Why Recruiters Say Employee Referrals Are the Best Talent Source

It is never easy for recruiters to find quality candidates in a crowded job market, especially when a high volume of candidates makes it difficult to sort out the best ones. It is now more challenging to justify the effort, resources, and time to hire great candidates due to remote work.

Recruiters should take advantage of employee referrals to find qualified candidates as they are the most reliable, accessible, and underutilized resource. By leveraging their relationships with existing employees, HR departments can find other candidates worthy of consideration. The value of your employees lies in their ability to find the most suitable candidates in a fraction of the time and at a fraction of the cost of other candidate-sourcing channels.

Employee referrals are a great source for getting the talent you need to grow a company at all stages of the company’s lifespan, but especially in the early years. An job portals on an applicant tracking system makes it easy for employees to refer candidates. 

There are several reasons why employee referrals are such a valuable sourcing channel:

Reduce hiring time

Your employees are your best source of finding talent because they provide you with access to their contacts. A lot of time can be saved by eliminating the sourcing, screening, coordination, and negotiation cycles from the hiring process.

Hiring quality

Globally, passive candidates account for the majority of the workforce. In most industries, the top talent is often already working at great and secure jobs, despite recent changes in the job market that have increased applicants. Thus, they may not actively seek out new job opportunities, though they may be open to possibilities. This type of candidate can be reached through referrals. In addition to understanding your vision, mission, culture, and atmosphere, employees can share why it is good to work with others.

Reduce cost per hire

Various factors lead to a reduction in cost per hire with referrals:

  • Your employees source candidates.
  • Initial screenings are made easier by referrals.
  • A shorter time to hire means a lower cost to the organization.
  • The cost of placing job ads is reduced.

Increased retention rates

Before your new hires start working for you, they will have the opportunity to learn about your company from your employees. Referrals know what they’re signing up for, so they make informed decisions. As a result of their friends in the organization, they are more likely to stay longer and reduce attrition. Also, workers who refer their friends to the company hold a higher level of trust in it and are more likely to remain. It’s possible to use your referral program as a way to gauge employee satisfaction, as well.

Referral gives a helping hand to your hiring team

The second set of hands can always be helpful when you are scaling or trying to fill positions that are hard to fill. Referrals from employees are an excellent source of candidates when you don’t need to add more staff just for a season.

Referrals are good to attract cultural fit

Employee Referrals also attract people who work well with the company’s culture. As a result, referred candidates already know someone at the company and understand its culture. That means they are more likely to be people who are already attracted to the company’s culture.

Promotes Employer Brand

You cannot compare the words of an employee to Glassdoor reviews or culture videos. Additionally, employees who invite friends and family to apply for open job positions empower them to become advocates for your company.

Attract prospective customers 

Employees who build brand awareness among their connections are not just reaching out to potential candidates; they’re also reaching out to potential clients. If your employees’ connections speak highly of your brand at their companies. That could lead to the brand being talked about more widely.


Ensure you have the right sourcing basics in place before hiring through referrals. Make sure you don’t rely solely on referrals to source talent and watch out for common pitfalls. If you don’t want your diversity to suffer, you need to follow the standard hiring process and stay connected with candidates. Even if you have to reject candidates gracefully, you should never leave them hanging.

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