Employee referrals – Key definitions

What are employee referrals? Is it just a fancy term for pulling strings? No, it’s not. Employee referral is a recruiting technique that deserves some explanation to avoid misunderstanding on the part of some companies but also candidates. Here’s everything you need to know about the terminology surrounding employee referral – what it is and what it’s not.

As a recruiter, maybe you’ve been wondering what the increasingly popular recruiting methodology called employee referral really consists of. Employee referral often falls victim to misconceptions, so we thought it would make sense to explain the term to help companies incorporate the technique into their strategies under the best possible conditions.

What is “employee referral”?

In the world of recruiting, employee referral is a structured programme that companies and organisations use to find talented people by asking their existing employees to go and fetch candidates from their existing networks.

The term “referral” comes close to “reference” and “recommendation” in that the purpose of employee referral as a recruiting method is to allow employees to recommend profiles from their own network without imposing them on the company or imposing the opportunity on the talent.

Employees can share a professional opportunity with someone they know and whom they consider competent for the position, and then it’s up to the potential candidate to decide if they want to apply or not.

What employee referral isn’t

One of the best ways to define what employee referral is, is to have a look at what it is not. There are countless misconceptions surrounding employee referrals and what it entails for a company.

False synonyms of employee referral

Employee referral isn’t pulling strings

Pulling strings has a negative connotation in the corporate context because it entails favouring one application over another simply because the person whose application was selected is an acquaintance (friend, former colleague, etc.) of one of the company’s employees.

Employee referral isn’t the same as pulling strings because referred candidates:

Are recommended by an employee, not imposed
Will undergo the same recruitment process as other candidates who apply through other sourcing channels
Will not be treated more favourably than others for their connection to an existing employee; they will be assessed on their technical and soft skills

Employee referral isn’t just a recommendation either

In the corporate world, a recommendation is when an employee (manager or same-level coworker) puts themselves forward as a guarantor for another person’s skills and entices recruiters to take interest in that person and hire them.

Although an employee referral is closer to a recommendation than a pulling strings-type scenario, recommendations are isolated occurrences and don’t follow a formal structure for industrialising the process. Plus, recommending someone doesn’t equate to referring in that referring entails that the referee decides for themselves to apply or not, whereas with recommendations, the employee actively suggests the profile to recruiters.

Here’s a recap of what employee referral is

It can be difficult to sum up what employee referral is, despite the concept being quite easy to grasp. All in all, employee referral boils down to 4 key points:

Table 1
Employee referral is...	because...
A channel for sourcing talent	Just like a job board, or LinkedIn, or a recruiting agency, employee referral is a recruiting channel that helps you identify qualified candidates. It can operate in isolation or in conjunction with other channels, depending on the company’s recruiting strategy and needs.
A recruiting method	More than a recruiting channel, employee referral is also a recruiting method that requires its own strategy and knowledge on the subject and of the different steps to get it off the ground.
A technique for retaining employees	Beyond the hiring aspect, employee referrals also contribute to a company’s employee retention strategy because they encourage staff to feel involved in company life and contribute to its success.
A recruitment marketing mechanism	Employee referral is a technique that recruitment marketing specialists use because it heavily relies on employer brand and on the way in which employees take ownership of it and communicate on it.

Employee referral terminology

Employee referral protagonists

Employee referrals implicate a number of stakeholders who each play an important role to ensure a referral programme operates smoothly:

Employees who refer candidates (referrers)
Candidates who apply through a person they know (referees)
Recruiters
Hiring managers
New employees who get hired upon referral and who can play a pivotal role once they become part of the company

Gamification

Gamification is a process that engages employees in a referral programme by granting rewards to those who participate. The type and frequency of these rewards are defined by recruiting teams as they design their referral programme. Introducing aspects of fun into corporate initiatives results in log-term employee motivation and higher chances an employee referral programme will be embraced by company staff.

👉 Discover our tool to digitalize your employee referral programme

Passive candidates

Passive candidates are candidates who aren’t looking for a new job but who could be swayed if the ideal opportunity came up. Employee referrals are particularly effective in seeking out potential candidates who are hard to identify and reach without tapping into the networks of your existing employees.

Employer brand and employee advocacy

Employer brand is the image you give your stakeholders of yourself as a company that is actively recruiting and renewing its talent. This image depends on the way in which you present yourself as a company and as recruiters, and on how your employees talk about the company. This is where employee referral, and employee advocacy more generally, stand in.

Employee advocacy involves leveraging employees as one of the company’s communication channels. Employees become employer brand ambassadors by sharing information and content about the company they work for. As regards employee referral, the first step involves sharing vacancies to help fill the positions.

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