6 Reasons Why Digital Employee Referral Systems Are The Future

Let’s face it – paper trails are a thing of the past. Everything is getting digitized – from the way you store your data to the way you work. Why should something as important as employee referrals still be done manually in this technological landscape?

The market asked this question, and the resultant demand led to the advent of a digital employee referral system. This software made it easy to track individual employee contributions to referrals and eliminated the scope of error synonymous with manual tracking.

However, as new technologies emerge, there is a constant question plaguing everyone’s minds: Are they feasible in the long run? Let us take a look at some reasons that put all queries to rest.

Reduces Hiring Time for Companies

If you’re a part of an organisation, especially the recruiting team, you know the hassle of going through thousands of employee profiles to short-list the most deserving candidate. Even then, there is no guarantee that the employee would be suited to the company’s culture.

Keeping a digital referral system ensures that the current employees, already well-versed with the company, can recommend new hires who would gel with the company culture. This software usually provides a company with qualified leads, which can help streamline the recruitment process and save time and resources.

Makes it Easier to Incentivizes Employees for Quality Hires

It might be common to ask – why would employees suggest someone from their circle for the job? The answer is simple – for rewards, of course! According to a survey by LinkedIn, employees are more likely to remember travel incentives or rewards rather than cash payments.

The role of a digital referral system here is to make it easy for the company to keep track of incentives. Since the software does everything, the process is seamless and ensures that employees receive appropriate rewards according to the stage of the recruitment process.

Transparency in Each Stage of the Hiring Process

Perhaps the biggest advantage of a digital referral system is the transparency it provides, both for the employees and the people being hired. The higher the transparency of the process, the more the employee is likely to recommend future connections to the company.

Employees can access the software and check for the progress of the recruitment to ensure that they are being suitably compensated for their efforts.

On the other hand, a manual method of tracking employee referrals might require HR to go out of their way to update it constantly. The process might also demand more time since the information may not be readily available.

AI-Driven Suggestions for Identifying Suitable Candidates

Artificial Intelligence has recently taken the technological landscape by storm and promises to evolve further. Right now, it is being used for its human-like capabilities to allow technical systems to adjust to new inputs and make decisions.

Using the same logic, most digital employee referral systems use the power of AI to suggest new candidates from team networks and prevent candidate ghosting. These candidates are chosen based on their suitability for the role after the AI observes and analyses the company’s hiring patterns through the software.

Not only does this help organizations attract more potential employees from their extended network, but it also recognizes underrated individuals to boost company revenue.

Promotes Healthy Competition with an Interactive Leader board

Think of it like work games. Most digital referral systems are embedded with an interactive leaderboard that displays the name of employees in descending order of referral points. By doing this, the systems ensure that every employee is motivated to participate in the race and recommend reliable individuals from their network.

It is human nature to be fuelled by competition. You can only realize the benchmark of your progress when you see the competition and their performance. Leaderboards use this psychology to constantly encourage users to score more points and engage in the referral process more.

In an era where attention spans are getting lesser, digital referral software ensures that people are constantly on their toes and makes the referral process fun. Add a built-in reward system to the same, and there are hordes of employees vying for the top spot!

Displays Relevant Metrics

Some digital employee referral systems are often loaded with metrics that can help organizations track the interest in their job listings. Since data is crucial for any organization to function effectively, intelligent data reports can help recognize interest and filter out potential candidates from the employee network.

The system can display relevant data like the visibility of posts and the number of clicks on the job postings to enable companies to make better decisions. Integrating the software with social media is also possible to reach a wider group of people within your network.

Final Thoughts

A study by IDC claims that investment in direct digital transformations is expected to reach a value of $7.1 trillion by 2023. More and more companies are choosing to go digital and investing significant resources in the process to enjoy long-term stability. Apart from the goal of attaining stability, organizations are also keen to stand out from the competition and reduce paperwork as much as possible.

Incorporating a digital employee referral system is a good step on the way to attaining complete digitization. This software can increase employee engagement and streamline businesses’ hiring process, preventing wasting resources and saving costs.

As the age of technology moves further at a rapid pace, these systems promise to get better and add features to improve efficiency and simplify referrals further. So, keep an eye out for digital employee referral systems as the next big thing!


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