Phone a Friend: Why Employee Referrals Benefit Business

Good employees can be so hard to find. It’s not that they’re not out there. On the contrary, the job market is full of ready and willing workers begging for the opportunity to prove their worth if given the chance. The problem isn’t always a lack of workers or even a lack of job openings, but more that employers and job-seekers aren’t searching for one another in the same professional circles.

As a business owner, when you do hire a top-notch employee, you want to hold on to them, give them a workplace to be loyal to, and always strive to provide an environment worth the Monday morning commute. After all, you’ve established a company culture, and you want employees who mesh well with that mentality and have a professional work ethic.

So how do you find new employees who can maintain your company’s culture?

On the one hand, you could conduct a labor-intensive search (through ads, agencies, etc), interview a dozen hopefuls, and pray to the Better Business gods that your selected candidate is everything you want them to be. Or you could consult your top-notch employees. As fully functioning human beings, they probably have friends. Better yet, they probably have friends who share their core values and are also actively looking for employment.

Relying on your employees to refer quality people to your business can be one of your greatest assets. I am a testament to that, as I’m only writing this blog now, because my friend and fellow Newsletter Pro referred me to the open position. As a recent college grad, the job search was slow. When my friend told me The Newsletter Pro was looking for another writer, I decided to give it a shot. We’d worked well together several years prior, and I was honored to know she thought I would fit in with the rest of the company.

The employee referral method worked for me, but the numbers don’t lie either. According to professor of management at San Francisco State University, Dr. John Sullivan, employee retention after one year is 46% for employee referrals, double the rate of retention from employees found on job boards.

At its core, employee referrals are good for more than just quality recruitment. They are also a useful indicator of employee satisfaction. My friend-turned-co-worker never had a bad word to say about her job or her co-workers. She always spoke highly of the work she was doing, which only made me want to submit a resume that much more. If she’d ranted about how miserable she was even for a minute, I would not have been motivated to apply.

So here’s a tip: Next time you’re looking for someone to fill an open spot, start with input from your most trusted employees; you hired them for a reason.

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