Employee Well-Being Impacts Your Recruiting Efforts

We know that one of the most effective ways to recruit is using employee referral programs. Last year, SilkRoad reported that employee referrals in the U.S. accounted for 57% of interviews and 61% of hires. So we agree – employee referrals are important to our overall recruitment efforts. But, how does this relate to employee well-being?

While we talk about how successful employee referral programs are, we don’t always talk about what makes them successful.

And it’s not the referral bonus.

A quick side note about referral bonuses: I’ve often said that organizations need to pay referral bonuses that align with their cost per hire. For example, if your cost per hire is $5,000 then paying a $25 referral bonus six months after the new hire starts isn’t … well, it just isn’t. I can’t tell you what to offer, but do consider the savings when you are having this discussion. Then build your bonuses accordingly.

The success of employee referral programs lies in organizational culture. If organizations want to benefit from employee referrals, then they need to have cultures that allow employees to meet people. Which means employees need some sort of work-life balance to feel like they can take time to attend networking events, association meetings, etc. It means they need to feel good about their job and their work.


Organizations that want employee referrals need to make sure they are building a culture that encourages employees to make referrals. Employee referrals don’t happen just because you set aside money in the budget. I’ve worked places where employees made referrals with no program in place. They enjoyed working there and proceeded to tell their friends. The money is just an extra.

(Please note: This doesn’t mean you should eliminate employee referral bonuses. The employee just saved the company a whole bunch of money. Thank them for it. The point is money isn’t the motivator.) 

Of course, another consideration with employee referral programs are former employees. We must move past the mindset that every employee who leaves us is disengaged and disgruntled. Past employees are, or can be, a great source of employee referrals. That is if they feel the company was a good place to work and will treat their referral right as an employee.

Organizations cannot recruit by employee referrals alone but referrals are an essential part of any recruiting strategy. But they only work if the culture allows and supports it.

Image courtesy of Sharlyn Lauby

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