How to Design an Employee Referral Program to Hire Top Talent

Building a talented team is a never-ending process.

Qualified candidates can be hard to come by in today’s market. Fortunately for hiring managers, there is a simple recruitment process to improve the quality and quantity of candidates: Turn all of your employees into your very own recruiting army.

Your employees are gold. They’re bright, exceptional people. They know your business inside out. That's why referrals are a tried-and-true recruiting strategy.

While all companies find and source candidates in their own unique ways, referrals can help, and they make the most impact on employee retention. Using employee referral software to make an employee referral program is an important part of your recruiting program. It can be your secret sauce when recruiting talent for your business.

Establishing a referral program can also help hiring managers source, screen, and score talent much faster and with long-term placement success. The best programs are the ones that incentivize their employees and offer recognition, and not to mention, are low-effort on your employees' part.

Employee referral recruiting strategies

Whatever your approach to recruiting, it’s hard to deny that referrals are a great source of hire. If you’re wondering how to integrate an employee referral program into your hiring process, here are 11 ideas to try.

1. Make a “sourcing jam” part of your onboarding process

There’s magic in the air during a new hire’s first few weeks on the job. Capitalize on their excitement and eagerness. Put time on the calendars during the onboarding experience of your new hires within the first 30 days to talk to them about who they know would be a good fit for the company.

This is the prime time to win the hearts of your new employees. They’re excited about the role and company, and it’s on their brain.

2. Host monthly or quarterly recruitment happy hours or events

This is a great informal way for employees to invite people they want to refer to get acquainted with potential candidates in a low-key, no-pressure setting.

For a human touch, highlight recent placements and share the details of how an employee was referred, their journey to getting hired, and their contributions to the team.

3. Localize your incentives

For multi-city or global companies, tap into local knowledge and build employee referral programs to motivate your employees on that level.

Is there a particular business or product only available in Chicago? Do your employees value working with local businesses? What is meaningful to people in one market may not have the same impact in other areas.

4. Utilize gamification

Add a competition element by giving employees points through gamification for all actions they take, and notify them about status changes of their referrals.

5. Make a charitable donation

Making referrals makes employees feel good. Maximize those “feel good” feelings by allowing employees to donate a part of their referral bonus to a charity of their choice, and match the amount.

6. Give on-the-spot bonuses or swag

One reason employees don’t refer more candidates is that they don’t know what jobs are open within the company. Include HR in monthly meetings and educate employees on any high-quality roles open.

To encourage your employees to make referrals, give out on-the-spot cash, an extra day off with pay, a free lunch, or fun SWAG like shirts or Stanley water bottles.

7. Turn to social media

Help your people make referrals and keep things simple by creating recruitment-based content on social media. Send an internal email with your top jobs every week. Include social media copy your employees can paste to their LinkedIn, Facebook, or Twitter profiles and share with their followers for open jobs.

8. Build a culture around referrals

Create a dedicated page/section on your website to share employee testimonials and their experiences. Consider doing this either through text or videos.

9. Encourage transparency

Develop a simple system for tracking who referred whom, the date of hire, when a bonus will be paid out, etc. The easier the system, the more likely an employee will be interested in referring other candidates.

10. Offer public recognition

Organize company events to honor and publicly recognize employees who refer qualified candidates. Refer to employees as champions and celebrate their success for greater engagement.

11. Utilize software

No matter the size of your organization, making the most of employee referral software is in your best interest. These tools not only provide a platform to manage all employee referrals, but they can also give employees tools for job sharing while tracking and managing bonus payouts.

Whether employees are looking to refer friends, leverage their networks, or participate in company-wide hiring campaigns, employee referral software streamlines the entire process, all while increasing employee engagement by incentivizing employees to become brand ambassadors.

Dos and don'ts of employee referral programs

Creating an employee referral program can be tricky, especially when starting from scratch. As you build your program, keep these dos and don'ts in mind!

Dos:

• Offer feedback to the employee who referred the candidate. It's important to keep the employee in the loop about what's happening, so they know where the candidate is in the interviewing process. Hiring managers don't have to share every detail, just a quick overview and whether or not you'll be moving forward with the application.
• Have the interviewer mention the employee during the interview. In the first screening of the candidate, mention the team member the candidate has been referred by and see what they were told about the organization. Referrals should have more knowledge about the company than ordinary candidates.
• Consistently promote the referral program to employees. Once the program is established, make sure employees know about it! If you're not promoting it internally, you're likely missing out on talent opportunities. Make announcements in company meetings and send emails periodically as reminders.
• Get in touch with every person referred. It's not just the company's reputation you must consider but also the reputation of the employee who made the referral. They put in the time and effort to refer someone they believe is a good fit for an open role. And even if it doesn't work out with this candidate, you want to encourage them to make more referrals in the future.
• Make it easy for employees to refer candidates. Whatever software your team chooses to implement should make it simple for team members to refer others for an open role. Don't make your employees jump through hoops throughout the process.
• Allow employees to trace the path of their referrals. Similarly, ensure the software in use has features to allow employees to keep up with where the candidate is in the interview process. If the next step is a video interview, the tool should say. The same for if the candidate has been rejected. Consider a tool that offers email notifications, so employees don't have to log into the tool daily for an update.

Don'ts:

• Interview every single candidate that gets sent your way. Just because an employee referred a candidate, doesn't mean your recruiter or hiring manager owes them an interview. If the candidate doesn't have any relevant experience, send them an email stating why they are not suitable and share what types of roles they should consider in the future. Then, explain to the referrer why you’re not progressing with the candidate.
• Forget about other candidates. While your hiring managers and recruiters have referrals to make contact with, they shouldn't forget about the other candidates who have sent in resumes for an open position. The perfect person for the role may have already applied!

5 examples of employee job referral programs

Many different types of companies boost great job referral programs. Here are five of the best examples.

1. G2

Referrals are a reliable source of talent at G2, and employees are encouraged to submit referrals through a company portal. G2 offers three bonus levels, depending on the role hired for, paid out once the referred employee reaches 90 days within the organization. 

2. Salesforce 

A strong employee referral program is the secret to Salesforce’s recruitment strategy. Between offering employees VIP treatment, hosting employee referral happy hours, and contests and spiffs, Salesforce offers a well-rounded and incentivized program to help the brand build bigger, better teams faster.

3. Fiverr

Take a page out of Fiverr’s hiring strategy and level up your recruiting efforts by adding some gamification tactics. Fiverr not only grew its employee size, but increased its brand exposure on social media by tracking social job sharing and offering points for sharing jobs and referring friends.

4. Buffer 

Known for its transparency, company culture, values, and open communication, Buffer carries this into its recruitment strategy. The business offers a detailed look at what life is like working at Buffer with a robust portal filled with employee stories and testimonials.

5. PURE 

This insurance group looks to get employee referrals immediately – almost from the moment a new person is hired. Within the first month of being hired, a recruiter will ask the new employee if they know someone who would be a good fit for the company. The company actually sources 40-to-60% of talent with this tactic.

You never know who you'll hire

Building an effective employee referral program will be different for every business.

Consider testing different incentives and structures to find what works for your organization. Remember, you don’t need a huge budget to create a program centered on the needs and motivations of your employees.

In addition to a referral bonus, learn more about the other types of employee bonuses your company can offer.

This article was originally published in 2019. The content has been updated with new information.