SmashFly Employee Referral Programs Survey Report 2015

Beyond Employees:
Employee Referral Programs Redefined
Summary Report & Survey Results
May 2015
© 2015 SmashFly Technologies. All rights reserved. #smashflyreferrals

Table of Contents
A look behind the data in this SmashFly report
© 2015 SmashFly Technologies. All rights reserved.
• Methodology
• Summary results
• % that have a referral program
• If no program, why not
• If yes, % new hires from referrals
• How do you administer referral program
• From whom do you solicit referrals
• Quality of referrals vs. other sources
• How do you track referral source
• How confident in your tracking method
• How do you reward successful referrals
• How do you track referral rewards
• Employee understanding of program
• Your role and title
• Your organization size and HQ location
• # hires and annual turnover rate
• Cost per hire by # of hires
• SmashFly recommendations
2

Survey methodology
A look behind the data in this SmashFly report
• In April 2015, SmashFly conducted an online survey about
Employee Referral Programs
• 114 talent acquisition/human resources professionals
participated, 74% manager level or above
• 86% from companies headquartered in North America, across
a range of company sizes
• Responses were anonymous
3

Survey results (1 of 3)
What the SmashFly Employee Referrals survey reveals
• Employee Referral Programs are widely used because they
produce a high volume of qualified candidates
• 77% of organizations currently have a formal referral program
• 32% of new hires come from referrals on average, and rate
highest in quality among sources of hire
• 57% limit their referral program to employees only
• 43% extend their program beyond employees to include
alumni, contractors, customers, vendors and/or partners
4

• Analysis shows those that reach beyond employees get 28% more
hires from referrals and 8% better quality candidates
• This data illustrates that extending who can refer candidates into
the organization can increase the volume of leads without
sacrificing quality
• 35% are actively seeking ways to start a formal program
• Yet 44% say lack of budget and no easy way to manage referrals
are holding them back
5

• 53% use their ATS to manage the referral program
• 51% use their ATS to track referrals as the source of hire
• However, 45% have only somewhat to no confidence in their
method of tracking
• 86% provide a bonus payment for successful referrals
• But 35% still use a spreadsheet to track rewards
• Challenges in managing and tracking referrals must be overcome
for more organizations to realize the benefits of this important
recruiting source
6

Do you have an employee referral program
77% have a formal referral program
Yes
77%
No
19%
Don't know
4%
© 2015 SmashFly Technologies. All rights reserved. 7

If no, why not
44% don’t have budget or a way to easily manage referrals
We're in the process of
putting together a formal
program soon
35%
Our ad-hoc program is good
enough - we don't need the
formality
9%
A formal program would
take too much to manage
6%
We don't have the
budget to give
rewards or gifts
20%
We don't have the budget
for an employee referral
system / tool
18%
We don't find value
in referrals
3%
I don't know
9%
8

If yes, percentage of new hires from referrals
32% of new hires came from referrals in the past 12 months (average)
28% 36%
Among participants that
get referrals from
employees only
Among participants that reach beyond
employees to get referrals
28%More referrals
9

How do you administer your referral program
53% manage referrals through their ATS
We use our ATS
53%
We have a stand-
alone referral
tool
15%
We use a spreadsheet
24%
I don’t know
8%
10

From whom do you solicit referrals
57% limit their referral program to employees only
97.7%
27.3% 26.1%
17.1% 14.8% 11.4%
3.4%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
43%
Extend their program
beyond employees to
include alumni,
contractors, customers,
vendors and/or partners
11

Rate the quality of referrals vs. other sources
Quality of referrals ranks high among sources of hire
2.18
2.61
2.7
2.81
2.9
3.02
3.11
3.13
3.49
3.93
4.03
1 2 3 4 5
Advertising (print/radio/etc.)
Job Fairs
Job Boards
Agency / Contract Recruiters
Search Engines
Social Media
Career Site
Temp to Hire
Direct Source
Internal Candidates
Referrals
Awful GreatSo-So GoodFair
8%
Among
participants that
reach beyond
employees to
solicit referralsHigher quality
12
Average among all participants

How do you track that a hire is a referral
51% track referrals using their ATS
My ATS tracks that the
candidate came from a
formal referral process
51%
My employee referral tool
tracks that the candidate
came from a formal referral
process
10%
Candidate selects
from drop-down
menu during apply
process
17%
Recruiter asks during
screening process
13%
Candidate provides
information after being
hired
5%
I don’t know
3%
Other
1%
13

How confident are you in how you track source
45% have somewhat to no faith in their method to track referrals
Absolutely
23%
Pretty Confident
32%
Somewhat
20%
A Little
17%
No Faith
8%
14

How do you reward people who refer
86% provide a bonus payment for successful referrals
We don’t provide
rewards
1%
We provide a referral
bonus payment
86%
We provide them
with a gift
5%
We recognize them but
no bonus or gift
5%
It varies depending
on the individual
submitting the referral
2%I don't know
1%
15

How do you track referral rewards
35% rely on spreadsheets to track reward payouts
We track with
our ATS
24%
We track with
our employee referral tool
11%
We track with
a different
HR system
17%
We track with
spreadsheets
35%
I don't
know
10%
Other
3%
16

How well do your employees…
Many referral programs are not well understood or easy to use
Completely
15%
Pretty good
33%Somewhat
33%
Barely
15%
Not at all
4%
Completely
16%
Pretty good
25%
Somewhat
36%
Barely
15%
Not at all
8%
Understand your
referral program?
Find your program
easy to use?
17

Your role and title
69% in talent acquisition, 74% manager level or above
HR Generalist
5%
Recruiting /
Talent
Acquisition
69%
HR Systems /
Technology
13%
Learning &
Development
5%
Employee
Relations
2%Other
6%
C-level / VP
7%
Director
25%
Manager
42%
Team
member
22%
Other
4%
Role? Title?
18

Your organization size and HQ location
86% from North America, range of company sizes
Fewer than
100
Employees
19%
100 - 1,000
Employees
15%
1,001 - 5,000
Employees
22%
5,001 -
10,000
Employees
11%
10,001 -
50,000
Employees
17%
Over 50,000
Employees
16%
United States
81%
Canada
5%
Australia
4%
Europe
6%
Other
4%
Size? HQ location?
19

Your number of hires and turnover rate
50% fill <500, 25% fill 501-2,500 & 21% fill >2,501 jobs,
23% average annual turnover rate
Fewer than
100 jobs
27%
101 - 250
jobs
11%
251 - 500
jobs
12%
501 - 1,000
jobs
13%
1,000 - 2,500
jobs
12%
2,501 - 5,000
jobs
7%
5,001 -
10,000 jobs
6%
Over 10,000
jobs
8%
Don't know
4%
Annual turnover rate?
23%
# of hires
annually
globally?
20

Your cost per hire by number of hires
Average approx. cost per hire of all participants is $3,900
Number of hires
annually globally
Average approximate
cost per hire
<500 jobs $3,500
501 – 2,500 jobs $6,000
>2,501 jobs $4,050
21

SmashFly Recommendations (1 of 2)
Ways organizations can maximize referrals
 Leverage the power of your organization’s full network by inviting alumni,
contractors, customers, vendors, partners and fans to refer candidates
 Incentivize more referrals by allowing multiple people to sponsor the
same candidate and to make general referrals not just for a specific job
 Ensure quality of referrals remains high by asking sponsors to provide a
recommendation, not just a name
 Remove the red tape by keeping referrals open-ended and not limited by
the date the referral is made or when the job is posted
22

SmashFly Recommendations (2 of 2)
Ways organizations can maximize referrals
 Stay in compliance with corporate policies and government regulations by
validating the sponsor-candidate relationship and rules acceptance
 Make it easy for sponsors to find and refer candidates using their social
networks and email contacts
 Communicate transparently with sponsors on the status of their referrals
and rewards through an online sponsor portal
 Keep sponsors engaged by automating timely and relevant email that
puts you top of mind
23

About SmashFlyTechnologies
Forefront of modern talent acquisition strategy
SmashFly’s award-winning Total Recruitment Marketing Platform enables
talent acquisition teams to attract, engage and nurture candidates and convert
them into qualified applicants using a centralized management system that
automates and measures recruiting strategies and programs. Customers use
SmashFly to unite their previously disconnected recruiting tools into an
integrated software platform for Job Distribution, Candidate Relationship
Management (CRM), Talent Networks, mobile-responsive and SEO-optimized
Career Sites, Employee Referrals, Social Recruiting and Recruiting Analytics.
Used to target pre-applicants in the front-end of the talent acquisition process,
SmashFly integrates with any applicant tracking system (ATS) to provide
unparalleled, real-time analytics on the sources that produce the best hires for
the organization. Learn more at smashfly.com.
24

SmashFly Employee Referral Programs Survey Report 2015

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