Twenty - four and a half
percent of external hires (people who were not already employees) were the result of employee referrals.
Because people place more trust in their peers than talking heads, it's no surprise that referrals are consistently reported as the No. 1
source of external hires in employer surveys.
According to the latest «Source of Hire» study from CareerXRoads, more than 27 percent
of external hires in America are from referrals.
Not only will you save money on recruiting costs, but according to a 2012 University of Pennsylvania Wharton School study, you'll also be able to pay up to 18 percent less for an internal promotion
instead of an external hire.
In his paper «Paying More to Get Less: The
Effects of External Hiring versus Internal Mobility,» Wharton School of Business Professor Matthew Bidwell found that workers promoted into jobs have significantly better performance and lower rates of voluntary and involuntary exit for the first two years than workers hired into similar jobs.
CareerXroads Sources of Hire study reports that the greatest
number of external hires (vs. promotions and transfers of existing exmployees, also known as «internal hires») came from employee referrals.
26.7 %
of external hires made by organizations came from referrals, making it the number one external source of hiring for the participating firms.
«Many recruiting managers with woefully under - performing programs think they have great programs and are somewhat shocked when they learn that, on average across all industries, 1:3 hires come from employee referral and that it is no longer uncommon for more than
half of all external hires to come from employee referral in organizations with leading talent management functions...»
According to a study done by CareerXRoads, more than 27 %
of external hires in America are from referrals.
So, if your organization doesn't have an Employee Referral Program (ERP) or has one that produces less than 30
percent of your external hires, you need to examine your referral program to determine why you are experiencing poor results.
Remember, referred candidates are the number one source
of external hires.
Hires attributed to job boards, on the other hand, only represent 13.2 %
of external hires.
According to CareerXRoad's 9th Annual Sources of Hire Study (Feb 2010, PDF) «Referrals make up 26.7 %
of all external hires (new employees hired from outside the organization).
According to the CareerXroads source of hiring study, 24.5 percent
of external hires (not internal transfers) were from employee referrals.
This was the number one source
of external hiring!
Just 18 percent
of external hires can be attributed to job boards, according to the recruiting site CareerXroads.
Employee referrals are most employers NUMBER ONE source
of external hires (not internal promotions).
In fact, about 30 %
of external hires are based on personal referrals.