According to industry benchmarks, the average company is lucky to get even 1 strong referral per employee (RPE) per year. After just a year of implementing Drafted, Karat hit 3 RPE - three times the performance of the industry benchmark. By partnering with Drafted to help drive employee referrals Karat was able to outperform the standard baseline goal.
With consistent execution and measurement, Karat was able to make 30 hires from referrals through Drafted. One of the most important parts of this achievement was not just increasing volume, but also improving efficiency.
Referrals Quality Before vs. After Drafted
Drafted helps customers set clear goals around referral quality over sheer quantity. In the case with Karat, we wanted to make sure they were receiving high quality referrals, and measured this in two different ways. - Interview efficiency and hiring efficiency.
Cate explained the types of referrals they were seeing come through Drafted, “We’re typically getting referrals that are first degree connections.” Meaning the referrer knows the candidate well and most of the time the candidate is aware they’re being referred.
Outside of those first degree connections, they’re still receiving additional quality pipeline, even when the referrer doesn’t know the candidate particularly well.
“Occasionally people go through their matches and say, 'Hey this person might be good, but don’t mention me.' It’s additional organic sourcing pipeline I don’t think we would have if we didn’t have something like this. Otherwise people would think “Who do I know?,” and just refer those people,” noted Cate.
To measure the success of referral quality we evaluate the referral hiring efficiency, which is the percent of referrals that convert to a hire. For example, if you get 100 referrals and 20 of those convert into hires, you would be at 20% hiring efficiency for referrals.
Interview efficiency is the percent of referrals that make it to the interview stage. For example, if you get 100 referrals, and 50 of those convert to interviews, and 20 of those convert to hires, you will be at 50% interview efficiency and 20% hiring efficiency.
By focusing on converting more referrals to interviews and hires, Drafted helps companies like Karat achieve a stronger top-of-funnel pipeline for talent.
Drafted sends weekly reports on key performance indicators (KPIs) around your referral program. At Karat, these reports showed that today 42.3% of all referrals are getting to the interview stage at Karat, doubling the rate from 6 months before Drafted. That’s DOUBLE the interview efficiency, and a strong leading indicator for long term success.
One of the biggest factors talent teams report on is ROI. Hiring efficiency is a great way to translate ROI for the companies that partner with Drafted. To give transparency to this progress companies like Karat can use the Drafted Leaderboard to show how well referrals are moving through the hiring stages.
“Great people know great people - I'm glad we've been able to tap into our team's networks so easily”
- Cate Connolly, Talent
By taking a quality focused approach to the employee referral program, companies like Karat are able to create a highly converting pipeline source. Hiring top talent is as competitive as ever, being able to leverage the people at your company to help you get some of those folks in the door can greatly impact the results of the talent team. With an efficiency focused mindset, our product enabled Karat to turn employee referrals into a scalable hiring source.