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Employee referrals more likely to result in successful hires

Sourcing candidates through employee referrals is more likely to lead to a successful job match, according to research from employment review website Glassdoor.

The research found that employee referrals boost the odds of this by between 2.6% and 6.6%. However, this method of recruitment was only encountered by 10% of the 116,000 people surveyed.

The method least likely to result in a job match was using interviews based on college or university referrals, which resulted in a decreased success rate of between -13.5% and -17.9%.

Employers in the technology, consulting and finance sectors rely most heavily on employee referrals. Government, retail and food service, and energy and transportation employers use employee referrals the least often.

Collette Huckle, UK brand manager for recruitment consultant Reed, said that employers should think creatively about sourcing referrals, through social media for example. “Referrals come in a much wider network now,” she said. “It’s not just immediate friends and former colleagues; it’s shared through Twitter, through Facebook or LinkedIn. There’s plenty of diversity in networks that large.

“Referrals are more effective in some industries than others. For example, they are particularly good in social care and education. In a candidate driven marketplace you see referrals being used more often.”

Lee Biggins, founder and managing director of CV-Library, told HR magazine that there are both benefits and drawbacks to using referrals. “A personal recommendation from a colleague can be very valuable when identifying new talent, not to mention the elimination of the usual recruitment costs,” he said. “However, it’s important to remember that while referrals can be an effective hiring tool they should not be your only hiring tool, and should instead form part of your broader recruitment plan.

“Depending solely on referral schemes may actually lead to HR professionals missing out on the best candidates. Even employees with the largest list of social contacts won’t always be connected to all emerging and existing talent in the sector.”

Biggins also warned that relying on referrals could stifle diversity within a business. “Quite often people are connected to other professionals with similar skills and qualities to themselves, meaning HR specialists that depend on referrals run the risk of employing staff with similar skillsets rather than diversifying the talent pool.

“By complementing referral schemes with your own searches and other recruitment methods you’ll ensure you cover all avenues and don’t miss that potentially important candidate.”