Employee Referral Program

What is an Employee Referral Program?

An employee referral program is when an existing employee recommends a candidate to their organization. It fastracks the hiring process as the resumes reach the hiring team through the existing employees.

Once the application is received, HRs determine the right fit for the organization. They review the resume and backgrounds to find the best talent pool with the employee referral program.

Organizations can create an effective employee referral program by engaging employees and motivating them to recommend the best talents from their social connections. Many companies offer incredible employee referral bonuses, including giants like Uber, Dropbox, and Airbnb. Some top referral programs by big companies include Salesforce beer parties and Fiverr referral gamification. Using direct, email, and incentive-based referrals, companies increase their headcounts. Some companies also use referral software such as Influitive and Tremendous to make referrals more effective.

employee referral program

How Does a Referral Work?

An employee referral program brings the organization closer to finding the best hires. Instead of posting about open roles on job boards, the company asks its employees to recommend candidates. If the recommendation fits the organizational requirements, the company rewards its employees for their help. They often provide employee job referral bonuses if the candidate completes the probation period. However, every organization has different employee referral policies. The job referral program improves the quality of job applications.

How to Setup a Referral Program?

steps to set up an employee referral program

Building an impactful employee referral program is critical for hiring as it helps attract the best candidate pool. However, developing a job referral program needs a well-developed strategy. HR managers can set up a referral program by following the steps mentioned below.

  • Decide when the referrals are needed: Choosing when to ask for referrals is essential. Many companies start with a traditional hiring approach and then look for employee referrals at the end of the hiring cycle. If the organization is looking to hire employees without wasting much time, they should look for referrals right away.
  • Engage employees: The success of a referral program depends on how engaged the employees are in the program. If the employees are unaware of the processes, like how to refer someone, they might not provide hire-worthy recommendations. Therefore, the HR department should communicate its requirements to the employees.
  • Give rewards: Providing referral incentives to employees keeps them motivated, and they recommend better candidates for the open roles. However, ensuring that every employee understands the terms and conditions of the program is critical. The HR department can send email notifications containing the details of employee referral programs.
  • Track referrals: HR managers need to evaluate a few metrics to know if the referral program has worked. These metrics include knowing the number of referrals per role per department and tracking the number of candidates hired through the referrals.

Employee Referral Program Best Practices

“In a typical company, referrals account for 24-50% of the total hires.”

This fact clearly emphasizes the importance of employee referral programs. Here are the top practices to be followed when implementing and running an employee referral program.

  • Create a positive outlook for the employee referral program: The HR department should market their employee referral campaigns to reap the most benefit. They should come up with a catchy campaign name and logo to attract attention. Moreover, they can use targeted messages to get recommendations from employees who are likely to have connections that can fill the open positions.
  • Work on improving the employee experience: Organizations can enhance employee participation by motivating them to refer talented candidates. They can encourage employees to dig up their social connections. Moreover, organizations should optimize the program so that recommending a candidate becomes a matter of a few clicks.
  • Optimize the candidate experience: Companies should focus on offering the best experience to the interviewees. Providing a positive candidate experience can help them build their name as a trusted employment brand. One way to improve the candidate experience is by reaching out to them after the interview.

Companies With the Best Employee Referral Programs

1. Google Referrals

Google follows a team referral program to increase its headcount and attract industry veterans. It believes in hiring a candidate for the entire organization instead of hiring for specific job titles. Therefore, candidates are referred to the entire organization instead of specific job IDs. Upon selection, they can choose the project they want to work on based on their interest. By following this approach of employee referral, Google has increased the volume of employee referrals by 33%.

2. Salesforce Referrals

Salesforce runs a referral program called the “Salesforce Referral Program.” The company offers monetary and other rewards to employees in case of successful hires. Also, the company organizes a party where current employees invite the people they want to refer. This get-together helps the recruiters know their potential hires.

3. Accenture Referrals

Employees at Accenture refer a candidate to the organization through a separate portal. The company offers referral bonuses to its employees upon selection of a candidate. This amount depends on the employment levels and skill sets of the newly recruited candidate. The company pays the referral bonus within a quarter from the date of joining of the employee. Besides the bonus, existing employees also receive prizes such as TV, bags, running shoes, gym bags, and watches.

4. Intel Referrals

Intel launched a diversity referral program to include a diverse workforce in the company. They doubled their referral bonus to reach the diversity goals and include women and minorities in their workforce. As a result, 41% of hires came from underrepresented groups.


Frequently Asked Question (FAQs)

1. Can Employees Use Referral Software?

Yes, employees can use referral software to recommend the best candidates to their organization. The employee referral software comes with features like status tracking, easy referrals, and resume uploading.

2. Does Employee Referral Help Organizations?

Yes, employee referrals are one of the best ways to speed up hiring. It also helps organizations hire the best talents. Moreover, it has been noted that referral candidates accept 15% more offers than regular candidates.

3. Do Referral Programs Work?

Yes, referral programs can be highly effective in attracting the best talents for a business. When implemented well, referral programs can reduce hiring costs & time and improve employee experience.

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