We, at PowerHouse Learning, are advocates of employee referrals. Why you ask?

A great referral program will not only boost the morale of your existing team but it will help you identify top talent that may not have been looking for work or considered your organization.

Not only that, but your existing team knows your culture, and they understand what skills (including soft skills) are needed to excel in the organization.

We don’t want to bore you with statistics BUT hang in there because these are pretty impressive:

SmashFly conducted the online survey in April 2015. It included responses from 114 talent acquisition and HR professionals. Among respondents, 77% said they currently have a formal employee referral program, and on average, 32% of new hires originate as referrals. It’s also drives the highest-quality candidates compared to other sources.

According to CareerBuilder, 82% of employers rate employee referrals above all other sources for generating the best return on investment; 88% of employers rated employee referrals above all other sources for generated quality of new hires. 

Jobvite index 2012 stated referred hires have greater job satisfaction and longer retention: 46% stay over 1 year; 45% after two years; and 47% after 3 years.

It’s hard to argue with those numbers especially when you look at these additional benefits:

  • Better cultural fit
  • Reduced costs and less wasted time in placing positions on job boards, searching through stacks of resumes, interviewing non-qualified candidates, and onboarding new employees
  • Stronger Employer Brand: Your employees are there every day working with the management team and their peers. In most instances they know the in’s and out’s of their job more than their managers. Who better to recruit for your company?
  • Low risk factors: A well-designed Employee Referral Program will almost always produce a positive ROI and will have very low margins for failure
  • Team participation: This program speaks volumes to the team stating “We are all in this together and we want to you recruit for us. You know our company better than anyone and we are looking to you to help grow our business”
  • Increased networking: Social networking makes referral programs and potential recruiting relationships even more effective
  • Focused and targeted referrals: Your referral program must educate employees so that they understand which specific organizations/firms you would like to target, then the amount of qualified referrals increase

An employee referral program will only be as strong as the employees that work for your company. So, if you don’t want employees like you already have OR if employees don’t feel good about where they work it’s not time to focus on an employee referral program. It’s time to focus on Culture.


Interested in just having a conversation to talk about where to start? Reach out to Brandie Hinen at brandie@powerhouselearning.com for a "no strings" quick talk on what we've done with other organizations.