Employee Referrals

Glossary > Employee Referrals

What is an Employee Referral?

Your best sources for top talent are your existing employees. When you have an open position, it’s a great idea to ask employees to share with their network. Their warm referral to your company and recommendation of candidates can bring in another loyal, hardworking employee. Employee referrals are a great way to keep your talent diverse and bring in fresh ideas to your organization.

Why are Employee Referrals Helpful?

Warm referrals from employees help bring in qualified candidates for open roles. When an employee refers a colleague for a position, they have already been pre-screened by your employee. It can cut down on time spent screening candidates as a fit for your company. Utilizing employee networks for candidates can also improve diversity.

What is an Employee Referral Program?

While it’s a nice perk to have your employees refer people to open positions, you should make it worth their while to keep the referrals coming. Incentivizing employees to provide referrals will keep your talent pool fresh as well as motivate referrals in the long term. An employee referral program offers perks to employees for referral hires. It usually offers some sort of payment bonus for a successful onboarding from a referral – for example, a referral hire makes it past 90 days. Create a program that aligns with your hiring goals and offers benefits to employees for their help. Below are some ideas for referral incentives: 

  • Cash bonus for six months of a successful referral hire
  • Partial bonus for new hire referral and partial bonus after six months
  • Give employees option of cash bonus or some PTO for a successful hire

How Do I Create an Employee Referral Program?

The key to a successful referral program is continuous improvement. Utilize your recruiting team if you are building a program from scratch. If you’re not sure where to start, try some of these steps!

  • Identify hiring goals for your company and how a referral program would fit in.
  • Check your TA suite for its referral capabilities.
  • Gather opinions and ideas from employees on the types of incentives that they would appreciate.
  • Communicate with your company about the new referral program – have a roll out meeting to explain it and answer questions.

Be sure to ask for input and feedback from employees and leadership. Analyze how your program is working towards your hiring goals and make changes as needed.

What Counts as an Employee Referral?

Any referral of a candidate by an existing employee is an employee referral. Whether or not a candidate is hired, a referral is still a beneficial addition to your talent network. Referrals are a great way to expand your talent pool – keep these leads warm for the next fitting job opening.

More on Employee Referrals

Looking to learn more about the benefits of employee referrals? Read about employee referral programs below and keep up to date on the latest in HR Tech in the Jobvite blog and resource library!