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The future of employee referrals after COVID-19

A new benchmark study of 350 companies around the world show 72% have employee referral programs, but only 4% are “power users” leaving huge room for growth.

In this article

AUSTRIA, Vienna – July 12th, 2021 – When it comes to recruiting following the pandemic, there’s been one channel that stands out: employee referrals. The reasons are clear: referrals save on hiring costs, they’re usually a great cultural fit and the application process is dramatically shorter than other recruiting channels. Firstbird conducts an annual global study of 350 companies that’s growing in popularity every year, to determine benchmarks for internal employees referral programs, with enterprises from Germany, Netherlands, The United Kingdom, The United States and Australia, participating this year, amongst many others.

Most companies have referrals programs, but few are used to their full potential

A major finding of this year’s study indicates that although 72% of companies use a referral program for their recruiting, only 4% reach true potential and are “power users”, meaning they can hire 30% of their employees through referrals. This indicates that there is still huge potential to be seen for many companies, and with many enterprises now turning to referrals to offset the recruiting challenges posed by the pandemic, this percentage is set to grow in the coming year.

“We know employees are at the heart of every organization, and what’s great is that we are now seeing a trend where enterprises are truly understanding the value of having a successful referral program”, said Arnim Wahls, CEO of Firstbird. “We know from our experience, and now our research, that there are a couple of things that can greatly impact the percentage of hires you can get through referrals. And if you do these things right, regardless of the size of your company, you can get your referral hires up to 30% of all your hires, or even more. For many of our customers, referrals are currently their most valuable recruiting channel at this time, and we are looking forward to helping many more enterprises raise their standards in the coming months.”

This year’s major findings also suggest that an attractive incentive program (which does not necessarily mean large sum cash rewards), regular reminders for the referrers and an easy-to-manage (digital) program can make a big difference when it comes to hiring a high percentage of referrals.

When it comes to rewarding: split it and show appreciation twice

The study revealed almost all companies (92%) give cash rewards to motivate employees for referrals. The majority of cash rewards sit in the €501 – €1,000 category, which is less than last year. And while most companies pay the reward out in one lump sum, the study confirmed that if the reward is split and paid out in stages, more referral hires will be received. 

Additionally, it’s been proven that a little can go a long way when it comes to communicating a referral program internally. Employee events, such as small-town hall meetings where employees can take time to learn about the referral program and why their referrals are valued, for example, can be far more effective and lead to significantly more referral hires than other more diluted forms of communication. So companies should think quality over quantity when building their referral program communication strategy. 

The entire study report, which includes lots more interesting findings, is available to download free here.

About Firstbird

Firstbird is the global leader in digital employee referral programs for enterprise companies. With Firstbird, employees become brand ambassadors and referrals become a company’s most successful recruiting channel. With significant expertise implementing employee referral programs in enterprises around the world such as McDonald’s, Arvato Bertelsmann and Deloitte, Firstbird offers the technology, strategic advisory and service in all areas that influence the long-term success of a referral program. To learn more at www.firstbird.com.

For more information, press only:

Majella Grawatsch
PR Manager, Firstbird
majella.grawatsch@firstbird.com
(+61) 412 253 950

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