Candidate referrals coupled with a worker referral program is a trusted talent sourcing strategy, which historically provides a speedy hiring process. In recent years, these programs are experiencing slower time-to-hire rates and lower candidate conversions. Criticizing the talent pool and the current state of hiring is an easy scapegoat, however research has revealed that the process and or programs that are causing candidate disruption.
According to recent data released by Aptitude Research and sponsored by Aliro, 76% of companies possess a candidate referral program with incentives, but actually 48% inform current workers about the program. The data also points out that 34% of respondents report that candidate referrals integrate with an ATS for tracking and only 22% include referrals that are internal. The study was conducted in 2022 and surveyed 322 executives and professionals who work in HR and Talent Acquisition, spread evenly from SMB to the enterprise level.
The data reveals challenges already commonly reported by workers that candidate referral programs include inefficient process navigation and workers reporting barriers to collecting incentives. Many referral programs have their worker base jump through many hoops, which ultimately lowers repeat or unfinished referrals. With all that said, 84% of the survey respondents reported that employee referrals are the most cost effective talent sourcing method.
“In today’s labor market, sourcing talent is one of the most challenging and costly practices within talent acquisition,” notes Madeline Laurano, analyst and founder of Aptitude Research. “When hiring gets tough, leaders tend to throw money at standard sourcing channels without considering what truly drives results.”
Understanding that Talent Acquisition teams in today’s hiring climate need to be more reactive, 72% of the respondents report they will rethink their sourcing efforts for 2023, which begins with their candidate referral program. This coupled with 63% of respondents said they are not measuring ROI on talent sourcing across the board, leading to the reactive reaction by a majority of talent acquisition teams when time-to-hire rates push beyond 60 days per requisition.