Harshita Kumbhar

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Why is a good employee referral program important for your organisation?

Why is a good employee referral program important for your organisation?

Employee Referrals is one of the proven best ways to hire. Almost 30% of hiring today happens through employee referrals and this number is only increasing. In such a case, it is imperative to understand the role of a good employee referral program.


Here are the five reasons why organisations put efforts and implement a good employee referral program:


#1 Company Culture


Employee Referrals is a tangible metric to measure the health of your organizational culture. A good company culture keeps your employees happy. And if the employees are happy, they are happy to refer a friend for a job; let alone convince them to join.


#2 Employee Engagement


Employee Referrals helps you kill two birds with one stone given that it sits at the intersection of employee engagement and hiring. The next time you have an employee engagement event, introduce a component on employee contributions to hiring. Have a pizza lunch, have your employees open up their phones and share good leads. If your organization is cutting back on spend, focus the employee engagement spend on the referral channel to reduce your hiring costs. After all, referral spend is money distributed to the inside of the organization.


#3 Employer Branding


The world today is highly social and so are your employees. A good employee referral program encourages your employees to share jobs on their social networks. Employees advocating positions on social networks is relatable, authentic and far more appealing to a candidate. The social proof of an employee’s experience helps the candidate choose your organization over the other.


#4 Better Results


It is known that employee referrals drive a higher quality of hire. There are two reasons for this behavior.

1. Employees understand the organization and invite friends who they know will fit.

2. Candidate has a better ownership during the hiring stage because they have been introduced by someone they know and trust. In developing economies, we have seen that the respect for their friend helps improve their ownership to an organization.


#5 Talent Retention


“It is hard to hire but harder to retain.” It is proven that referred employees work at companies longer than non-referred employees. And the satisfaction to fit and ability to fulfill the requirements of the job increases from time to time. In fact, it is also proven that employees who referred stay longer.


These are the five reasons why it is crucial to put efforts and implement a good employee referral program. Some of the top employer brands in the world have a robust referral program. Are you on the list yet?

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