Why Employee Referrals are so Powerful

There’s an old adage that says, “It’s not what you know, but who you know.” When it comes to finding a job, this is definitely true. While a great resume and skill set certainly helps, landing a job through an employee referral has proven time and time again through research to be much easier than simply sending in an application online without knowing anyone at the company.

Employee referrals are a win-win for everyone involved. Companies and hiring managers like them because it saves time and money in the hiring process. The employee who gives the referral likes it because they feel more involved with the company’s future. And the employee who gets the referral not only secures a new job but also already knows at least one person at the company.

When you receive a referral, you are 4x more likely to be hired, according to LinkedIn! Also, statistics confirm that employees who are hired via referrals also stay longer at companies.

So, how do you go about landing a referral? The answer is through targeted and specific networking with other professionals in your industry. LinkedIn is a great resource to reach out to former colleagues and ask if they can put a good word in for you. Another great way to gain a referral is by joining a professional association and developing relationships with other pros in your field.

Empire Resume will delve into why employee referrals are so powerful, including why HR managers like them so much and how you can get one.

Why HR Managers Love Referrals

One of the biggest reasons HR managers like employee referrals is because it shaves time off the hiring process. Recruiting and hiring are very time-intensive, and interviewing a candidate recommended by another employee typically decreases the amount of time to make a hiring decision. This is primarily because HR managers have more confidence in referred candidates.

And saving time, of course, also means saving money. A shorter hiring process means less money spent on paying outside recruiters and posting online job advertisements. Some companies offer employee referral bonuses, but they’re usually a fraction of the cost spent on recruiting activities.

HR managers also like referrals because it boosts engagement and helps their workplace culture. Current employees feel more trusted and more involved with the company’s decisions if they make referrals. And when a referred employee is hired, they usually feel more engaged from day one because they have a trusted friend at the company who can act as a mentor and break them in.

Lastly, hires made from employee referrals tend to stay longer at companies than those hired through other ways. This is because employees hired via referrals typically have a better understanding of the company and find it easier to assimilate into its workplace culture.

More than half (56%) of employees hired via referrals said they plan to stay with their current company for more than five years, according to a study by medium.com.

How to Get an Employee Referral

Getting an employee referral isn’t very difficult, but there are some things you’ll want to avoid doing. Asking for a referral can be a big ask of someone, so you’ll want to ensure you have a strong working relationship with the person. When someone refers you for a job, they’re putting their own reputation on the line.

If you’re good at professional networking, asking for a referral shouldn’t be too hard. Networking skills are incredibly valuable, and it’s wise to always network throughout your career, even when not actively looking for a new job.

As we mentioned, LinkedIn is an excellent resource for networking and obtaining a referral. Make sure your LinkedIn profile is as complete, professional, and impressive as possible, and then begin reaching out to contacts you have a strong relationship with. If you impressed them with your work in the past, then they’ll likely have no problem giving you a referral.

However, it’s essential to understand etiquette when making the ask. Instead of flat-out asking right away, you should rather ask politely if they know of any job opportunities at their company and if they’d be willing to refer you. Never assume someone will refer you, and don’t take your relationship with them for granted.

Joining a professional organization or attending local networking events is another way to build relationships that can help you get referrals. In the course of meeting people in your industry, you can build trust with others and seek job-hunting advice from them. Ask them about what they do and about their company. Don’t be too eager, but naturally inquire if you think you’d be a good fit for any positions that may be available at their company.

The trick to gaining employee referrals is to continuously network with others in your industry. Over time, you’ll build solid relationships and make good friends who can help you out. If they’re very impressed with your work, they may even reach out to you first about possible opportunities.

The Best Way to Land a Job

Employee referrals were the top source of all hires in the U.S. in 2016, according to a study conducted by the Society for Human Resource Management (SHRM). The study analyzed more than 14 million job applications and more than 1,000 companies. Employee referrals accounted for 30% of all hires, while recruiter-sourced hires only accounted for 19% of hires in the study.

The bottom line is employee referrals work, usually for everyone involved. Getting a referral continues to be the best way to land a job and, once you get that job, you’re more likely to stay at the company for a longer tenure.

Many companies also have established employee referral programs, where workers who make successful referrals get a financial incentive. In 2020, the average employee referral bonus was $2,500, according to Apollo Technical, an IT and engineering recruitment agency. So, when you’re networking and asking for referrals, remember that some people may gain from your success, too.

Stay tuned to Empire Resume’s blog for more insights on careers and employment, including articles like How to Negotiate Your Salary, Potential Red Flags in a Job Interview, and Best Fintech Companies to Work for.

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Maria Gold is a Content Manager/Writer for Empire Resume. She is dedicated to helping educate and motivate people with the latest career articles and job search advice. Her interests range from writing to programming and design. She is also passionate about innovation, entrepreneurship, and technology.

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