An employee-referral program provides employers with higher-quality talent than many other recruitment methods and offers the benefits of learning about passive job candidates, expanding the recruitment pool and boosting employee morale. Additionally, employee-referral programs are cost-effective and helpful in recruiting qualified candidates for specialized positions that are difficult to fill through other channels.
A passive job candidate is one that is not actively seeking a new job. Since these candidates do not answer help-wanted advertisements in the newspaper or on the Internet, they are beyond the reach of a company's human-resources department unless the company offers an employee-referral program. Through networking, a company's employees can bring these passive candidates into the recruitment pool, often resulting in the company finding the ideal staff member for a job. Employee-referred candidates are often more skilled and experienced than those found through other channels, because the referring employee tends to screen potential candidates carefully before referring them to the company. Consistently referring poor job candidates may place an employee in poor standing with company management. Conversely, recommending top talent can inspire management to take a positive view of an employee's commitment to the company. Employee-referral programs are also less costly than newspaper or Internet advertisements, job-placement agencies and recruiters.