Are referrals the best hires for you?

Why Referrals Make Better Hires - Sometimes

No matter how you look at it, hiring someone is a commitment. A commitment to employ them, yes, but also to spend your time working with them.

Experienced hiring managers know that words on a page can be exaggerated. But a personal referral can provide an important character reference that a resume cannot. Referrals are an attractive idea - a candidate with a trusted, positive reference from someone who already understands your company culture.

TL;DR; Don't overlook referrals when sourcing for a new position. It might be the one factor that could help you hire a better fit for your company - but it can be overused.

Why You Should Hire Referrals

Research shows that you’ll hire faster and spend less money if you simply reach out to your existing employees as the first step in your employee search. 

  1. You’ll hire more quickly, and in some cases, you won’t even have to create an ad or spend money posting it. The applicant-to-hire ratio is significantly lower with a referral, at one hire for every three applications versus one hire from every 10 candidates from an advertisement.

  2. Interestingly, the referral candidate tends to onboard more quickly; they have an internal resource that they can talk to about questions, so orientation just seems to flow better.

  3. Referred employees stick around longer, with around a 46% retention rate after a year, compared to 33% from career sites and 22% from job boards.

Less wasted management time saves money and is generally more efficient. That’s why asking, “Who do you know?” is so important to any new employee search. There’s a lower termination rate for these candidates because they just end up being a better fit, no matter what industry you’re in. Simply reach out directly to your team about their network before you launch that job ad.

Referral Trends to Watch

In 2017, in their Global Recruiting Trends, LinkedIn reviewed approximately 4,000 business-related recruiters across 35 countries. They found that there are three key resources for finding new talent:

  • #1 is employee referrals, at 48%
  • #2 is third-party websites, at 46%
  • #3 is social networks, at 40%


In 2017, PayScale, a company that aggregates pay and hiring information, surveyed 53,000 workers about their experience with referrals. The study found that referrals lead to higher levels of engagement once the employee was hired. 

In the years since this report, referrals and their successes aren't slowing down. Careerbuilder found that 88 percent of employers said employee referrals produced the highest quality hires. These hires are not just short-term culture fits. Forbes has found that they often have a higher return on investment and retention rate.

Why You Should Not Hire ONLY Referrals

Clearly, referrals should be an important part of your recruiting process. However, there is a very important reason why they shouldn't be your only source for new candidates: diversity. Relying too heavily on the network of your current employees will inevitability create a company that looks like your employees' self-selected friend groups. 

PayScale's referral study found that 41 percent of referrals reported were from friends or family and that this type of referral was only slightly more engaged than a normal hire. Even worse, the study found that white men are the most likely to benefit from a referral. White women were 12 percent less likely to benefit from a referral, men of color were 26 percent less likely, and women of color were 35 percent less likely. 

It isn't news that networking is harder for women, and especially women of color. So while referrals can be a wonderful way to pre-vet talent, it's equally important to hire diverse candidates because the result of only hiring your employee's friends? A company without diversity of race, gender identity, age, abilities, educational backgrounds, political opinions, etc.

That’s why it’s often more productive to call a professional staffing agency with a diverse network in the field you’re trying to hire. 

Find Talent


Big Money for Big Referrals

Artisan Talent is always in a nationwide search for the best creative talent and clients.

We’re always looking for the best individuals to share their creative skills with our clients, and vice versa. If you know talent — or a business that needs staffing — contact us. We'll pay you up to $1,000 per referral. Get the details here.

Have someone to refer? Submit them here today.

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