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ROI of Employee Referrals


In today’s competitive business environment, understanding the Return on Investment (ROI) of employee referral programs is crucial. This blog explores how implementing such programs can significantly cut recruitment costs and reduce employee turnover, with a focus on ERIN’s approach to enhancing these programs.

Reducing Recruitment Costs with ERIN

ERIN’s platform is designed to source and hire more referrals, substantially decreasing the cost-per-hire compared to traditional hiring methods. This reduction is pivotal, as it impacts the overall budget allocation for talent acquisition.

Impact on Turnover Costs

A key aspect of referral hires is their tendency to stay longer in the organization. This longevity reduces turnover, which in turn, impacts recruitment, onboarding, and training costs positively. The savings here are two-fold: direct costs of hiring new employees and the indirect costs associated with turnover.

Calculating ROI with ERIN

Reduced Recruitment Costs:

   – The calculation begins by comparing the number of referral hires with ERIN to those without it.

   – Then, the difference in traditional cost per hire and referral cost per hire is assessed.

   – Multiplying ERIN-sourced referrals with the savings per hire gives a clear picture of the reduction in recruitment costs.

Reduced Turnover Costs:

   – This is calculated by comparing the retention rates of referral hires with and without ERIN.

   – The increase in retention percentage is multiplied by the ERIN-sourced referrals.

   – Finally, multiplying this by the cost per employee turnover provides the reduction in turnover costs due to ERIN.

Want to find out your ROI with ERIN:

    – Use this link to use our ROI Calculator,


Implementing an effective employee referral program like ERIN can significantly enhance the ROI of recruitment efforts. By reducing both recruitment and turnover costs, companies can achieve a more efficient, cost-effective hiring process, and foster a more stable and engaged workforce.

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