How Job Referrals Can Jumpstart Better Hiring for HR


Referrals are one of the best sources for quality hires.
Hiring through referrals leads to a 46 percent retention rate after one year versus a 33 percent rate with career search websites.

Statistics compiled by Undercover Recruiter suggest that 67 percent of employers and recruiters found that the recruiting process was faster when recruiting through referrals. Recruiters also suggest that utilizing referrals is more cost-effective and results in a better cultural fit.

Developing a strong employee referral program is a cornerstone for hiring departments, yet many struggle to implement solid strategies that lead to quality results. All too often, companies fail to provide full backing of such projects and referrals end up being reduced to a spreadsheet occasionally updated by an HR staff member.

What can you do to take advantage of the benefits of referrals? How can you develop a strong referral pipeline within your organization? Here are five suggestions: 

  1. Understand how HR can benefit from referrals

    Research suggest that people brought on board via referrals are not only more effective at their jobs, but they also tend to be more satisfied as well.

    When compared to employees hired from job boards, referred employees get up and moving on the job much faster – an average of 29 days for referrals versus 39 days for candidates from job boards.

    Hiring through referrals also reduces employee churn, with 46 percent of referred candidates staying for over one year and 47 percent staying for over three years. This represents a huge cost saving for your HR department.

    Rather than spending time, money and resources filling the same positions over and over again, HR can focus its efforts on other important tasks such as acquiring top talent for particularly hard to fill roles.

  2. Design a referral program that encourages participation

    As you look for ways to improve your referrals, involve individuals who will be key players in the referral process such as hiring managers, HR staff members and even employees themselves.

    Establish rules and guidelines about who will be eligible to refer new candidates, how the referral process will be accomplished and how referred candidates will be evaluated. By involving major stakeholders from the beginning of the process, people will likely feel more motivated and encouraged to participate in the referral process.

  3. Leverage tech tools to make the process easier

    Automated software and online tools are now making many aspects of the hiring process faster and easier, and that includes referrals. One strategy is to implement online tools that automatically distribute new job listings to all employees, allowing them to quickly share, invite and recommend qualified people that they know.

    Such tools not only eliminate a lot of headaches associated with maintaining and tracking referrals, but they also make it easier for your entire workforce to advertise job listings and advocate your brand within their social networks.

  4. Incentivize employees to refer new talent

    Rewards can help encourage employees to get excited about the referral process. Incentives vary dramatically from one company to the next and can even be personalized depending upon the interests and needs of your workers.

    Some organizations may find that bonuses and other financial incentives can be particularly motivating, while others might find that perks such as gift cards, days off, flexible scheduling and paid holidays can also lead to increased referrals.

  5. Track your employees with strong referral networks

    If there are certain individuals within your organization that have strong professional connections and networks that could potentially lead to great referrals, it is important to tailor your requests to these high-value employees.

    But, be careful not to spam these individuals with referral requests, but be sure that they are aware of job openings that may appeal to people in their networks. The chances are that they know both active and passive job seekers within these networks who would make great quality hires.

    Referrals have a demonstrated track record of producing high-quality hires that not only stay engaged with the organization but also stay on the job for longer than those culled from other sources. Gallup Business Journal also reports that employees to have friends at work are much more likely to feel engaged, connected, motivated and committed to their work.

    What strategies do you use to improve company referrals?