Great employees are the foundation of any successful business, but undoubtedly – finding them can be a challenge.

An employee referral program (ERP) is a recruiting strategy in which current employees of an organization are encouraged (and usually rewarded!) to put forward suitable candidates they know personally.


If implemented properly, an ERP has the potential to improve the quality of your hires, better your company culture, and build engagement.

Unconvinced? Here are 5 reasons to develop an Employee Referral Program:

Extending your reach

 Advertising your job posting can be time consuming and costly. If you have 100 employees and each of those employees have their own 100 friends or connections – that’s already an extra 10,000 people with eyes on your job posting - You may even get a friend of a friend!

With the rise in social media use, most people have massive networks of contacts just waiting to be tapped into.

Getting more great people

 They say the birds of a feather flock together! Well your smart employees – they probably have smart friends.

While referrals only make up 7% of all applications, 46% of all hires at top performing firms are referrals.

What? You needed the position filled yesterday?

 You’re in luck!

Not only are ERPs cost effective – They’re also more time efficient.

Every second you have an open job posting, you’re losing productivity, time, ad money. However, research demonstrates that applicants hired from ERPs start their new positions sooner than an applicant that comes through a job board.

You want to keep them too?

 We get it, turnover sucks.

47% of referrals will still be with your company 3 years later. That’s pretty outstanding compared to the 14% that are sourced through job boards.

There’s also an additional benefit you may not have anticipated: if an employee refers a candidate and that candidate is hired, research indicates that they’ll also be more likely to stick around at the company longer.

An engagement boost

 If you decide to implement an ERP where your employees get rewarded for the successful placement of a referred candidate – this can be a significant boost for morale, and an easy way to keep your team engaged. 

Simply put – ERPs help increase an employee’s attachment to the organization and make them feel like they have a greater stake in the future of the company.

Just a few things to keep in mind

If you'll be rewarding the employee who put forward the candidate, consider waiting until the new hire has passed a 3-month probationary period before giving the reward.

Remember - it doesn't have to be cash. Most employees would appreciate extra time off instead of money.

As well – if you implement an ERP and receive no traction, this could be an indication of a bigger problem within your organization. If your current employees don't see the company as a great place to work, and encourage their friends to apply, it could be a sign of low engagement.

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