Successfully recruiting the talent your organization needs to succeed requires a multi-channel strategy. You post your open positions to relevant niche boards and share jobs on social media. But there's another channel for finding excellent candidates you might not be using fully: employee referrals.

Your staff might already refer candidates to you informally. But there are several good reasons to formalize—and incentivize—the process.

Referrals are efficient. A referral program could save your organization valuable time—and even some funding. While referred candidates must apply for open positions just as other applicants do, chances are, you'll be able to speed up the recruitment process, meaning you won't have to wait as long for the right candidates.

If you use a recruitment or staffing agency to source candidates, you'll almost definitely stretch your budget further by skipping the standard agency fees.

When you hire a candidate referred by another employee, you increase employee retention twice over.

Onboarding is easier. Successful onboarding requires thoughtful planning and a significant time commitment. Because a referred candidate already has a connection "on the inside," he or she will likely have a smoother onboarding process. The candidate's connection will be able to help with introductions to the rest of the staff and answer questions about organizational culture, policies, and department structures, among other things.

Referrals correlate with higher employee retention. When you hire a candidate referred by another employee, you increase employee retention twice over. A LinkedIn study found that referred hires tend to stay with their organizations longer than others. Additionally, the data showed that employees who refer candidates—especially those whose referrals become employees—stick around for a significantly longer period than do employees who don't refer candidates.

Along with the many benefits of employee referral programs, there are plenty of risks and challenges to consider. You'll want to keep a close eye on how your referral program affects the diversity of your staff, for example. And you'll find quickly that not every employee is able to deliver high-quality referrals.

Finally, communication is key to a successful employee referral program. Proactive and prompt communication between your HR team and referred candidates is good for your brand. And keep referrers in the loop about the people they recommend: Update them on the status of their referrals, and if a candidate isn't the right fit, let the referrer know why the person wasn't hired.

By adding an effective employee referral program to your recruitment toolkit, you can increase both employee engagement and retention—while building a high-performing team.