Turn your ex-employees into your own referral network
Employee Referrals Statistics
If there’s one thing that recruiters and hiring managers agree on is that we all love referrals when it comes to hiring for full-time positions.
Some statistics about employee referrals:
- 63% of recruiters say talent shortage is their biggest problem.
- 76% percent of hiring managers admit attracting the right job candidates is their greatest challenge.
- 70% of the global workforce is made up of passive talent who aren’t actively job searching, and the remaining 30% are active job seekers.
- Referred candidates are 2.6% to 6.6% more likely to accept job offers
- 45% of referral hires stay longer than four years, compared to only 25% of job board hires.
- Using referrals increases retention by 40%.
- Referred hires stay 70% longer than other employees.
- Hiring referrals reduces company turnover by up to 20%
- 88% of employers rate employee referrals as the best return on investment (ROI) for sourcing talent.
- Referral employees are 25% more profitable.
- 70% of businesses agree that referrals have the best culture fit for their company.
- Companies can have a talent pool that’s 10x bigger by gaining referrals through their employees’ networks.
- The average employee referral takes 13+ days less to hire.
- The cost-per-hire of employee referrals is $1,000 less on average than other hiring sources.
- The average employee referral bonus is $2,500.
- 69% of companies offer $1,000-$5,000 for an employee referral.
Talent teams rank employee referrals as the most important source of hire, while third-party sources (agency, consulting firm, talent marketplaces) are the least important.
Companies can expand their talent pool by 10x by recruiting through their employees’ networks. But what about their ex-employees?
How many ex-employees do you have?
- On average, every year, a company will experience 18% turnover in its workforce
- Average annual workforce growth in the business and financial industry is 7% per year
- Millennials and Gen-Z move jobs every 2.9 years, while the average is 4.1 years
- According to Dunbar’s number, we can estimate that each employee has about 150 connections in their immediate network.
- To simplify, let’s assume each employee’s effective referral network is about 15 connections at a time
Let’s do some math and see how many ex-employees companies have. To simplify, we assume that the number of employees does not grow, (but it does!).
- After 10 years of operations, SMBs have about 18 ex-employees and an effective referral network of 270 members.
- After 20 years of operations, SMBs have about 36 ex-employees and an effective referral network of 540 members.
- After 30 years of operations, SMBs have about 72 ex-employees and an effective referral network of 1,080 members.
- After one lay-off, Facebook has about 11,000 ex-employees and an effective referral network of 165,000 members.
Exit Interview, Handover, Farewell Party, Now What?
To keep ex-employee engaged, stay in touch. They not only have their existing network you can tap into for job referrals, but over time they can become your advocate and ambassadors, bringing in deals, investments and good reputation.
To keep your ex-employee engaged:
- Encourage them to send a farewell message with an invitation to connect on LinkedIn and their personal email contact
- Keep a record of these emails and regularly share with them important news and invitation to events and parties
- Work with us at Whire to invite them to become Hiring Ambassadors on whire.net, allowing them to track your job posts, refer ideal candidates, and get fairly rewarded.
Keep Your Ex-Employees Around: The Value Of Your Network
We have all heard the phrases “your network is your net worth” and that things “move at the speed of trust”. Trust and network are the actual currencies of our world and economy.
Nurture your networks, it’s the most important thing you can do.
- https://www.netsuite.com/portal/resource/articles/human-resources/employee-turnover-statistics.shtml#:~:text=What is a good employee,them due to poor performance
- https://www.bls.gov/ooh/business-and-financial/home.htm#:~:text=Overall employment in business and,new jobs over the decade.
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