Are you making the most from Employee Referrals?

Employee referrals offer an opportunity to connect with qualified candidates who are likely to be a better cultural fit through trusted employee networks. This sourcing channel also offers a faster and cheaper way to hire than some other channels, allowing organisations to onboard great talent fast. Despite the benefits, a large number of recruitment teams aren’t utilising this untapped talent opportunity.

Eploy’s Employee Referrals module is designed to support your employee referral programme, and in this blog, we share just how important this can be to your strategy. If you want to look at how Eploy’s Employee Referrals module works, then book a demo with one of our specialists, who will walk you through the full capabilities.

Or to get you started, you can download our Employee Referrals Datasheet. 

Employee Referrals as a Sourcing Channel

The data from Eploy’s UK Candidate Attraction Report 2025 reveals that Employee Referrals perform really well when it comes to sourcing high-quality candidates for both entry-level and skilled role types. The sourcing channel is also equally effective across different business sizes, however, those teams who measure Employee Referrals regularly can attract more suitable and quality talent. You can read the full report findings in our free-to-download report.

In detail: The performance of this channel has improved further from 2023, yet its popularity across in-house recruitment teams has reduced. In the latest Candidate Attraction Survey, 68% of respondents cited Employee Referrals as a channel used to source candidates, which is a 5% reduction compared to 2023 data. 

With the scarcity of qualified candidates being cited as the top candidate sourcing challenge by 53% of respondents, as well as the anticipated stagnation of recruitment marketing budgets, Employee Referrals offer a cost-effective way to attract high-quality candidates.

Are Employee Referral programmes effective?

Employee Referral programmes have proven to be effective in attracting high-quality talent, who don’t just bring the right skills, but also are likely to be a good cultural fit. CIPD’s Resource and Talent Planning Report 2024 also recognises employee referrals as one of the top 10 effective ways of sourcing talent.

A factor that can make some Employee Referrals more effective than others is the type of relationship between the employee and the referred candidate. According to the findings of Harvard Business Review, which tracked outcomes of Employee Referrals at a global call centre, the referred candidates performed better overall than ones sourced from other channels. For every 100 applicants, referrals generated 70% more good hires than non-referrals. And after taking a closer look at the referred candidates, two spectrums were identified: ‘’strong connections’’ - candidates who were former coworkers and had known each other for more than a year, and the other end of the spectrum - referrers connected only through social media. The ‘’strong connections’’ were nearly 3 times as likely to result in a good hire, compared to the social media connections, which still were more likely to result in a quality hire compared to non-referred candidates.

Employee referrals are also highly effective due to the employee’s ability to effectively position the role and share first-hand experience with the job and culture of the organisation. According to Dr. John Sullivan’s findings, employees are often seen as more trusted sources of information when it comes to a role rather than recruiters, helping an organisation attract higher quality talent.

What are the benefits of Employee Referrals?

Employee Referrals offer a multitude of benefits to organisations who can tap into them, such as:

• Boosting Employee Engagement - Employee Referral programmes help engage and motivate employees through a variety of rewards.
• Streamlining Recruitment - Efficient Employee Referrals help simplify and streamline recruitment by providing talent acquisition teams with a pool of warm and quality candidates referred via a trusted employee network.
• Cost-Effective Hiring - Employee Referrals help reduce recruitment costs, since recruitment teams using this sourcing channel don’t have to spend additional budget on recruitment agencies and advertising.
• Good Cultural Fit - Current employees, who understand the company’s culture, are more likely to recommend candidates who align with it.
• Enhance Talent Pools - Candidates who were referred by employees and would be a better fit for another role can be added to a talent pool for future opportunities.
• Reduced Time-to-Hire - Targeted Employee Referrals help speed up the hiring timelines.

A Smart, Cost-Effective Hiring Strategy

The latest data from the Candidate Attraction Report 2025 indicates limited growth expectations for recruitment marketing budgets. While 33% of respondents expect an increase in hiring levels and 48% expect no change in hiring, this year, recruiters may be required to achieve more with less. The majority of respondents are anticipating stagnation or even a reduction in recruitment marketing budgets, which could lead to difficulties in attracting a sufficient number of quality candidates with a reduced recruitment marketing budget. This is where Employee Referrals offer a great solution for attracting high-quality, skilled candidates at a lower cost.

As highlighted by the CIPD’s Resource and talent planning report 2024 (p.16): ‘’Employee Referrals can be helpful and cost-effective in attracting candidates when the labour market is tight, and act as an incentive for employees to recommend their employer as a great place to work…’’. Employee Referrals provide an efficient, budget-friendly way to source talent by encouraging existing employees to support recruitment efforts, especially when the recruitment team is restricted by budget. 

Employee referrals also support stronger retention. According to Electro IQ’s data, candidates sourced through employee referrals are 40% more likely to stay with the business for 12 months or more, and 18% more likely to be satisfied with their jobs. This leads to greater long-term cost-efficiency, as referred candidates tend to stay in a role for longer, reducing the time and budget spent on replacing staff.

Employee Referrals Usage in Different Use Cases:

Digging into more data, according to the Talent Lab’s Annual Report, the use of Employee Referrals has grown across use cases such as volume recruitment, early careers hiring, experienced hires, and executive recruitment.

• Volume Recruitment - Employee Referrals usage is at 72% this year; 61% last year
• Early Careers - Employee Referrals usage is at 55% this year; 55% last year.
• Experienced Hires - Employee Referrals usage is at 89% this year, 85% last year.
• Executive Recruitment - Employee Referrals usage is at 59% this year; 48% last year.

Eploy’s Gamified Employee Referrals

Eploy understand the importance of Employee Referrals in your recruitment and TA strategy. That’s why our complete Talent Acquisition platform is further enriched with an Employee Referrals module, which helps talent acquisition teams unleash the potential of their employee networks to source skilled and quality talent. On top of that, it’s also helpful for employee engagement and streamlining the hiring process, as recruiters get to tap into a pool of highly qualified candidates through trusted Employee Referrals.

Eploy’s Employee Referrals include such features as:

• Employee Portal, which allows employees to view and share vacancies via email and various social media platforms, such as LinkedIn, WhatsApp and others, which can then be tracked for all referral activity. Employees are also able to use this portal to track their award points, level up and redeem their Employee Referrals points on both desktop and mobile devices.
• Access to Referrals Data through customisable dashboards, which can be created in your core Eploy system and showcase individual leaderboards, referral activity, including shares, rewards, bonuses, candidates and applications. It also makes for an easier way to track the success of this sourcing channel and identify any areas for improvement in your Employee Referrals Programme. Candidates are also automatically tagged with the referrer and channel source details, so you can really get into the nitty gritty of the data.
• Making Referrals includes full data privacy control, allowing referred candidates to remove their details with a single click.
• Managing your Referrals Programme is also easy, as you get to control who can make referrals, which vacancies are eligible, disable and enable different social networks for your Referrals Programme, as well as enable and disable the Gamification features as you wish. The rewards, bonuses and points are also fully customisable by you, allowing you to make the Employee Referrals Programme really fit around your organisation’s needs.

These and many more features are available within Eploy’s Employee Referrals module to help you make the most of your Employee Referrals Programme and ensure it’s fully reflective of your Employer’s Brand and talent acquisition strategy.

Have a look for yourself in a demo with one of our specialists, who will walk you through the full capabilities.

To get you started, you can download our Employee Referrals Datasheet.