When it comes to landing a job, it’s true what they say: sometimes it’s not about what you know, but about who you know. You only have to look at the numbers to know that employers place a lot of value on candidates for whom an existing employee has put in a good word: in the U.S., seven in ten employers have a referral program, with referrals accounting for between 30% and 50% of all hires.
Firms gush over the benefits of hiring a friend of a friend — or rather, an acquaintance of an employee. It’s a cheaper and quicker way to fill a role, for one. 70% of employers also think that referred candidates are a better culture fit; “A-plus people know other A-plus people,” BuzzFeed’s talent VP Joel Greengrass once summed up.
That’s not to say that it’s futile to apply for a job without a contact already on the inside, but are there some American companies that are much more likely than others to hire from their pool of employee referrals? To find out, Switch On Business took a peek through Glassdoor, analyzing how often major U.S. companies recruit a referred candidate.
About This Study
For 1,493 top U.S. companies, we used Glassdoor interview data to retrieve the proportion of interviewees who had both ‘employee referral’ recorded as the reason for getting an interview there and had received a job offer. This gave us the top companies overall, within the Fortune 500 list and per sector that were the most likely to hire a referred employee.
Key Findings
- Cloud computing giant Salesforce hires 41.64% of its employee referrals — that’s more than any other U.S. company.
- After Salesforce, mining firm Devon Energy hires more (26.23%) employee referrals thanany other Fortune 500 company.
- Meanwhile, Northern Trust hires more (25.25%) referred employees than any other company in finance. Coinbase (22.61%) ranks second.
- The Salem Media Group (25.98%), Activision Blizzard (25%) and Buzzfeed (20.27%) are among the top media companies to hire referred employees.
Salesforce Recruits More Referred Employees than Any Other U.S. Company
If a Salesforce employee refers you for a job, you may just get it. That’s because 41.64% of Salesforce job offers go to referred employees — a higher rate than any other company in the U.S. The cloud-based software giant encourages employees to refer fresh talent with competitions, recruitment happy hours and awards (like tickets for San Francisco Giants events), bestowing cash bonuses of $2,000 on successful referrers.
Don’t just take our word for it: “Referrals are a primary source of hire for salesforce.com,” comments Kate Israels, the firm’s Director of Talent Experience & Recruiting Programs. “In fact, employee referrals are 10 times more likely to be hired than other sources.”
In sixth place comes Booz Allen Hamilton Holding, one of the most prestigious consulting firms in the country. Here, just over one in four (26.11%) jobs go to candidates who have been referred, with the company paying out an impressive $3,000 bonus to successful referrers. “If someone recommends a candidate, they’re a priority for me,” writes Karen Mullikin, a recruiter for the company.
Devon Energy Is Among the Most Likely Fortune 500 Companies to Hire a Referred Candidate
Landing a job at a prestigious (and competitive) Fortune 500 company can seem like an impossible task without knowing someone already on the firm’s payroll. After Salesforce, the multi-billion dollar mining giant Devon Energy is the most likely company on the exclusive list to recruit from its pool of referred candidates, with 26.23% of its job offers going to employee referrals. Here, like Booz Allen Hamilton, a cash bonus of $3,000 is awarded to employees who make a successful referral.
Also on the list is Intel (17.84%), another company that offers sizable bonuses to employees who make successful referrals. In the company’s quest for a more diverse workforce, Intel doubles its typical $2,000 referral bonus for anyone who puts forward a successful candidate who is a woman, a veteran or of an underrepresented minority.
How Likely Are Different Industries to Hire a Referred Candidate?
“Seeking a job in tech is now very much like seeking access to an exclusive dating app,” writes entrepreneur Alexandre Kaykac, commenting on the trend of tech companies incentivizing employee referrals. Our research echoes this: the average rate of job offers made to employee referrals in tech is 17.37% — higher than any other industry.
Nutanix and HubSpot Are Among the Top Tech Companies Hiring Referrals
There’s been a lot of talk about cash bonuses so far, and it’s no wonder — seven in ten companies believe that cash bonuses are the most effective compensation for employees who make a successful referral. In tech (where jobs often come with six-figure salaries), those referral bonuses can be even more astonishing. Take HubSpot, for which 24.76% of job offers go to referred candidates (the sixth-highest proportion of any tech company) — it offers referral bonuses between $10,000 and $30,000.
But before HubSpot is the cloud computing firm Nutanix, which (after Salesforce) is the most likely (30.73%) company in the tech industry to hire from its pool of referred candidates. Also making the cut are DocuSign (23.77%), Broadcom (22.37%) and ServiceNow (21.60%).
20.34% of Avnet Hires Are Referrals — More Than Any Other Retail Company
Avnet ranks as the top retail company for hiring referred employees, extending job offers to two in five (20.34%) referrals. Alongside an employee referral scheme designed to attract “seasoned IT professionals,” the electronics company scours for fresh talent on social media and recruitment websites, uses in-house and external recruiters and hosts recruitment events.
GameStop also makes the cut, hiring one in ten (11.28%) referred employees. But, writing on GameStop’s subreddit, one worker believes referrals from senior employees are considered more valuable: “Employee referrals from an SGA [Senior Game Advisor or shift leader] and under usually don’t hold much stock. They may prefer to see more management referrals.”
Northern Trust Hires More From Employee Referral Pool Than Any Other Firm in Finance
Considering that it’s the most desirable industry for Gen Z job hunters right now, it’s likely that having a good word put in for you at a top finance company is a game-changing advantage. Wealth management firm Northern Trust is the most likely of any firm in the sector to hire referred employees, offering jobs to a quarter (25.25%) of them.
Coinbase (22.61%), Rocket Companies (22.38%) and Arthur J. Gallagher (21.89%) come next. PayPal just makes the cut, hiring 14.70% of its referred employees. Landon Allen, a Talent Acquisition Manager at PayPal, comments: “When you’re dealing with very niche recruitment, you have to rely on who you know, how you know them, and why they are good.”
BuzzFeed Is Among the Most Likely Media Companies to Hire a Referred Candidate
They say media and entertainment are among the hardest industries to get into, so a referral might be the typical job hunter’s best shot at getting hired. Glassdoor data reveals that the Salem Media Group — a radio broadcaster and book publisher in Texas — hires 25.98% of its referred employees, more than any other company in the sector.
Activision Blizzard, in second place, hires 25% of employees from its pool of referrals, awarding cash bonuses to existing employees who make a successful referral. So, too, does BuzzFeed in third place (20.27%), which offers a tiered system of bonuses depending on the seniority of the employee hired.
Nike Is One of the Clothing Firms Most Likely to Recruit a Referred Candidate
Turning our attention to U.S. clothing companies, J. Jill hires the most (15.94%) from its pool of employee referrals. After that comes designer brand Ralph Lauren (14.74%), PVH (14.64%) and Destination XL (14.29%).
Nike is also a prolific hirer from employee referrals, offering jobs to 8.36% of them. In the wake of top talent leaving in 2022, the sneaker company (and the most valuable apparel brand in the world) began to offer $5,000 bonuses to employees who could refer new tech talent. “Employee referrals make a huge impact on our brand, company and teams because you know first-hand how important our culture is and what it takes to be successful,” wrote Nike bosses in a company-wide email.
Why Employers Like Referrals — And When They Can Be a Problem
Employers like referrals for a host of reasons. As we’ve already explored, they’re seen as cost-effective even with the cost of a bonus to think of — on average, referrals cost $1,000 less per hire than another recruitment source. Referred employees also stay in their roles for longer.
But there are downsides to a company — or an entire industry — too powered by referrals.
“People overwhelmingly tend to refer those who are like themselves,” Max Nisen writes for QZ. “A significant majority of referrals tend to be people of the same gender and race, and of a similar educational and socio-economic background. That can lead to a great deal of homogeneity in the workplace.”
There’s also the simple fact that joining a company that overwhelmingly prefers to hire referred candidates will be much harder for someone without any connections on the inside. “There is a hospital in my city that bragged about how 80% of their employees come from referrals,” comments a frustrated job hunter on an online forum. “Why have job ads at all if you are just going to let your employees hire their friends and family? I had wasted countless hours applying to jobs on their site.”
When all’s said and done, any business needs to make sure it’s balancing employee referrals with traditional recruitment methods to build a skilled and diverse workforce.
Methodology
To determine the U.S. companies that recruit the most from employee referrals, we reviewed data on job offers from Glassdoor. Companies were ranked based on the percentage of interviewees on Glassdoor who reported having received a job offer and who also reported having gotten the interview from an employee referral. Only companies with at least 50 reviewers who had received job offers were included. We considered 1,493 U.S. companies, including the Fortune 500 and those with the highest market capitalization in the tech, finance, media, retail and clothing sectors. This data analysis is correct as of February 2024.
Additional Sources
Laurano, M. (2022). Solving the Sourcing Challenge: Leaning into Referrals to Drive Improved Hiring Outcomes. aptituderesearch.com
Nagro, J. (2013). Announcing The HubSpot $30k Developer Referral Bonus. hubspot.com
Wimbush, F. (2023). The Single Most Effective Recruitment Marketing Tool. linkedin.com
Zippia Team. (2023). What Benefits Does GameStop Offer? zippia.com
Northern Trust. (2024). Northern Trust Asset Management. northerntrust.com
Cappelli, P. (2019). Your Approach to Hiring Is All Wrong. hbr.org
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