A survey by Towers Watson indicated that almost 54% of the participating organizations were faced with challenges in attracting employees with key critical skills in the current hiring landscape. And the results were suggestive of two key issues – a shortfall of talent with the right skillsets, or inundation of employers with an excessive skill ask.


The first issue can be reasonably addressed by mitigating the impact of the deficit of highly skilled talent through employee referrals. Employee referrals are now being accepted as the new norm for mining the right talent. Not only do employee referrals provide highly skilled candidates but also help build a compelling talent pipeline within the organization.


With a majority of the recruiting managers advocating appalling under-performing programs, they are in the know of the multi-fold advantages of employee referrals. Leading talent management functions state that at least one of three external hires come from referrals in organizations. However, the efficacy of these methods must be gauged through the lens of Employee Referral Program (ERPs). An effective ERP can be less capital intensive for your talent acquisition teams, expedite the sourcing process within employee networks, and largely reduce the cost per hire.


XDuce has handpicked the five key approaches to building a high business impact and strategic referral programs.

1. Increasing responsiveness and transparency

The ERP must have a feedback mechanism between the employer, referring employee, and candidate within three days of the referral. Providing extreme clarity in communication to keep the employee updated during all phases of hiring not only increases hiring transparency but engages the employee with clear insight into what stage their referral is in the process.

2. Incentivizing employees

A blend of monetary and non-monetary incentives for referrals in the form of cash rewards, or alternatives such as bonus vacation days or work-from-home opportunities largely showcases the organizational culture. A culture that encourages employees to select coworkers whose experiences resonate with the organization’s work ethic. Also, positive feedback for employee referrals in performance development reviews speaks of a culture that honors, respects, and recognizes employees who refer quality talent.

3. Strengthening the brand value of the organization

Provide current employees with networking and referral training sessions with content on the organizations’ mission and vision to help them best position your brand. A clear understanding of the qualifications during the selection and interview process backed by communication of those understandings to their spheres of influence is helpful.

4. Acknowledging referral efforts

Public recognition for star referrers is an acknowledgment of their effort and must be encoded in the referral program policies of your organization. Any form of appreciation ranging from awards to special recognition in local and global team meetings is extremely meaningful.

5. Actively encouraging employee referrals

Recognition from ERPs is a win-win for organizations. They gain qualified employees, and employees, in, turn, get to collaborate with qualified co-workers. The incentives earned by ERPs boost productivity and employee satisfaction in the long term.

Employee referrals are valuable and are potent indicators of the referrer’s connection with the organization. The better a candidate, the better a matchmaker the referrer is deemed to be. And, by default, a strong proponent of your organizational brand.