Referral Hiring 101: Everything You Need to Know About It

Employers shaking hands with a new hire through referral hiring

Let me start by saying that you could hire better. How? Two words. Referral. Hiring. I’ll explain what referral hiring is in a bit.

First, let’s understand the lengthy recruiting process that the average hiring Joe goes through. First, like any recruiter, you’d find the best job portal available for your budget. Then, you’d register an account and post your job vacancy. After that, you’re left just to HOPE to get a handful of suitable high-quality candidates. IF you’re lucky enough to skip through screening hundreds or even thousands of resumes that are just incompatible with the role.

HR executive throwing up all the resumes

Now, what if we told you, you can get candidates right away via referral hiring? What is referral hiring? It is a hiring strategy whereby a person can refer their connection to any suitable job vacancy. In simpler terms, you can ajak your friends and family to apply for vacancies available that you think are best suited for them.

Yes, no talent acquisition specialist, no cold callers, no external recruiters– everything’s done just by word of mouth. Referral hiring is a method of hiring whereby industry experts would refer candidates to open roles in other companies outside their own. This is different from the employee referral programmes you would come across online. That’s an internal hiring method that allows the employees within the company to refer their connections to work in roles within the company.

What are the advantages of referral hiring?

Now, you know the gist of what referral hiring is. Let me get to how it could be a hiring game-changer for you. 

1. It’s a lot cheaper and faster

HR is acting like a bargain hunter to find best referral hiring platform

Let me give you something to chew on for a bit. Referral hiring cuts down your hiring time to only 29 days instead of the average of 39 days via job boards and 55 days on career sites.  So, instead of paying for a package deal and wasting time screening resumes, what if you could just pay a referral fee and get candidates faster?  Now, you have highly suitable candidates fed to you! That’s exactly how referral hiring works.

I’ll second this by painting a picture of how your regular hiring process goes. Typically, you’d post up a vacancy on a job portal for a senior role and get thousands of applicants for it. But what sucks is that, out of the thousands, MOST of the applicants would be underqualified or perhaps even fresh graduates who’re just mass applying for vacancies. Now, you get to skip all of that and save your resources!

2. Referral hiring has a better retention rate AND conversion rate.

Referred candidates have shown 45% longer retention rates and stay around longer than candidates hired from job sites. Why? Referral hiring allows you to hire candidates that are a better fit for your company’s culture and goals. How and why does this happen, right?

Imagine this; you get referred a candidate who is suitable to your company culture. This is because the referrers understand the candidate’s personality before referring them to the open role in your company. This is opposed to the variety of problems that generally occur with new hires when they’re not a good cultural fit.

3. Referral hiring helps you consistently get better quality candidates

Recruiter passing over an unqualified candidates during referral hiring

At this point in your company’s growth, you’re used to using job sites. We get it; using those sites is the norm even if the process is painstakingly slow, and only if you’re lucky you could get a golden star of a candidate. Now, referral hiring breaks that chain by consistently providing you with better quality candidates.

Much like what we’ve gone through before this, candidates from referrals would be better suited for the role and company practices. Instead, you could get candidates that are best suited to the job descriptions that you have instead of screening thousands of resumes on your own. Such candidates will also only be referred to you if they’re known to fit your company’s goal and culture.

Here are the disadvantages of referrals

Much like everything else in the world, if there’s good, there’s also evil. But hear me out, the bad isn’t stuff that would take up your time or energy. 

1. Referral hiring isn't a stringent recruitment process

Penguin meme to describe the difficulties without referral hiring

The typical hiring process is undeniably strict. Some companies may even employ multiple screening exams or multi-stage interview processes. Referral hiring’s a lot easier, and yes, the entirety of it eliminates the need for such a rigorous process. While this is advantageous to the candidate, it might cause concern for an employer. Some companies may prefer to have personalised testing to ensure quality hires.

2. There might be nepotism or personal bias

We’re all bound to be biased in our judgement, especially when it involves the livelihood of our friends or family. You may likely receive candidates who have been referred only due to their connections. However, this is an easily correctable disadvantage. Much like a traditional hiring process, you would still need to interview the candidates. You could quickly eliminate candidates who are not suitable or don’t have the right qualifications.

3. There might be a lack of diversity

Much like the point earlier, there might be unconscious bias in hiring. Now, this is something we Malaysians consider a really sensitive topic. Companies with racial or hiring biases are common, but it’s unethical. What you could do to rectify this is to encourage diversity in hiring instead of adding such restrictions in your hiring process. You could even have activities that showcase the diversity and inclusivity in your company.

[Read more about the important of diversity and inclusion in the workplace here!]

Where can you get referral hiring services in Malaysia?

Pooh bear getting excited about honey just like employers would over referral hiring opportunity

Now that we’ve gone through why you need referral hiring let me tell you how you can get your hands into this honey-pot before anyone else does. Recruitopia is a referral hiring platform that allows companies to hire through referrals at a cheaper rate. On top of that, you would only need to pay upon successful placement. Surprise, surprise! You don’t have to fork out thousands before getting a solid candidate. 

Recruitopia has a growing network with over 50 referrers who are industry experts and ready to refer only the best candidates to you. If you’re worried that you’ll have to screen more irrelevant resumes, you can scrub that stress away. In other words, we’re going to do the hard work, and all you need to do now is just post up your vacancies, sit back and wait to receive only the best handful of resumes. 

All in all,

You’ve reached this far into the article, and I can’t say any more than I already have. Referral hiring is revolutionary, and you can build a team better, faster AND cheaper. With AI advancements, Recruitopia aims to introduce this practice with the hopes that it becomes a tidal wave that eases the current painfully tedious recruiting process. The choice is yours; take this chance to be part of a change that will change the industry with ease.

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