Have you ever had a friend who you thought would be perfect for a role at your company?  Or conversely, have you ever had a friend that asked you about a job at your company, and you thought, this will never work?  Chances are that you have a good idea what it takes to be successful in your organization.

In reviewing over 50 years of data on job applicant sources, the recruitment researchers Zottoli and Wanous  found consistent evidence that “inside sources” (employee referrals of friends and acquaintances, rehires of former employees, transfers from inside the organization) provided people who performed better and remained on the job longer, on average, than “outside sources” (advertising, web or employment agencies).  Furthermore, employees hired through inside sources tend to be more satisfied with their jobs, likely because they have more realistic expectations about what the job will entail.

There are likely two primary reasons for the superiority of “inside sources”:

• Such applicants receive more accurate information about the job and so “prescreen” themselves out of jobs for which they aren’t suited
• Recommenders will assess “fit” before suggesting someone for a job.

So, what does that mean for your organization?  It means that employee referrals are something you need to encourage, and you need to keep in touch with employees that you may wish to rehire someday.

• Offer incentives to employees for referrals (more if they stay longer), such as gift cards, money and vacation days
• Be clear about who is eligible (perhaps not recruiters who are supposed to find people) for employee referrals
• Ensure everyone knows the process for submitting referrals as well as the positions that are available
• Large organizations should include referrals in their Applicant Tracking Systems
• Keep in touch with former employees via LinkedIn–depending on the reason for the departure, conditions may someday be right to work together in future

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