Best Companies Tap Employees to Recommend Candidates for Open Jobs

Posted by Michelle V. Rafter on January 28 2014

michelle-v-rafter By Michelle V. Rafter

There’s an old saying that your friends don’t get you a job, it’s your friends’ friends. 

In other words, it’s likely that somebody in your personal or professional network knows somebody who could get you a job interview, or at the least, coffee and an introduction. How else did LinkedIn get to be as big as it is?

This theory works in reverse too. Smart companies have figured out that they don’t need to pay in-house or outside recruiters to identify prospective new hires when they can ask current employees to spread the word to friends and family when openings pop up, very often with better results. Even when companies pay employees bounties of hundreds or thousands of dollars for referring them to prospects who hire on and work out, it’s considerably less than what they’d spend staffing a larger recruiting department or keeping an outside recruiter on retainer.

  TEKsystems Employee Photo

Outside of filling job openings from current staff, employee referrals are one of companies’ preferred methods for finding new hires, along with the career pages on their websites and job boards, according to a 2013 CareerXroads study of 185,000 hires. 

Employee Recommendations

U.S. employers’ preference for employee referrals is easy to observe in the 2014 Best Companies to Work For, many of which rely on employee referrals for a substantial portion of their new hires. 

One of those is TEKsystems, Inc., the 3,500-person Hanover, Maryland, IT staffing firm that gets 54 percent of its new hires from employees’ recommendations. An account manager in the firm’s Baltimore office interviewed with the company after a TEKsystems recruiter moved into his neighborhood and started talking up the business, according to the company. Another account manager who started at the company as a summer intern before taking a permanent position helped secure interviews for four of his college roommates, all of whom now work there. 

In the past year, Umpqua Bank, a Portland, Oregon, bank, counted on its 2,397 employees for referrals that led to 55 percent of the jobs the $551 million financial institution filled in the past year. One Umpqua community area manager encouraged a waitress at a local family restaurant to apply for a position based solely on how attentive the server was, always remembering the manager’s name and favorite drink and spot to sit. The server got the job, the company says, because “her….love of customer service made her a natural fit for the Umpqua culture.”

Employee Referral Bonuses

  Genentech Employee PhotoOnce you’re on a company’s payroll, you can continue to benefit from employee referrals, earning bonuses for recommending qualified candidates for open positions. 

Four of five 2014 Best Companies offer some type of referral finder’s fee -- typically paid out some months after the person is hired to make sure they work out. More than half (51 percent) of top-rated companies pay referral bonuses of under $5,000. However 23 percent pay up to $9,999, 4 percent pay up to $14,999 and 3 percent pay more than $15,000.

In the 12 months ending in June 2013, Genentech, the San Francisco biotech giant, got about a fifth of its new hires from employees’ recommendations, paying $1,500 to $2,000 for successful referrals.

How to Find Employee Referrals

If you’re looking for a new gig, how do you get friends of friends or people in your network to recommend you? Here are a few tips to get started:

1. Build a network. You need a network in order to use it to get employee referrals. Join professional organizations in your industry or city, and attend conferences or meetings, or dial into online meetups. Don’t be a wallflower, but don’t come on too strong. When you meet people, introduce yourself, and mention that you’re looking and would love to know more about what they do and what it’s like to work where they do.

2. Use social media. Keep your LinkedIn profile updated, and join LinkedIn groups that pertain to the industry or company you’re eager to join. Stay active on Twitter, following companies you’re interested in, and people who work there. Take part in Twitter chats for job seekers, or for professionals in your desired industry.

3. Spread the word. Don’t be shy about telling family, friends and contacts that you’re in the market for a new gig. Offer to share your resume, portfolio or work samples as needed.

4. Ask for informational interviews. Whether it’s a friend of a friend or someone you met at a professional meeting or through LinkedIn, ask for a few minutes of their time. If they’re local, invite them for coffee. If they’re not, ask for a 15 minute phone call. Use the time to find out enough about the culture of the company to see if it’s a good fit for you, and whether there are openings. Follow up regularly so when jobs pop up in the future, they’ll think of you.

5. Use GreatRated.com to find connections. At the bottom of every company review on this website you’ll see a feature called People in Your Network that’s tied to LinkedIn and Facebook. It displays the names, job titles and employers of people you’re connected to on LinkedIn. You can use it to follow a company’s LinkedIn profile, and to see who you might be connected with on Facebook.

If you’ve gotten a job through an employee referral we’d love to hear about it. Share your story by leaving a comment.

GreatRated contributor Michelle V. Rafter is a freelance journalist covering job hunting and workplace issues. Find her online at @MichelleRafter or www.michellerafter.com, or contact her at This email address is being protected from spambots. You need JavaScript enabled to view it. .