The Power of Employee Referrals on Your Entire Organization

Todd Kunsman

Marketing Team Lead

13 minute read

Employee Referrals.

How many of your employees are already on social?

Typically, when you think of the term “employee referrals” your mind may go to the impact on human resources and hiring benefits. And it makes sense, especially as this strategy has been a favorite and most productive way to find talent.

But, as important it is for HR (more on that in a later section), the method of employee referral actual benefits numerous departments of any organization.

While the concept might not be overly complicated, explore with me further and learn how to apply a successful employee referral program that impacts your entire organization.

Below, we’ll cover a few important items. Feel free to skip ahead to a desired section.


What is an Employee Referral?

As I mentioned in the introduction, most people refer to this method when it comes to sourcing talent and hiring.

If we want a clear traditional definition:

“Employee referrals are structured programs that companies set up to find talented people by asking their existing employees to recommend potential candidates. “

However, with the growing digital space and opportunities for employees to reach their friends and colleagues, employee referrals impacts well-beyond the role of hiring.

For the team at EveryoneSocial, we see employee referrals having tremendous value in various areas of any organization. So if you were looking primarily for information related to just hiring and recruiting, you’re going to find a bit more than that here.

Going back to the original definition of employee referral, let’s revise it slightly:

“Employee referrals are structured programs that companies set up to impact the core areas of their organization by asking their existing employees to become brand representatives. Thus, helping drive results in marketing, sales, and recruiting.”

Where the Employee Referral Typically Happens

Before diving into the benefits of employee referrals on the above mentioned departments, let’s cover exactly where the referral process typically happens.

This can be broken down into three core areas:

Word of mouth – This is quite simple, but this mean employees are passing news or information to others rather than it being in written communication. This could be in-person with friends or on the phone, at networking events, etc. Just talking about the company, jobs, solutions, services, etc. with others.

Social Media – When it comes to employee referrals, social media is quite hard to ignore. Social networks like Twitter, LinkedIn, and Facebook offer massive reach and most employees will have one, if not more, social accounts. Close to half the world’s population (3.03 billion people) are on some type of social media (Source). So it makes sense that these social networks will be incredibly important for effective employee referrals.

Miscellaneous Mediums – While the above two are probably the strongest areas for employee referrals to take place, there are still some other mediums of where it can happen. Think places like via email, text or chat apps, blog posts, forums, etc. Employees can be pretty active in multiple places where there are options for them to refer your company and product or services.


The Benefits of Employee Referrals On Your Organization

As I mentioned and alluded in the above sections, the benefits of employee referrals go well-beyond hiring top talent. Of course it is still a big portion, but there are numerous positive business impacts on marketing and sales as well.

But, I’ll start with the benefits to social recruiting and finding talent first.


Recruiting & Hiring

Since you most likely are familiar with the impacts on recruiting and hiring I’m going to start here. The hiring landscape has changed and sourcing for talent is time-consuming, expensive, and does not always yield great results.

Generally, hires from employee referrals improve the quality of candidates who apply, increase retention rate (referred hires staying with the company longer), reduces time and costs of hiring, etc.

And the data that is out there continues to show why employee referrals are so important and why most people assume it strictly applies to your human resources department.

  • 47% of referral hires have greater job satisfaction and stay longer at companies. (Jobvite)
  • Employee voice is 3x more credible than the CEO’s when it comes to talking about working conditions in that company. (Edelman Trust Barometer)
  • Employee referrals have the highest applicant to hire conversion rate – only 7% of applicants are via employees but this accounts for 40% of all new hire hires. (Jobvite)


Naturally, employee referrals are beneficial for hiring but there are also marketing benefits as well. Typically, this will come from the power of employees sharing to social media.

98% of employees use at least one social media site for personal use, of which 50% are already posting about their company (Weber Shandwick). And that number is continuing to rise.

No longer can organizations ignore it or block employees from getting involved. By letting employees share blog content, branded content, or industry news, your organizations employees are referring their networks to the brand.

Employee referral marketing benefits:

  • Increasing brand visibility
  • Driving more web traffic
  • Boosting leads and quality of leads

In a Nielsen study, they found that 92% of people trust recommendations that they get from friends. Family and even colleagues over any other kind of marketing, promotion or advertising (Nielsen).



When there is an impact in marketing, there typically (and should be) and impact on sales as well. Employee referrals, no matter which method, will help drive sales results.

These can impact revenue, win rates, deal size, to driving more quality leads to sales who are already warmed up (thanks to the employee referrals).

Think about it.

Even a small percentage of your organizations’ employees sharing information, talking about it to others, or emailing friends or colleagues who are looking for product or services can impact the sales cycle and help drive revenue.


Related: Dell activated over 10,000 employees online to be active brand advocates that drives marketing and sales results through employee referrals. Get the case study to learn more.


Building an Employee Referral Program That Works

Your company probably already has some version of an employee referral process in place, but it’s important to know what makes one succeed and grow.

And since an employee referral program goes beyond hiring, your program should be a bit more robust. However, here are a few elements to keep in mind when developing a strategic employee referral program and strategy.

Ensure Employees are Aware – Your organization must instill the value of referrals, employee involvement, and the benefits for employees and their company. Communication is key for an employee referral process to work and for a program to be highly engaged.

Incentives – Employees already have a lot on their plates, so you need to make this worth it for them to get involved. Incentives are a great way to do so. This can be cash or non-cash incentives such as extra holidays, paid lunch, employee recognition, other work opportunities, or even just a simple acknowledgment. Monetary items are not always the best incentives, but recognition is great for employee morale.

Ease of Use – Your company’s employee referral program should be as easy as possible for your people to use and engage with. This means make the strategies simple to understand, provide training sessions, and give them easy to use tools. A popular platform to use is an employee advocacy program, which can be used for all aspects of an employee referral strategy. Employee advocacy programs make it easy for access to content, work culture media, user-generated content, gamification and leaderboards, in-depth reporting, and more.

Great Content – Besides word of mouth referrals, much of your organizations referrals will come from online like social media, email, chat, etc. This means, you need engaging content that is easily accessible to most, if not all employees. Content that shows what it’s like to work at your company, educational and informative information about your industry, user-generated content that gets employees involved, videos, images, etc. This will be content employees want to share and content their audiences will value.

Collect Feedback – As always, keep your employees posted on the status of their current efforts. How has their social shares impacted the company? How has any candidates they recommended move forward in the hiring process? And just as important, listen to their feedback about your company’s employee referral initiatives. Get them involved and learn how your organization can keep employees more engaged and get more employees active on behalf of your brand.

Measuring Impact – With any referral program, you should be measuring the impact it has on your business. If it’s for marketing and sales, using technology like EveryoneSocial can work and integrate with your reporting metrics. You always want to tie back what impact your employees are having when they share content to social, or sharing job listings, etc. You also want to keep track of leads, new hire referral numbers, revenue generated, cost savings, and employee engagement.


Final Thoughts

There is no question that employee referrals are incredibly important for hiring and sourcing talent.

But, with the digital shift and value employees bring outside their specific job functions, employee referrals are even more powerful than ever.

Today, your organization should have an employee referral strategy in place because it drives real marketing results, positively boosts sales, and of course helps your recruiting efforts.

So the question is, does your organization value employee referrals as much as it should?


Want to make it easy to drive results in marketing, hiring, employer branding, and sales via employees? Learn more how EveryoneSocial helps large and enterprise companies do just that. Schedule your personal demo.


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