Every second a job is vacant, your business loses productivity, time, and money.

But finding top talent notoriously difficult, especially when your company has high standards (which it should). That’s why many companies are turning to employee referral programs, or ERPs. Though many companies feel wary about their employees recommending friends or family to hire, it’s one of the best ways businesses can build a high quality candidate pipeline.

Ready to create an employee referral program that actually fills jobs? Let’s dive in.

Before You Build

The foundation for a successful referral program is a great company culture. You need a positive work environment and engaging brand, or no amount of effort will move your workforce to encourage others to join your team. Without employee support, referral programs will crumble.

Imagine you’re considering a new restaurant for dinner. What do you do? You ask your friends what they think of it, or read reviews online. If the trusted foodie in your life doesn’t like the place, they aren’t going to recommend it.

Now think of your workforce the same way — they hold the recommendations for your business. If you’re top performing employees aren’t willing to tell their friends, family, or past colleagues about your vacancies, then your program is doomed from the start.

To ensure your company is worth recommending, you first have to follow HR best practices. This includes taking a modern approach to performance management and focusing on long term engagement.

Constructing the Framework

Once you have an engaged and motivated workforce, it’s time to create a documented employee referral process, which outlines procedures and sets expectations. You’ll need to figure out:

  • How will employees make a referral?
  • To whom will referrals be made?
  • How will employees know what jobs are open?
  • Will referrals be evaluated differently?
  • How will employees know if their referral is hired?

Remember to keep the process simple. Too many rules or unnecessary complexity will discourage participation. Once you’ve created a process, you’ll need to reinforce the framework with technology. Paper-based referral submissions are out of date. Take some time to compare HR software, and choose a system with a career website that automates the employee referral and application process.

Employee Referral Program Must-Haves

The primary motivation for your ERP should be the desire to fill your company with the best players. Employees have a chance to help pick their teammates and build a better organization. But sometimes they’ll need an extra nudge. To build a truly effective program, consider the following elements.


A CareerBuilder survey found that 48 percent of employees said cash bonuses would further motivate them to participate in a company’s referral program. But a cash reward for a successful hire is just one way to motivate. Other incentives include charitable donations, vacation time, or a gift card for “first time” referrals.


To keep your ERP engaging, hold a contest to see which team can drive the most referral hires in a quarter. Some friendly competition can motivate managers and employees to adopt a “for the team” perspective.


Be mindful of your employee’s time, as well as their referrals. Keep everyone updated on the application status and provide timely feedback. Lack of responsiveness can kill your ERP.


Be sure to provide periodic updates after a referral is made to notify employees if their referral is accepted, interviewing, hired, or rejected. It’s also crucial to provide feedback on weak referrals, or even top referrals that didn’t get hired. Let employees know how they can improve their own screening process and what applicants can do to improve their chances.


Are you job descriptions clear enough? Instead of just asking, ““Do you know anyone we should hire?” consider more specific questions, such as “Who is the best finance person you ever worked with?” or “Who is the best Ruby developer you’ve met?” This strategy helped Google increase their employee referrals by more than a third.

Outside Referrals

You can widen your referral reach by including non-employees in your program. A Smashfly survey revealed that teams who expand their ERP to corporate alumni, retirees, vendors, contractors, spouses, strategic partners, and even customers get 28 percent more hires from referrals and 8 percent higher quality referral candidates. Extending who can refer candidates into the organization can increase the volume of leads without decreasing quality.

Reference Referrals

Who were your top hires last year? Reach out to their references to thank them for their help and ask them if there are any additional qualified candidates they’d like to recommend.

Prioritized Openings

Be clear about the high-impact and hard-to-fill jobs that are open. Direct everyone’s referral efforts towards those, rather than positions that can be filled easily.

Your workforce puts the seal of approval on your company. If they don’t know – or care – about who you’re looking for, they won’t help you fill vacancies. An employee referral program turns your employees into brand evangelists and enables you to source candidates from within. The lifeblood of your company is one of your best recruiting tools, so don’t waste another second trying to grow your business without them.


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