HR Glossary

Employee Referral Program

What is an Employee Referral Program?

An Employee Referral Program (ERP) is a system through which current employees can refer friends or family members for open positions within their company. Referred employees may be given preferential treatment during the hiring process, such as being interviewed first or given a job offer before other applicants. ERPs can be a great way to find qualified candidates, as employees are typically more likely to refer someone they know is a good fit for the job. They can also help to build a sense of community within a company, as employees feel invested in the success of their friends and family members.

What are the benefits of an Employee Referral Program?

There are many benefits to implementing an Employee Referral Program (ERP), including:

  1. Reduced recruitment costs – According to a study by Jobvite, referred employees are 45% more likely to be retained by a company than employees who are not referred. This is likely due to the fact that referred employees are already familiar with the company and its culture, which can save the company time and money in the recruitment process.
  2. Increased employee engagement – When employees are given the opportunity to recommend friends or family members for open positions, they are more likely to feel engaged and invested in the company. This can lead to increased productivity and loyalty among employees.
  3. Increased diversity – Employee referral programs can help to increase diversity within a company by encouraging employees to recommend qualified candidates from all backgrounds. This can help to create a more inclusive and diverse workplace.
  4. Increased morale – When employees feel that they are a part of the recruitment process and that their input is valued, they are more likely to have a positive attitude about the company and its employees. This can lead to increased morale and productivity.

Who uses an Employee Referral Program?

Employee referral programs are popular among human resources professionals because they are an effective way to find qualified candidates. Employee referral programs allow current employees to recommend qualified friends or family members for open positions within the company. The program can be as simple as giving employees a form to fill out with the candidate’s name and contact information, or it can be a more sophisticated process that includes screening and interviewing candidates who are referred. Employee referral programs are used by a variety of companies, from small businesses to large corporations. They are an especially popular way to find candidates for positions that are difficult to fill, such as those that require a specific skill set or in-demand experience.

How do you build an Employee Referral Program?

An Employee Referral Program is a great way to find quality employees. The process of building an Employee Referral Program is as follows:

  1. Define the program’s purpose.
  2. Outline the program’s guidelines.
  3. Create an advertising campaign.
  4. Train employees on how to refer qualified candidates.
  5. Evaluate and modify the program as necessary.

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