Making the case for employee referral programs

Employee referral program making the case

1 mins, 51 secs read time

In today’s workforce, the people you hire have a big impact on what your company can achieve both creatively and financially. We have a feeling you probably already know this—that’s why you’re looking for ways to get even better people through your doors.

Luckily, there’s one approach that will help you find top-performing, dedicated employees who will lead your company to do great things: Asking your existing employees to make referrals!

Let’s take a look at why referrals should be an essential part of your recruiting strategy.

Referrals are the #1 source for new hire quality.

According to Dr. John Sullivan, 88% of employers said that referrals are the #1 best source for above-average applicants.

Referred employees stick around for longer.

After one year, retention of referred employees is 46% compared to 33% from career sites and 22% from job boards. After two years, retention of referred employees is 45% compared to 20% from job boards.

Referral hires are better performers.

Hires from referrals produce a nearly 25% higher profit than hires from other sources. They can produce between 24%–135% more profit on average. If an employee produces $150k in revenue, that translates to $37.5–$202k in additional annual profit!

Referred candidates are 20x more likely to get hired.

On average, it only takes 5 referrals to make a hire. Compare that to 100 applicants from job boards! And as we’ve already pointed out, the referral hire will likely be a more valuable asset to your organization.

But… only 20% of recruiters are happy with how involved their employees are in referrals.

So we have a little bit of a problem. Recruiters can see the value in getting referrals, but it’s not always easy to get everyone on board with setting up (and participating in) a referral program.


That’s why we put together the eBook “How to Build a Strong Employee Referral Program.” We wanted to share some case studies and best practices to help you launch or improve the existing employee referral program at your company.

Over the next few weeks, we’ll be sharing our top tips and tricks. Stay tuned!

Melissa Suzuno

Melissa Suzuno

is a freelance writer and former Content Marketing Manager at Greenhouse. Melissa previously built out the content marketing programs at Parklet (an onboarding and employee experience solution) and AfterCollege (a job search resource for recent grads), so she's made it a bit of a habit to help people get excited about and invested in their work. Find Melissa on Twitter and LinkedIn.