The Power of an Employee Referral Program

You are here:
The Power of an Employee Referral Program

Employee referrals can add substantial value – and they are on the rise. All the more reason to get started with that employee referral program if you haven’t done so yet. Today we’ll highlight some of the benefits of employee referrals and a few elements every employee referral program should include.

Employee referrals and why they work

Let’s be honest. If a colleague says he or she knows the perfect candidate to fill that position you so desperately need to find someone for, what do you do?

Chances are, you invite them for an interview straight away and – as the biased human beings we are – you may look at the referred candidate more positively.

After all, the fact that he or she comes recommended means they’ve already been vetted, right?

Yes, as weird as this may seem, in a way, referrals have been preselected by the simple fact that if your current employees weren’t convinced they would be a good fit, they wouldn’t have made the recommendation.

Of course, this is in no way a data-driven or objective selection method. And yet, it works.

HR Business Partner
Resource Library

Download our free PDF and get access to essential reports, articles & videos that'll help you become a successful & future-proof HR Business Partner.

Get the PDF

Let me show you a few stats to back this up:

  • New hires that come via an employee referral program are more likely to stay with your company: 46% vs. 33% for organizations that only use career sites.
  • Referred employees start their job sooner than hires from other sources: after 29 days for the former and after 55 days for candidates from career sites.
  • New hires sourced via a referral program generate 25% more profit for their company than employees sourced via a different channel.

Apart from the stats, there is a myriad of reasons why employee referrals work. We’ll highlight a few of them.

They are a better culture fit

Again, if your employees thought their referral wouldn’t be a good fit, both for the job and for your company culture, they wouldn’t put them forward as a potential candidate.

As such, your staff preselects the candidates for you. And who knows better what your company culture is like and what type of person it takes to excel in your organization than your current employees?

Besides, an employee that refers a candidate will want to make sure they only present the best possible person for the job because they’ll personally feel responsible for the success of their referral in the company.

They are more engaged

Since referrals are more likely to be a good (culture) fit, they’ll probably feel at home straight away. They’ll get along well with your other employees because they’ll know at least one person already who will introduce them to the rest of team and show them the ropes.

They are less likely to leave, more productive, you name it

As a (logical) result, referred employees are happier, less likely to leave the company prematurely and more productive than people who’ve been hired via a different source. Needless to say, this can drastically improve quality of hire.

Related: 7 Digital Recruitment Terms You Should Know

Elements of an Awesome Employee Referral Program

Like many things, employee referral programs come in numerous shapes and forms. There are however certain elements every program ideally should include.


Unsurprisingly, cash incentives are most likely to get your employees motivated. If you don’t have the budget for it, incentives such as extra holidays in return for a successful referral or even a simple thank you could work too.

HR Career Path

Planning out your HR career path is key to achieving your professional & personal goals. Map your own HR Career path with our new tool.

Get Started

Ease of use

The easier it is for your staff to use the company’s employee referral program, the better. An easy sign-up, for example, can get up to 50% of your employees to join your referral program on the first day.


There it is again, one of the magic words for our 21st-century workforce: feedback. Make sure to keep your employees posted on the status of their referrals. Simply let them know if the candidate they put forward is moving forward in the hiring process or not. That is if you want them to keep referring candidates to you of course.


Everyone likes to get a thank you every now and then. Especially when they’ve just helped their company hire a great candidate. Try to think of a nice way to provide your employees the recognition they deserve when they’ve successfully referred someone. A company-wide weekly announcement perhaps?

The Power of an Employee Referral Program

HR referral tools and software

Luckily, we live in a digital age which means we can benefit from all sorts of HR referral tools and software. Below you’ll find a couple of examples.

Simppler provides a platform that enables employees to connect their digital networks to Simppler. With the help of machine learning technology the company’s recommendation engine then helps organizations to detect the best talent in their employees’ networks. provides companies with easy-to-use employee referral programs (among other things). Depending on your needs and preferences, a program can include raffles, games, recognition etc. Analytics and metrics provide companies with information about employee participation and success.

Boon proactively identifies the absolute best-fit candidates in an organization’s collective network. With the help of machine learning technology Boon’s matching accuracy improves over time and of course, the company provides its clients key insights with leaderboards, conversion charts, and progress reports.

Get referring!

An employee referral program can be a great way to develop a competitive edge and stay ahead of your competition in the war for talent. Given its benefits – both for your current and future employees – and its relatively low costs, having a referral program really should be a no-brainer.

Subscribe to our weekly newsletter to stay up-to-date with the latest HR news, trends, and resources.

Are you ready for the future of HR?

Learn modern and relevant HR skills, online

Browse courses Enroll now