Back to blogs

Meet Recruiting Goals with Employee Referral Programs

Posted by
Dave Anderson
July 27, 2023

Are you tired of wasting time and resources searching for the right candidates? The solution to this problem may be closer than you think, in the form of employee referral programs. There is a good chance the people you work with every day have friends, family members, or former colleagues who are ideal candidates for the roles you’re hiring for.

Benefits of employee referral programs

An employee referral program can help you overcome common challenges and meet and exceed your hiring goals. In this article, we’ll explore all of employee referral program benefits, and how referral automation system streamlines the process for recruiters and provides referees and referrers with a positive experience. Let’s get into it. 

Connect with high-quality candidates and make great hires through employee referrals

Sourcing candidates continues to be a difficult task, especially for the most in-demand roles. A joint survey conducted by Sense and Talent Board found that engaging passive talent is the top challenge recruiting leaders face today. 

Employee referral program benefits statistics

Asking your workforce for employee referrals is a proven method for connecting with high-quality candidates who make great hires. In fact, 88% of employers say referrals are their best source of new candidates. And 45% of referral hires stay with the organization longer than 4 years (from comparison, only about 25% of job board hires are retained for more than 4 years). 

Employee referral programs lower recruiting costs

As hiring has gotten more competitive in recent years, many organizations have responded by throwing more money at the problem. Average cost-per-hire has steadily increased year over year, rising to $4,700 in 2022

Much of that cost is attributed to job board spend, even as more recruiters realize that the bulk of candidates who apply via job boards aren’t the right fit for the role. 

Accepting referrals is a cost-effective way to source top talent. The bonus paid for referring a new hire is often far less than the cost of job boards and other candidate sources. And it’s money well spent since bonuses are only paid once you’ve hired a great candidate and you’re rewarding the people you already work closely with for helping you accomplish your recruiting goals.

Employee referral programs help you source candidates faster and decrease time-to-hire

Depending on the job and industry, it can take more than six weeks to fill an open role. That’s just too long, especially since a crucial role remaining unfilled can lead to the loss of revenue, decreased productivity, and increased stress for current employees.

Employee referrals streamline the hiring process since recruiters don’t have to wait for candidates to apply or spend time proactively sourcing passive talent. Organizations with employee referral programs are generally able to fill roles in less than a month and say referred candidates are 4-5X more likely to be hired. 

Automate your employee referral program

If referrals are so effective, why don’t more organizations have an employee referral program? The reason is manually keeping track of referred candidates is challenging and time-consuming, and most recruiting platforms lack the functionality to automate the process. And there is the extra step of making sure the person who referred the hire receives their referral, which can require working with the finance and payroll departments. 

A referral management system like Sense automates the entire referral process, from sourcing to reward payouts. The talent relationship management platform also integrates with different ATSs so the candidate is automatically entered into the hiring process and labeled as a referral — making it easy to keep track of them like a candidate from any other source. 

Make the employee referral process transparent

Another disadvantage of accepting referrals without an employee referral management system is that both the referee and referrer are often left out of the loop during the hiring process. The referrer may be unsure where the candidate is at in the process or if the recruiting team even looked at their resume/application, while the candidate may feel they would have been better off applying directly for the job themself.

A referral management system provides transparency for both parties throughout the hiring process. After a custom application URL is shared with the candidate, the referrer can log in and see what stage they’re at in the hiring process. And the candidate will receive a confirmation email letting them know that the recruiting team is reviewing their application/resume so they know they’re under consideration.

Boost your employer brand through employee referral programs

Today’s recruiting teams are investing in creating an employer brand that showcases their organization as a great place to work. But let’s be real, nothing beats a personal recommendation from an employee who actually works for you. A study from LinkedIn found that candidates trust real employees three times more than a company’s employer branding messaging. 

When an employee refers someone in their network, it’s a vote of confidence in your organization, leadership, and the day-to-day employee experience you provide. Top talent has a lot of options in where they work, and a current employee recommending your organization encourages them to choose your opportunity over the others they’re considering. 

Analyze your employee referral program

Recruiting leaders are expected to analyze, report on, and continuously optimize their hiring processes. They need to know which candidate sources are most effective, so they can determine how to best allocate their team’s time and budget. 


A referral management platform comes with powerful analytics that makes it easy to understand how the program is performing. Recruiters can track metrics such as the number of referrals received, the number of hires made from referrals, the time it takes to fill a role through referrals, and the payouts made to referrers. With these analytics, recruiting leaders can make data-driven decisions on how to optimize the referral program and drive better results.

Gamify the employee referral experience

Beyond helping someone they know and trust get a job and collecting a bonus, your employees get to have fun with each other by participating in your referral program. An employee referral management system includes leaderboards, point redemption, and other gamification elements that foster a sense of friendly competition among your employees. 

Employees are able to see how they stack up against their colleagues when it comes to referring candidates. You can even give different rewards or prizes to employees who top the leaderboard so you encourage everyone to participate and create a sense of camaraderie across your workforce. 

Ready to learn more about the power of employee referrals? 

Savvy recruiters know that referrals help them overcome different recruiting challenges and progress toward their recruiting goals. The key is to take advantage of a referral management system like Sense to automate the process and make life easy for recruiters, referrers, and candidates.

If you want to see Sense Referrals in action, check out our recent webinar on-demand.

Read more