Employee Referral – The Way to More Successful Job Matches


Are you having trouble finding the right person for the right job, and the best among the rest? Imagine not having to source and attract candidates by using databases, social media, etc., nor look through heaps of CVs and undergo countless interviews just to screen out the right fit. 

All you need to do is run a cost-effective program and wait at your comfy chair for the right person to walk through your door and hand you his/ her resume. But how?

The key is employee referrals.

1. What is an employee referral?

It is a preferred formal program, recruiting strategy, instituted by employers to encourage current employees to refer qualified candidates for jobs at the company. How it works is that it uses the personal networks of existing employees as a talent pool for recruiting and rewards are usually offered for a successful referral.

Industries that source for workers with skills that are generally “hard to observe”, such as the tech, consulting, and finance industries, often use such hiring method as stated by Forbes.

2. Benefits from having employee referral programs

a) Reduce turnover rates and improve employee retention

This is related to the culture fit. As current employees know and understand the workplace culture, they would know the right person in their network that will fit the team and company. Thus, ensuring a better culture fit. 

Furthermore, as the referee already knows someone in the company and knows more about the company as compared to a non-referee, he/ she will know what is to come and settle down quicker. 

Based on my research, it is also said that referrals who made successful referrals tend to stay in the company longer than those who did not.

Cited from The Undercover Recruiter

b) Result in quality hires

Choosing the best out of the rest

Current employees knowing the company’s mission and ideal candidate will be able to identify the best suitable candidate with the right skills that will fit the job.  

LinkedIn Talent Solutions’ Global Recruiting Trends 2016 reveals that “employee referral programs are a key source of quality hires and are growing as a long-term play”.

Most employees will be more careful of the kind of candidates they refer as the quality of the candidate will reflect on them as well. Hence, the responsibility falls on the employees.

c) Recruit faster

Research has shown that employee referrals are an effective way to improve recruiting for both the employer and the employee as it cuts away irrelevant applicants. To support that, a Glassdoor report states that “employee referrals boost the odds of a successful job match by a statistically significant 2.6-6.6 per cent.”

Adding on to that, a Medium.com article states that referrals start their positions faster (29 days) than candidates who apply through job boards (39 days) and career sites (55 days).

Saving time and quickening the selection process.

Cited from The Undercover Recruiter

d) Cost-effective

As the recruitment process is shortened, expenses set aside for recruiting and resources required to identify the right applicant will also be lesser. For example, the company will not have to spend money to advertise the available job positions nor outsource for an external recruiter. 

Instead, it just has to ask and reward its workers for recommending suitable candidates. 

Thus, requiring much lower cost or no cost at all.

e) Strengthen employer brand

Hearing an insider is always more reliable than an outsider. 

Through the employee referral program, current employees will interact with the candidate and give insights about the employer and company. Words from the employer or CEO may not be as convincing as compared to recommendations from familiar faces.

So… this shows it is important to care about the well being of the employees and promote a good company culture as the potential candidate you are looking for may depend on your employees, the most powerful asset for companies.

f) Better employee engagement

Happy employees = Happy company

The higher the level of employee engagement, the higher the level of employee satisfaction.

Employees knowing they are involved in the decision making of the company will feel more belonged and valued by the company, hence creating more contented employees.

Not forgetting rewards offered for successful and quality referrals that will further boost the productivity and happiness of the employees. Giving them a sense of appreciation for their effort, encouraging engagement.

Examples of employee referral incentives:

  • Prizes
  • Day(s) off
  • Free travel
  • Event tickets
  • Cash rewards

3. Benefits for Job Seekers

With a suggestion coming from an employee, it will not only put you in the good light but help you be more noticeable as compared to other job applicants too. 

The chance of being hired will also be higher as your resume will get priority consideration.

4. Where do I start?

Well, you could design your employee referral program with an achievable goal in mind. The program should be easily understood and applied by your employees and that even the rewards offered are well communicated to them. 

Do ensure that your rewards are of the right mix so that it will attract and encourage your employees’ participation in referring a quality applicant.

Key steps for HR Professionals to take:

  1. Identify the strategic goals and anticipated outcomes
  2. Plan the process and participation rules
  3. Devise rewards that will encourage employee participation
  4. Include features to maximize referrals

Next, it is important to communicate the employee referral program and job description to your employees effectively and clearly. Your employees’ engagement in the process determines the effectiveness of your program.

Things employees should know for effective engagement:

  • How to refer someone
  • How easy and quick it is to submit a referral
  • What is the ideal candidate (requirements of the role)

However, if you lack the time to implement a referral program, there are a few unique referral-based recruitment platforms that will help you take the weight off your shoulders. For example, Jobs007.

Jobs007 appears at the top of the search page

Jobs007, a mobile-ready hiring app by IoTalents, is a passive recruitment platform that gets talents that may not be actively applying for a job but can be incentivised to apply for a job through a referral. 

As featured in prominent media outlets such as e27 and Vulcan Post, profiling technologies, algorithmic matching and talent mapping are used in-house to augment the job matching abilities of Jobs007, such as  Talenlytics™.

Jobs007 uses referral bounty, a cash reward incentive, which is set by the employers when they post jobs on the platform, to encourage referrers to participate.

What makes it better is that it is free to post jobs on the platform and clients are charged only upon success.

If you would like to know more about how Jobs007 can take your recruiting strategy to the next level, you can contact us here.

Keep in mind…

  1. A well-organised employee referral program can really boost your recruiting efforts.
  2. The higher the cash incentives (reward), the higher the engagement level, the more referrers.  
  3. Employee referrals are one of the best strategies in hiring quality candidates, as proven by many researches such as LinkedIn and Jobvite.
  4. Employee referrals are one of the best ways to retain employees and lower employee turnover rate as well. Reason being, research proves that employees with successful referrals become more loyal to the company and stay longer.
Download Jobs007 on Google Play and the App Store now.

IoTalents.com is an integrated platform for online Hirers and IT Workforce (Employees, Contract workers and Virtual Talents) to get intelligently connected and transact. We match companies to awesome talent, through a precise combination of data science and human judgement.