How to Develop an Employee Referral Program

This series is written for two readers:

  • Those who haven't developed an employee referral program (ERP) yet but need to get started.
  • Those who have started but need to improve their employee referral program.

For those who have a program and those who don't, this content is intended to give you tools to get you started on making your employee referral program a major source for great candidates.

Chad Harrington

Image credit: Deposit Photos

Image credit: Deposit Photos


Employee referrals are statistically the top source of hire in the United States. Those statistics come from employers, recruiters, and researchers.

However, only 71 percent of companies surveyed, have a defined employee referral program (ERP). Yet up to 40 percent of hires come from employee referrals.

For example, a "Source of Hire" survey of 50 large U.S. companies reveals that companies filled 20 percent of their hires from employee referrals, making referrals the top source of hire for large U.S. Companies. That's 100,000 hires from employee referrals in one year from a mere 50 companies alone.

Another report found that "employee referrals was one of the top recruiting sources for 92 percent of the participating organizations." They surveyed 1,000 recruitment representatives for that study. 

What is an Employee Referral Program (ERP)?

An employee referral program (ERP) is any way to organize job candidates that come from referrals. Referrals come from your company's social network, which includes employees and non-employees connected to the company in some way.

A beginner's guide

In this series, we’ve created the reasons and means for creating an effective ERP. Here’s a beginner’s guide in three sections:

How have you developed your EPR? Drop us a line.