How Does an Employee Referral Agency Work?


Your chances of getting a job may improve when someone refers you for the position. The referring party adds strength to your application at the firm and reduces or eliminates your need to search for positions on your own. You might find success getting the job you're looking for by visiting an employee referral agency for help.

Employee Referral Agency

  • An employee referral agency, sometimes referred to as a staffing agency, is a company that refers qualified job candidates to client companies. The referring agency is very familiar with client needs and maintains a database of qualified employment leads. Some employee referral agencies are called headhunters. Headhunters commonly help fill professional-level and high-skill positions. Other referral services operate exclusively online by contacting potential candidates via email.

How It Works

  • An employee referral operation advertises to find new potential candidates and maintains a pre-existing list of people who meet basic requirements. When a position becomes available, the referral agent contacts the people who fit the job description to inform them and see if they are interested in the work. The referring agency then sends the short list of potential candidates to the client company to interview. If hired, the referral agency receives a commission for the referral. In some cases, the client company pays the agency directly and the new hire receives agreed-upon wages from the referring agency instead.

One Key Benefit

  • One of the key benefits of obtaining employment through an employee referrral service is that the hiring company is commonly more willing to give the job searcher a chance. Hiring firms go through so many applications that it isn't uncommon for many applicants to be ignored, even when qualified. Companies tend to trust the opinion and screening choices of an established referring agency and thus may prioritize the resumes these agencies send for consideration.


  • Becoming associated with an employee referral agency does also have downsides. For one, when you work with an employee referral agency, you may have to work as a temporary employee for a period of time instead of getting hired for a permanent position. Also, the pay offered when you come into a business via a referral agency may not be as competitive as a direct hiring situation.


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