
Stage 3:Communicating and coordinatingthe program
Once the rules of the program have been established and the choice of management tool for the referral program has been made, it’s essential to communicate and deploy a promotion strategy.
Indeed, to “live”, the program needs to be known by its users, through internal communication.
More than just being known and recognized, the program needs to be regularly reminded to employees: through active animation. En effet, pour perdurer dans le temps, iI est ensuite primordial de l’animer dans la durée, par le biais de :
- Referral challenge for example, during recruitment campaigns,
- Highlighting success stories and promoting referrers,
- Displayflyer, guide, video, events or conventions.
- E-mail communication,
- Prominence on the intranet or in the company newsletter, etc.
Step 4: Thanking referrers for their commitment
The referral program relies on employees (or even the company’s external ecosystem). It is essential to to recognize the commitment of referrers and thank them for their contribution to the company’s recruitment strategy.
To this end, thethe referralion is a key element of the program. It is paid to referrers who have made a recruitment possible thanks to their recommendation. This reward can also be a gift, a voucher, a points system, etc. There are many numerous possibilities in terms of referral reward.
To make sure you have everything you need to launch your referral program, here’sa checklist of the most important steps:
