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Run An Effective Employee Referral Program

If your goal is to get great people into your organization (and it is), then one of the best resources at your disposal is your existing employees. They know your company already; they understand the brand and what you do. And they know it’s in their own best interests to be surrounded by high-quality people. So it’s time to take advantage of that pre-existing network and create an employee referral program that helps bring in great talent.

How to run an effective referral program

Make an announcement

If your employee referral program details are buried on page 6 of the employee manual, you probably won’t get much traffic. So it’s important to make sure you make periodic announcements—when you’re kicking off, when there are changes, or simple reminders—to let everyone know that there are incentives for referring potential new employees.

Your announcements should have all pertinent details for employees:

  • How to refer a candidate
  • What incentives they’ll get if the person is hired
  • What rules there are (when incentives are awarded, any other limitations, etc.)
  • What information you want the referrer to include in their recommendation (particular skills that could help the company, how the person would fit in the company culture, etc.)
  • Ready-made social media links or talking points that employees can use on their own social media accounts

You want the referral process to be as enticing as possible for your employees. If the process seems complicated or vague, people might not bother to take advantage of the program, even with incentives.

Make it worth their while

A cash bonus is always a popular motivator, but if you’re looking for creative or supplemental incentives to offer employees for referrals, consider the following:

  • Raffle entries for a larger prize
  • Gift cards
  • Team perks like team happy hours or pizza parties
  • Extra vacation days
  • Lunch or dinner out for the referring employee and the new hire
  • Tickets to local events like classes, concerts, or food festivals
  • Charity donations in the referring employee’s name
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More thoughtful rewards like these can be popular, and usually have the added effect of upping morale. Things that make the work day or week better also have the added benefit of making your organization even more appealing for referral.

And if you don’t know what kinds of incentives would be popular with your employees, ask them! A quick online survey can show you what incentives employees would like as a reward for bringing in quality hires.

Make your policy clear

Your referral program should be clearly outlined in any employee-facing materials, whether that’s a company intranet site or an employee manual. A strong policy statement includes:

  • An overview of rewards and incentives that employees would receive. Also include a list of the criteria that needs to be met. (For example, how long the new employee needs to stay at the company before the referring employee can collect the bonus.)
  • A detailed process for how employees should submit any referrals. If your organization has an applicant tracking system, make the steps for using it clear to employees, using screenshots if possible.
    If employees should use email to refer new employees, indicate what should be included (like a resume, social media links, a description of skills, etc.). And better still, include a template that employees can use, plugging in information as necessary.
  • The fine print. This includes any legal language about whether the referred candidate has a non-solicitation clause with their current employer, what would invalidate a referring employee’s bonus, and how much the referring employee is allowed to be involved in the recruiting or hiring process.

The best bedrock for any employee referral program is a clear, easy-to-follow process. The more your employees know about what they need to do and what they’ll receive in return, the more likely it is that they’ll make the effort to recommend qualified people to join them at your company.

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Kate Lopaze

Kate Lopaze is a writer, editor, and digital publishing professional based in New York City. A graduate of the University of Connecticut and Emerson College with degrees in English and publishing, she is passionate about books, baseball, and pop culture (though not necessarily in that order), and lives in Brooklyn with her dog.

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