Employee referrals boost employer brand

What employees say about their employer socially, defines the employer brand.

In this era of connection and communication, employees are a company’s best brand ambassadors. In the long-run, existing employees influence the quality of future talent coming into the system by means of employee referrals.

The People Connection: Referring and Engaged

Employees have access to a wider social circle therefore their referrals help build a stronger organisation by attracting, developing and retaining the best talent for the business.

According to Ashish Arora, ‎founder & managing director, HR Anexi, people respond to people, and that is why employee and candidate engagement builds a strong employer brand. When employees refer candidates to the company, they motivate and excite them by being transparent about the company culture, growth prospects and overall work environment. It serves as an incredible opportunity for organisations to communicate this through employee referrals.

“When an employee markets the job or the company to others, not only does the target see that the company has empowered the employee to bring in new talent, but it also indicates that this employee is engaged and loyal to this company,” advocated Anju Jain, Country HR Director, Caterpillar, India & ASEAN. All these put together help in creating a positive impression about the company.

Sharing a similar view, Dr. Anita Bandyopadhyay, director-corporate HR, Raymond Limited says, if an employee refers his friend or family s/he actually present the company as an employer of choice and make the employer brand stronger.

Adding to this, Anand Talwar, senior vice president and head – talent management, ITC Infotech comments that it is easy to gauge how good an employer brand is by understanding the sheer referral numbers that a company achieves in a year.

The Benefits: Better Quality and Improved Retention

In today’s time, hiring ‘quality talent’ and retaining ‘key talent’ are an HR manager’s biggest challenge. And, with an effective employee referral scheme, they can solve this problem without much effort.

Quality of a recruit is critical as the right quality and fit of an individual is directly proportional to the performance of the organisation. Conversions of profiles in initial screening phase are comparatively better in employee referrals than other channels. This helps in saving time, cost and effort for the recruiters, says Unmesh Pawar, Senior Vice President, Accenture India BPO.

“Attrition rate of employees hired through referrals is significantly lower than the other candidates.  Cost and hiring lead time is reduced by approximately 60% and employee engagement level increases too when we hire through referrals,” adds Poonam Gupta, Director, HR Services, APAC, Metso.

The Flip Side

• When employees refer candidates merely to collect a referral fee/reward, there could be trouble. Ideally, an organisation would want their employees to refer people because they believe in the company and its mission. If they are referring for any other reason, this could negatively impact the quality and of prospective employees.
• An employee’s social and professional network could be limited, with people of similar characteristics, experiences and personalities. Employees who refer people from these networks, could negatively impact an employer brand as it could compromise the diversity of the workforce.
• To avoid negative impact, referred candidates should not be interviewed by the same line manager who has referred him/ her. If he/she is a family member, then should not be in the same team or have any reporting relationship with the referral person. HR should not get any awards for referring

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