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How to Create a Successful Employee Referral Program

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An employee referral program can be an exceptional recruiting tool if done well. If the new hire feels loyalty towards the employee who referred them, they are more likely to stay longer. Once they get past the first 30-60 days, they become more engaged. This gives them time to adjust to the job and the company.

Here are some ideas about how to make your employee referral program effective:

Ensure Your Current Employees are Engaged

If you don’t have engaged employees or if they don’t like working there, they will not refer anyone. Ensure you have a strong leadership team, a good working environment, and you listen to your employee’s concerns. If you have a lot of turnover, it is important to find out why. Many bad bosses and even business owners blame the employees. But if you don’t fix the situation in your company, it will be hard to find loyal or engaged employees. 

Explain the Job Requirements 

Ensure your employees know exactly what you are looking for in the new job. Send them a link for their friend or acquaintance to apply online. Make sure your application process has a place to put their friend’s name or make a special link for referred job applicants. 

Many Applicant Tracking Systems (ATS) have referral links or can integrate with dedicated referral software services or offer their own referral tools.

Your job description should be very clear and ensure all referrers know that you only hire people that fit the job skills. A good job description sets clear expectations and it also shows your company culture. 

You should be very clear that you will only interview those that meet the qualifications. Remind employees that not every friend or acquaintance makes a good employee for the company. 

Give an Overview of Your Company Culture

Give a brief overview of the company and the characteristics you seek in an employee and team member in your job advertisement. Your applicants should understand and know more about your company culture. If you have company values, you should list them on the application process. 

Also, If you have a workplace video, you should ask the applicant to watch it. Give a brief overview of your company and as much information as you can. Hiring for cultural fit helps you find employees that will stay in your company longer.  

When interviewing, ask questions to find out if they know anything about the company. If you provided information about your business and culture in the application process, they should be able to tell you about some of it in their responses. If they can talk to you about your business culture, then they are the ones you probably want to work there. 


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Communicate Throughout the Process

When you have a referral program, you should communicate with both the applicant and the referrer. It is important to let them know what is going on so they will continue to refer others to the company. If you don’t communicate, you could risk your referrers not helping you out again. 

If someone is not selected for the job or even an interview, send the referrer a thank you card. You may want to even give a small gift (e.g. candy) for referring someone. You want them to know you truly appreciate their help. 

If someone constantly refers all their friends and family that doesn’t meet the qualifications, don’t complain about them. Bring them in and talk to them about what you are looking for. They may need a deeper understanding about how you hire to fit the job, the company, and the culture. You may even find you don’t have clear job descriptions. 

Reward Your Referrers

Find rewards that are meaningful to your employees. Some companies give cash bonuses, but some employees would prefer days off or a mini vacation. Once you determine your budget, conduct a survey to learn what they prefer. 

Also, you could change it periodically. When you send out a notification for your next new hires, you could change the rewards each time. Sometimes it may be money, sometimes it could be a day off. You could even give a choice of rewards. Just remember, not everyone is motivated by money. 

Whatever you decide, make the rewards good. 

For those that refer often, ensure everyone knows it and make a list of star referrers to recognize. 

Train Everyone on the New Employee Referral Program

When you are ready to start your new employee referral program, you should train everyone on your new process. This helps ensure everyone knows exactly what you are looking for. Go over your concerns as well. Let them know you don’t want just applicants, but you want people who fit the job. They should know you want those that fit the skills of the jobs posted and people who fit with the company culture. 

Also, explain some methods so they could help recruit as well. For example, if they have people they are linked with on LinkedIn, they can send them the job link as well. Teach them or give them wording to reach out to those that may fit your jobs. 

Make the Referral Process Easy

Don’t make the process too complicated. Your employees have a job to do so they want the process to be easy. Also, whenever you have a new position opening, you should send out an email to all employees with the link of the job and a reminder about the referral process. 

Furthermore, don’t make the referrers wait too long to get their rewards. If someone is hired, consider rewarding them for different steps. For example, if the new employee stays 30 days, the referrer gets $100. If the new employee stays 90 days, they get a mini vacation or $500. Whatever you decide, don’t make someone wait more than 90 days to get their reward.  

Best Practices

Research best practices that fit your business. Research what others do in your community as well. Experiment with different methods and see what works best for your small business. You don’t have to do what the big companies do, but you can get some new ideas from reading what they do.

  • Salesforce hosts recruitment happy hours where the team members can invite the friends they want to refer. 
  • Accenture allows employees to donate a part of their referral bonus to a charity of their choice and Accenture matches that amount. They also make it easy for candidates to initiate referrals by adding a “Get Referred” button in their job postings.
  • Google recruiters sit down with their employees and help them research their social profiles to find matches. They also ask pointed questions such as “Who is the best product person you know?”
  • Intel recently announced that it will double its referral bonus when the company hires women and minorities through referrals.

Final Thoughts 

Starting and implementing an employee referral program should be considered an important event. This should be marketed just like any new program or event you market to your employees. Make changes once you implement it if something doesn’t work. Also, let your employees know that this is something that is important to you and the company.

If your employees are not referring anyone, then you should find out why. You may have a problem if they aren’t telling you or they say they do not know anyone. If someone likes their job and their company, they will refer others. 

Ensure your budget includes referral recruiting. You can save a lot of time and money when your employees refer people. Give them the VIP treatment and let them know that you value their suggestions. Not only do you get good employees from hiring, but you make your current employees feel valued. 



Author: Kimberley Kay Travis

Kim Travis has over 20 years of experience in business, human resource management, and leadership roles. She has specialized knowledge in employment law, employee relations, recruiting, management consulting, small business growth, leadership development, workplace safety and health programs, and writing business content.


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