5 Reasons Employee Referrals are the Top Source of Employment (Tips)

Sourcing quality candidates is indeed a significant task for any company. It involves a thorough review of applications, conducting interviews, and onboarding the selected candidates.

However, employee referrals have emerged as one of the preferred sources of employment for many companies. This recruitment method involves leveraging the networks of current employees to identify and attract top candidates for open positions. 

In a recent survey by CareerBuilder, 82% of employers rated employee referrals above all other sources for generating the best return on investment (ROI), and referred candidates are 55% faster to hire, compared with employees sourced through career sites.

This article explores five reasons why employee referrals are the top source of employment for companies looking to hire the best talent.

1. Reduce Time and Cost

Finding suitable candidates demands a significant investment of time and resources. Research has revealed that candidates referred by employees are 55% quicker to hire compared to those sourced through career sites. This means that leveraging employee referrals not only saves time but also reduces the overall cost of the hiring process.

2. Attracts Skilled and Capable Candidates

When hiring a new employee, it is often more beneficial to seek recommendations from current employees rather than relying solely on professional references. This is because employees are more likely to be familiar with the candidate’s work ethic, skills, and ability to fit into the company culture. 

Additionally, a personal recommendation from someone who is already within the company can provide greater assurance that the reference is valid and trustworthy. A recent study by Zao found that nearly three in ten employers have discovered fake references on job applications. 

Therefore, seeking personal recommendations from current employees can help to reduce the risk of hiring unsuitable candidates.

3. Employee Retention Through Referrals

One of the key advantages of employee referrals is the improved retention of referred hires within the company compared to regular hires. This leads to a higher employee retention rate. 

Research conducted by JobVite indicates that a referred hire typically remains with the firm for at least a year, outperforming candidates hired through job boards or recruitment agencies. This demonstrates the long-term value of employee referrals in fostering a stable and committed workforce.

4. Employee Engagement

When a company encourages its employees to identify potential hires within the organization, it empowers them and gives them a sense of ownership and contribution. At the same time, they experience the satisfaction of helping a friend or colleague advance their career. 

This not only strengthens personal relationships but also reinforces the company’s commitment to its employees’ overall engagement in firm activities.

5. Cultural Fit 

Cultural fit plays a crucial role in an organization’s success, productivity, and overall achievements. When team members share similar values and work ethic, it fosters a sense of cohesion and unity, which can lead to a better cultural fit overall.

Employee referrals often experience a smoother transition and quicker integration into the team due to their existing connection with the referring colleague. 

They have a clearer understanding of company culture, expectations, and work dynamics, which can significantly reduce the time and effort required for onboarding. Additionally, the familiarity and trust established through the referral process can contribute to a more harmonious and productive work environment.

Tips on How to Get Employee Referral (Networking)

Volunteer work

Volunteering is a great way to expand your network and potentially secure an employee referral. By engaging in volunteer work, you can meet new people, including those who may have connections to job opportunities within their organizations. Building relationships through volunteer work can lead to valuable referrals and recommendations for potential job openings.

Apply for volunteer work in these companies

Your Contact 

Informing your friends, family, and acquaintances who are currently employed about your job search can lead to potential employee referrals. They may be able to recommend you for positions within their companies or refer you to other professionals in their network who could help with your job search.

Career Event

Attending career fairs, industry conferences, and networking events can provide opportunities to connect with professionals who may be able to refer you for job openings within their organizations. Building relationships at these events can lead to valuable employee referrals and insights into potential job opportunities.


Utilizing LinkedIn for networking and job searching can be an effective way to secure employee referrals. Engaging with professionals in your industry, joining relevant groups, and reaching out to connections can help you expand your network and increase your chances of receiving employee referrals for job openings.

Read more on how to connect employer on linkedin and How to Optimize your LinkedIn Profile for Job Seekers


Seeking mentorship from experienced professionals in your field can not only provide valuable guidance and advice but also potentially lead to employee referrals. A mentor may have connections within the industry and be willing to recommend you for job opportunities or introduce you to their network, ultimately helping you in your job search.

Read more on how to get a mentorship

Latest Posts
Related Posts