SALDRU Research Finds that Reference Letters Improve Employers’ Responses to Job Applicants

Faced with a lack of information on the skills of job seekers, employers in South Africa often rely on informal referrals to fill vacancies. This includes receiving referrals from existing staff, which can lead to mismatched placements, as current employees may refer friends or family members rather than their most qualified peers. The exclusion of less connected groups in society, such as women, is also worsened through this practise.

In cooperation with the Department of Labour and the support of J-PAL Africa, researchers conducted an experiment through which they encouraged the use of standardized reference letters from previous employers and investigated their usage and value in the application process. Results indicate that reference letters are valuable to both job seekers and hiring firms.

The study found that for job seekers, including a letter with an application increases the probability of getting a response from firms by 61%. Attaching a reference letter to a job application is particularly important for women where an 89% improvement in response was observed.

On the firm side, reference letters help to select candidates whose abilities fit with the needs of the job. Despite this, reference letters are not widely adopted, partly because job seekers underestimate their potential value.

Read the latest SALDRU Working Paper The Value of Reference Letters by Martin Abel, Rulof Burger & Patrizio Piraino.