The Benefits of Employee Referral Programs

January 23, 2018 Matthew Tarpey


With all the new ways of finding, contacting and tracking candidates, it can be easy to forget the power employee referrals programs can bring to the table. They may not have quite the same reach as other methods, but these programs often yield far better results.

Here are just a few of the reasons an employee referral program may be one of your most powerful recruitment tools:

Higher Quality of Hire

Even with all the information candidates include on their applications, it can be difficult to tell how good of a fit an individual will be for the position without a few rounds of interviews. And while you should still take time to interview referred candidates, the chances of those individuals being good fits are much higher than someone you know by resume alone. 

That’s because employees know that when they refer someone for a position, the quality of that candidate will reflect on them as well. The risk of being responsible for bringing in a poor-quality candidate for an interview – or worse, being responsible for a bad hire – leads most employees to carefully reflect on the person’s skills and qualifications before making the referral. They’re also likely to help the candidate prepare for the interview process, giving the candidate a better understanding of the company, position and responsibilities.

Reach Passive Candidates

One of the biggest advantages of a referral program is its ability to reach passive job seekers – individuals who may be open to changing jobs, but aren’t necessarily actively browsing job postings or searching for opportunities on their own. Since they’re typically satisfied with their current jobs, getting a passive job seekers’ attention can be extremely difficult. When the suggestion is coming from a friend or family member, however, they’re much more likely to take notice.

Improved Company Culture

Employees who refer friends and family to open positions at their company are more than likely pretty happy with the company culture – and they’re likely to reach out to people with similar values to their own when making referrals. When an employee makes a referral, they aren’t just endorsing the candidate’s skills and experience – they’re also saying this is someone they wouldn’t mind seeing and working with on a daily basis.

Better Employee Engagement

Employees like being involved in making decisions that will have an impact on themselves and the company. The very opportunity to influence the makeup and direction of a team by referring candidates can often increase workers’ happiness and level of engagement. It gives them a sense that they’re involved in the business beyond the standard contributions associated with their position, and it makes them feel like they have more of a stake in the company’s future.

That’s not even mentioning potential incentives offered for quality referrals. The right incentives will make employees feel more appreciated and, as a result, happier and more productive.

Looking for more ways to improve your hiring process? Check out these 8 Hiring Mistakes to Avoid in 2018.


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