Why do companies often prefer referrals for hiring new employees?

Companies often prefer referrals for hiring new employees primarily because referrals tend to yield candidates with proven trustworthiness. When a current employee refers someone, they are essentially putting their own reputation on the line, as they have a personal relationship with the candidate and can vouch for their character and work ethic. This can lead to a more reliable hiring process, as the referred candidate is likely to align well with the company's culture and values.

Additionally, those who come through referrals are often more aware of the company's expectations and environment, as they receive insights directly from their referring contacts. This familiarity can speed up the onboarding process and increase the likelihood of retaining the employee long-term, reducing overall hiring costs and turnover rates. Referrals create a sense of accountability for both the referrer and the candidate, resulting in higher-quality applicants who are motivated to succeed in the role.