Referred Employees Are More Engaged Employees, But Only If They Come From This Source

This blog post is an excerpt from our newest study, The Impact of Job Referrals on Employee Engagement and Workforce Diversity.

Between April 24, 2017 and August 25, 2017, PayScale asked 53,000 workers if they had received a referral. Because respondents also provided demographic information and details on their current position, we were able to study the impact referrals have on engagement and pay, and which groups benefit from referrals as well as which groups are detrimentally impacted by referrals. You can check out the full study here.

Referred employees are more engaged, but it depends on the source

Similar to other research, this study found that referred employees are more engaged.

As it turns out, referred employees are more likely to report that they are satisfied with their employer and that they have a great relationship with their manager. They are also less likely to say that they intend to leave within the next six months.

A referral’s impact on engagement, however, depends on the source of the referral.


Employees who received a referral from their extended network or from targeting another employee have the highest levels of satisfaction with their employers. This makes sense, as people who take the extra effort to find someone at a company to get a referral tend to be the most excited about the company, its mission and its culture.

On the other end of the spectrum are people who received referrals from a family member or close friend. While these employees still have better outcomes than those who did not receive a referral, they have notably lower levels of satisfaction with their employer and worse relationships with their managers than the other referral groups. In fact, they are tied with the group who received a referral from a former business contact for having the highest rates of saying they intend to leave their employer.

In short, the next time some stranger messages you on LinkedIn because they are excited about your company, maybe you shouldn’t automatically hit the delete button.

To see how referrals affect your pay and what kind of impact employee referral programs have on workforce diversity, check out the study here.

Tell Us What You Think

Do you hire through referrals? We want to hear from you. Tell us your story in the comments.