What Do Employee Referral Programs Do? : A Firm-level Randomized Controlled Trial

Friebel, Guido; Heinz, Matthias; Hoffman, Mitchell; Zubanov, Nick

What Do Employee Referral Programs Do? : A Firm-level Randomized Controlled Trial

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Date

2019

Authors

Friebel, Guido

Heinz, Matthias

Hoffman, Mitchell

Zubanov, Nick

Series

NBER Working Paper; 25920

Publication type

Working Paper/Technical Report

Publication status

Published

Abstract

Employee referral programs (ERPs) are randomly introduced in a grocery chain. Larger referral bonuses increase referrals and decrease referral quality, though the increase in referrals from having an ERP is modest. However, the overall effect of having an ERP is substantial, reducing attrition by roughly 15% and decreasing firm labor costs by up to almost 3%. This occurs, partly, because referrals stay longer than nonreferrals, but, mainly, because all workers stay longer in treated than control stores, even among stores where no referrals are made. The most-supported mechanism for these indirect effects is that workers value being involved in hiring.

Subject (DDC)

330 Economics

Cite This

ISO 690

FRIEBEL, Guido, Matthias HEINZ, Mitchell HOFFMAN, Nick ZUBANOV, 2019. What Do Employee Referral Programs Do? : A Firm-level Randomized Controlled Trial. Available under: doi: 10.3386/w25920

BibTex

@techreport{Friebel2019Emplo-50290,
  year={2019},
  doi={10.3386/w25920},
  series={NBER Working Paper},
  title={What Do Employee Referral Programs Do? : A Firm-level Randomized Controlled Trial},
  number={25920},
  author={Friebel, Guido and Heinz, Matthias and Hoffman, Mitchell and Zubanov, Nick}
}

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Bibliography of Konstanz

Yes