The Pros and Cons of Using an Employee Referral Network

The Pros and Cons of Using an Employee Referral Network

by Angie Rupp

Having a solid employee referral network can save you thousands in recruiting costs, can increase your production rates tenfold, and can help reinforce your company culture. And yet, so many HR professionals skim over investing time into establishing an employee referral network because it can feel overwhelming, and can cost a pretty penny if the employee referral network isn’t executed strategically.

Avoid getting stuck on the cons aspect, so you can enjoy the fruits of your employee referral network labor.

The road to a solid employee referral network isn’t always a paved one. There are many twists and turns in the seemingly endless list of tasks associated with building an employee referral network that you can depend on, but if you can manage to reinforce your efforts with some deliberate decisions, your employee referral network will reap endless rewards. So, let’s take some time today to explore the pros and cons of creating an employee referral network. This post will also detail how to avoid getting stuck on the cons aspect, so you can enjoy the fruits of your employee referral network labor.

An employee referral network opens the door to a much bigger pool of applicants.

Pro: If you have a large candidate pool to choose from after you reach out to your employee referral network, you have the opportunity to decrease your time-to-fill significantly. Assuming that you have a system that helps you screen and sort through your applicants efficiently, you’ll be able to move potential quality applicants through the hiring process quickly.

Con: Managing an extensive employee referral network can be a lot of work if you don’t have the proper tools in place to communicate with potential applicants since you run the risk of not only offending future employees, but current ones as well. Using a high quality applicant tracking system that prioritizes applicant communication is key. Select a platform that allows you to communicate with applicants throughout every step of the hiring process. The more they know, the more likely it is that you’ll avoid leaving a sour taste in their mouth if they aren’t selected. Corresponding with applicants also maintains the integrity of your employee referral network because they may still feel compelled to apply for a future position that is better suited for their particular skillset.

Using an employee referral network helps bolster your employer brand.

Pro: Tapping into your employee referral network helps reinforce your employer brand because it’s likely that the employees who are happiest at their job and are a good fit will attract and promote your company to individuals who fit that bill as well. The happier your employees are, the better your employer reputation becomes and the more likely it is that you’ll draw a high quality pool of applicants to apply for your job openings in the future.

The happier your employees are, the better your employer reputation becomes.

Con: Requesting an employee referral network and then doing nothing with it or dragging your feet on reaching out to the candidates contained therein can have a negative impact on your employer brand. So, if you aren’t in a position to actively work your employee referral network and engage with job seekers who were referred, you’re going to burn a lot of bridges – both internally and externally. The key is to approach your employee referral network strategically. If you don’t have a system to manage it, then you will lose credibility and risk upsetting a lot of job seekers who would’ve been a great fit. You’ll also run the risk of hurting your reputation on places like Glassdoor where a lot of future employees go to review whether or not your company would be a good fit for them to work.

Are you looking for a system that will help you build a seamless employee referral network? We can help! And you can test it out free for 30 days. Give us a call to get started.


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