Competition for sales professionals is fierce. Most technology companies, at any given time, are recruiting for multiple sales roles – from Account Executives to Client Success Managers to Sales Development Reps. This makes the recruiting and hiring process even more difficult for companies.
Smart companies implement an employee referral program to give them an advantage over their competition. There are many advantages to referral programs, and if implemented and managed well, they can help you secure the best talent in the talent pool.
Here are five reasons why your company should consider a sales referral program:
1. Referral programs generate better leads.
Every referral is a direct reflection on the referee. Your current employees are not likely to refer a bad ‘fit’ or candidates who will not be good corporate citizens. The current employee is accountable to the business, and they don’t want to refer a ‘dud’. Because of this, sales candidates referred by current employees are often better suited for the job at hand and have a higher likelihood of success. For every 100 applicants, referrals generated 70% more good hires than non-referrals.
Note: Look for referrals whom employees know well. According to Harvard Business Review research, when the two know each other only through social media, the hiring outcome is not any better than that of candidates with no referral at all.
2. Referral candidates are faster to place and more likely to stay.
According to research, referred applicants are more likely to accept offers and less likely to quit down the line. 45% of employees sourced from employee referrals stay for longer than 4 years. In addition, the average referral candidate takes 29 days to place, while job board candidates take 39 days.
3. Referral programs promote your company brand and build hiring momentum.
Your current sales and service teams are an extension of your company’s marketing team. Every rep has a network of like-minded friends, current and former colleagues, and peers. Don’t underestimate your team’s reach and ability to expand the value of your brand. If utilized and incentivized correctly, your sales teams can help promote your brand and build hiring momentum.
4. Referral programs encourage sales participation and foster better company culture.
Sales teams love to be included in company initiatives, and they want to directly contribute to the overall success of the business. What better contribution can they make than referring and helping to build the sales organization? Additionally, sales teams respond well to incentives, so
utilizing rewards like bonuses or gift cards for successful referrals will get your teams even more involved. Smaller rewards throughout the process — at the time of referral, if the candidate reaches the interview stage, etc. – can also help motivate employees.
Referral programs also promote a winning sales culture. Having close friends at work makes you seven times more likely to be engaged in your job, increasing your team’s performance, productivity, and loyalty.
5. Referral programs help control company costs.
Utilizing recruiters and recruiting firms can be enormously expensive. Third-party staffing agencies charge an average of 20% – 25% of a new hire’s base compensation. But when employees are sourced through referrals, this money can be invested elsewhere in the company.
Additionally, ‘fill times’ are getting longer, and turnover is increasing. The average time to fill a position is 42 days, and if a company doesn’t have a rep in the seat producing, the quota is going unrealized, and every month/quarter it’s compounding.
Referral programs give your company an advantage in finding the best candidates, and they also give your team a reason to participate. Hiring is hard enough, so stack the deck in your favor. In today’s hiring market, you need every advantage you can get.
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