How Employee Referrals are Helpful To Find A job

Applying for a job as a job seeker is a stressful task, with no guarantee that the company will look at your application. It can be demoralizing to apply to the company after company looking for a job and not receiving a word back about it. That is where having a friend put in a good word on your behalf when you apply for a job is essential. When a friend, family or acquaintance puts in a good word for you or refers your name for a job, it is known as a job referral or Employee Referrals.

A job referral is a way for companies to hire new people to work for them from the people already working for them. It is a structured program to find suitable people to fill positions present in the company by asking employees to recommend job seekers

There are mainly two types of employment referrals. These are the informal referral and the formal referral. The informal referral is an employee endorsing the talents or skills of a person. They feel would be a good candidate to fill the role needed by an employer. The formal referral program encourages their employees to recommend people for a job with incentives and perks to the company. The difference between the two types of employee referral is that formal referral is by design. The company actively encourages its employees to recommend people for a job at the company. Companies want these referrals to be a good and sustainable source of employees that can be hired. 

Employment referral programs are beneficial to all parties involved. They help the company and its leaders, the referring candidates, and the job seekers.

They help these companies in the following ways:

  • Companies work on a quick time scale, and they need all their components and employees working as fast as possible. One of the ways they can be slowed down, which affects their overall productivity, is the slow acquisition and integration of new employees.
  • It can be time-consuming to look for employees, evaluate them on company needs. Then test whether they are a good fit for working in the company. A way around this problem is through the referral program. The employee referring to a candidate can make sure they meet the role requirements. Also good fit with the company. 
  • The company has lower costs when recruiting through referrals. They don’t have to spend time and money actively looking for recruits. They can skip the first part of the recruitment process and use the money for that on other areas of the company.
  • Even if a candidate has all the required skills, knowledge, and qualifications. When an employee refers to a candidate, they take the candidate’s fit with the company’s work culture in mind. This increases the chance of the company hiring recruits that will fit in extremely well with the company and the other employees.

Employee Referrals Process

  • The company may find it hard to find such people to fill the role through traditional recruitment methods.
    However, through
    employee referrals, employees of the company may know those seeking jobs who fit the profile needed by the company. They can refer these people to the company. 
  • Candidates who are applicants for a job through referrals are more likely to accept the job offer. The referred employee is more likely to stay longer at the job. 
  • The already existing employees receive a boost in morale through the Employee referral program. They receive the benefits that come with referring candidates as well as a feeling of importance in getting to suggest who the company hires. 

Employee referral programs are also very important and beneficial for the employees who refer the candidates. They receive benefits through the incentives provided by the company to refer candidates. The company has to choose the incentives provided carefully. So as to not risk the harmony of the existing work culture present in the company. These incentives will be different from company to company. The differences can vary based on the number of employees referred, the position referred, the role or position of the existing employee. The incentives themselves can vary based on quality and quantity from company to company.

Some of the most common incentives are:

    • Cash incentives are incentives based on giving the employee a bonus for referring employees to the company.
  • Days off given as a bonus for referring employees is also common these days. These extra days off are excluding the days off that the employees already had. 
  • Vacation pay is provided to employees as a bonus for referring job seekers to the company.
  • Some companies offer free training to their employees. If the employee wants to receive additional training to further their career, they can refer to a job seeker and receive it for free.
  • Some companies offer publicity or social recognition to the employee for referring a candidate. This could be recognition in the company emails or the newsletter or even an official announcement.
  • Some companies will donate a certain amount of money to a charitable cause in the name of the employee who referred the candidate to the company. 

The benefit of an employee referral program for those job seekers is simple. While referrals are not a guarantee towards an employment offer, it is a way to make sure that the company at the bare minimum views the application letter of the job seeker.

Companies receive a lot of applicants from candidates who want a job at their company. This can make it easy for one application to get lost in the shuffle. However, when an employee refers to a candidate, the application is given priority by the company. Even if the candidate is not immediately hired. They will be prioritized if another opening is available in the company in the future. 


Everything considered employee referral programs are a great way to solve a company’s talent shortage problem. They benefit those who apply for jobs, the employees who recommend the job seekers as well as the companies in many ways.  It is extremely beneficial for companies in many ways that it is one of the most used methods for companies. To fill up their companies with people most suitable for the job with the least amount of time and resources used by the company. Sign up link:-

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