How to Create an Employee Referral Program That Works

Jul 1, 2020 | Company Culture, HR Resources | 0 comments

An employee referral program is a fantastic way of getting leads for new hires. It’s a highly productive recruitment strategy that can help you get better candidates and widen your talent pool. 


What Is an Employee Referral Program? 

An employee referral program is set up by companies to find candidates for open positions. It leverages the connections of your current employees, letting them recommend candidates to you. This is a recruitment strategy used in countless organizations because it really works! 


Benefits of Employee Referral Programs 

Finding fantastic talent is always a challenge when you have a position open. Setting up an employee referral program can help you to find high-quality candidates

Talent Acquisition 

Your current staff understand what it takes to flourish at your company. That may be part of the reason that the people they refer are often higher-quality candidates. Your current staff also likely understand the role and company culture better than most people. This makes them ideally placed to know who would be a good fit. Maybe that’s why employee referrals are often better candidates than those coming in through job boards. 

Lower Costs

Applicant tracking systems, job ads, and finding qualified candidates through traditional means are extremely expensive. The great thing about employee referral programs is that they are very low cost. You may not have to spend as much on job ads for your open positions if you have great referrals coming in. The hiring process is often also quicker, taking up less of your time. 

Improve Retention 

Referred employees often stay longer in their roles. They are more likely to be a better fit for the role due to the inside knowledge of the person referring them. They usually also feel a duty to the person who referred them to stay and this increases employee engagement. This is fantastic for your retention rates and therefore, your company! 


How to Create an Employee Referral Program


The first step is to start planning how you’re going to set up your employee referral program. Who will set it up and maintain it? You also need to set goals for the program as this will be critical to your success. These could include: 

  • Increase in referrals by x%
  • Reduction in turnover rate by x%
  • Reduction in hiring process time by x%
  • Increase in high quality applicants by x%


Now you need to start designing the program. Decide how you’re going to get your staff referring candidates. It’s a great idea to set up a system for your employees to easily share roles on their social media accounts. Make it is easy as possible for people to refer others, otherwise they are unlikely to do it. That’s why social media is a great choice, such as sharing roles on their LinkedIn profiles. 

You will also need to develop a policy to detail the rules around the program. This should include how the program operates and what happens when someone makes a successful referral. 

Consider offering a referral bonus. 70% of companies offer a cash bonus to employees who have referred a new hire. Other companies provide rewards in the form of extra vacation days or days off.


For the referral program to work, your staff need to know about it! Create a promotional plan for it so that you know that everyone who works in the business will hear about it. This might include:

a) Launch Party 

Having a launch for it can be an excellent idea as everyone will have to show up to this. You could do a presentation to introduce the concept to the employees at your company. Remember that they don’t need to know all the detail behind it, just what they should do and what they can get. 

b) Newsletter 

If you have a company newsletter or bulletin board, put information about the program on there. This will remind people after the launch party about the program. 

c) Email Marketing 

When it comes to the referrals, your staff need to be up to date on the open roles in the company. Perhaps you could send a fortnightly email to everyone detailing which new roles you’re advertising for. Otherwise, people will forget to look. 

Analyse and Improve

This step won’t be done right away, but once you’ve run the program for a few months, take a look at how it’s going. You can do this by seeing how you’re measuring up against the goals you set for yourself in step . You likely won’t have reached them yet, but you need to check that you’re going in the right direction. 

If you aren’t improving on your goals, then it may be time to consider some changes. Can you offer new rewards, or promote it in a different way? Get creative and think about what your employees would enjoy. Perhaps everyone gets a free lunch when you get to a certain number of successful referrals. Or maybe you can offer everyone free coffee at a meeting outlining the new roles you have coming up that you need referrals for. Coffee and food are a good way to make sure that people turn up. 

If you want better job candidates, it’s time to start planning an employee referral program. Improve retention, lower your hiring costs, and speed up the hiring process. You’ve got nothing to lose and everything to gain! 

Do you wonder what hiring would be like if your team had hiring superpowers?
Find out for yourself with Bryq's free 14-day trial!