Personal recommendations are convincing
Have you ever noticed that employers who have friends or acquaintances working for them automatically seem more likeable to you? Especially when they tell you how much they enjoy working there, how the team works or why they feel comfortable. It doesn't matter whether the organisation is large, small, well-known or completely unknown.
It triggers a feeling in us that something must be right there because we trust that person.
When someone in your circle openly talks about their employer, it changes your perception of the organisation, regardless of what your impression was before.
In such situations, even the strongest employer brand takes a back seat. The reason for this is simple: personal relationships and real experiences from your own circle inspire more trust than corporate brands. This is precisely why employee referrals are so valuable in recruiting, because they are based on real relationships and genuine credibility.
The trust effect: reducing risk, facilitating decisions.
A simple example illustrates how strongly trust influences decisions: if you want to eat out abroad and have a choice of three unknown fast food restaurants and a McDonald's, you will probably choose what you already know. Not because the well-known brand offers particularly good products or services, but because the risk of disappointment seems lower.
However, if a good friend recommends one of the unknown fast food restaurants and reports good experiences, there is a high probability that we will change our choice.
Personal experience reduces the risk of disappointment, and this same mechanism can also be seen in recruiting.
What this means for recruiting
Recommendations from your own circle provide honest information and authentic insights. A statement from someone who actually works there is more relevant than any campaign or promise in job advertisements.
This plays a decisive role, especially in industries with high staff turnover and a constant shortage of skilled workers. Employee referrals thus offer one of the most reliable ways to access suitable talent.
How to use referral recruiting in practice
What is often underestimated in recruiting is that the potential of employee referrals can be exploited with surprisingly little effort. There is no need for expensive productions or sophisticated campaigns.
A simple example shows how easy and yet effective this can be: a team selfie with a few smiling colleagues at work, posted as a WhatsApp status or Instagram story with a short caption:
‘We are looking for someone to join our team.’
That's all it takes to create the trust effect described above. This is because it reaches many of the team's acquaintances and friends at once and shows them at work in an authentic way. Such posts seem closer, more honest and much more relevant than classic advertising on social media which we usually instinctively click away.
However, it is important that this effect is not created by chance, but is deliberately initiated.
That's why companies should actively encourage their employees to share such content – whether via their personal social media feed, WhatsApp status or in direct exchanges with their circle of acquaintances.
A proactive approach greatly increases reach and makes referral recruiting a consciously used channel rather than a ‘product of chance’.
Why appreciation is crucial
For referral recruiting to work, one thing is key:
Employee engagement must be visibly appreciated. A small bonus, a voucher or a simple referral programme is enough to signal to employees that their contribution is important. Practical experience and studies from various EU countries and the USA show that employees who are hired through referrals stay with the company longer and are more satisfied (iCIMS & Hanover Research, 2015).
This not only has a positive effect on team culture, but can also lead to higher long-term productivity and satisfaction within the team and has a significant positive impact on time-to-hire, according to Radancy's (2023) Employee Referral Report. This is also confirmed by a study by Friebel, Heinz, Hoffman and Zubanov (2022), which shows that referrals not only make the selection process more efficient, but also have a measurable positive effect on team performance and longer retention of existing staff in the company.
Conclusion
Good recruiting doesn't have to be complicated.
Employee referrals are often more effective than costly employer branding campaigns and are one of the most efficient ways to reach suitable candidates.
Above all, it requires trust, appreciation and a willingness to actively involve your own team.