Why you should consider an employee referral programme

women said, woman listening to gossip

Imagine having your own in-house team of recruiters – all working hard to ensure that your organisation not only attracts but also retains the best people it needs. Well, you already have that – they’re called ‘employees’.

More often than not, when it comes to hiring your next employee, the first thing that most of us will do is to ask your existing employees if they know someone who could be good for the role. Why is that?

Research has shown that employee referrals are one of the most effective ways of finding the best candidates for the job, especially for entry level and low- to middle- management positions that typically have a higher rate of turnover than senior and Board level roles.

As a result, employers have extensively been found to gain a number of key tangible benefits from having an employee referral programme in place:

  1. Reduced time-to-hire: According to a study by Jobvite, it takes on average just 29 days to hire a referred candidate, compared to 39 days to hire one through a job posting or 55 days for a candidate who has applied via a careers website.
  2. Higher staff retention levels: The same study has also found that referred candidates tend to stay with their new employer longer than those who applied via job boards. Accordingly, 46% of staff stay for at least one year, while 45% and 47% stay in their role for two and three years respectively.
  3. Lower recruitment marketing costs: The cost of advertising your vacancies across multiple job boards and other career sites can be costly, and with no guarantee over the quality of applicants that your recruitment marketing will generate. Because of the reduced time-to-hire and the fact that referred employees are seemingly more loyal to the organisation as highlighted above, it is not surprisingly to learn that 51% of employers report significantly reduced recruitment marketing costs as a direct result of their employee referral programme.
  4. Onboarding is quicker: The cost of sourcing the right candidates can sometimes appear high, if you’re not utilising the right resources that is. But the costs incurred of hiring the wrong person are significantly higher, with the CIPD estimating that employers lose at least £8,000-£12,000 each time they have to replace a candidate who wasn’t the right fit for them. The focus is always on the quality of the hire and referred employees have been shown to get onboard and integrate quicker into the culture of the organisation than non-referred employees.
  5. Higher existing staff retention levels too: It’s not just those employees that were referred to you who stay with the organisation for longer, so too do those who did the referring in the first place. A successful referral makes your existing employees feel valued and better engaged with the business, which in turn boosts their productivity levels. More over, people like what is familiar to them – the so-called ‘beautiful is familiar’ effect – and the more familiar people they see on a day-to-day basis at work, the greater the sense of community they have in the workplace.


We have written recently about the way in which an effective internal communications plan can positively benefit the organisation, but having an employee referral programme in place is the icing that sits on top of the proverbial employee cake.

Keep the focus on those within your existing teams who share your values and vision that could serve as ‘ambassadors’ for your organisation. In doing so, they will be enthused to actively promote the benefits of working with your organisation and help you to attract the right people to come knocking on your door.