Talent Management

5 Essential Tips for Creating an Awesome Employee Referral Program

Published by in Talent Management

I love my job. (And I’m not just saying that because I’m at work.)

I got my job fresh out of college, because a professor introduced me to a former student of her’s, who worked for a company that was hiring. A large part of why I have my job now is because of that former student, so thanks Rachel Burger for the recommendation!

Employee referral program

Internal recruitment works, and since I’m happily employed a full year later, I think I’m proof enough. but just in case you want more than that (fair!), there’s been plenty of research that says the same thing.

Referred employees perform better than their not-referred counterparts, and stay at the company longer. They’re also faster and less expensive to hire and onboard.

Nearly two thirds of employers have a referral program in place, which makes me wonder what the heck that last third is thinking? If you’re interested in setting up or improving an existing employee referral program at your office, here are five can’t-miss tips to help.

1. Incentivize your current employees

You set up this shiny new employee referral program, and now everything would be perfect if you could get your employees to actually use it.

Referring a friend to a company can feel like a risk for your employees.

Why would your employees feel that way? Some of their anxieties might include:

  • What if my friend is wildly under qualified?
  • What if their resume or cover letter is embarrassing?
  • What if they are rude in the interview?
  • What if my referral outperforms me?
  • If referrals don’t factor into my performance review, why should I bother?
  • I don’t care about my company very much, why would I help them out?
  • My job is too embarrassing to show a respected former colleague!

This hesitation could cost you some excellent job candidates!

Avoid that by incentivizing a referral program for your employees whose referrals make the cut. For example, you could…

  • Offer monetary bonuses
  • Tie successful referrals to performance
  • Always accept referrals to the first round of interviews
  • Make sure managers and supervisors know which employee referred a great new hire
  • Make sure that upper management knows which employee referred a great new hire
  • Accept referrals year-round, not just when you’re openly hiring
  • Offer awards and recognition to top referrers at company gatherings and celebrations

If you’re still struggling with finding actionable incentives that work for your company, check out our list of 40 employee appreciation tips. Whatever you do, show gratitude for the hard work your staff put into digging up the perfect candidate.

2. Find ways for technology to streamline your referral program

If you’re trying to start a new referral system, you’ll quickly discover how difficult managing the process can be.

Are you trying to get through the “old fashioned way?” Telltale signs of the old fashioned way include desk covered in post-it note reminders with vague names scribbled on them (What does that say again? Emily? Emilie? Emile?), backlogged email chains that force you to scroll back through 20 follow up requests to find any useful information, appalling sloppy spreadsheets, and a blinking voicemail light reminding you of an inbox full of unhappy employees and forgotten candidates desperately attempting to follow up.

The old fashioned way is not going to get anything done.

Emails get lost, post-it notes get covered with desk clutter. And referrals get forgotten. Worst of all, your hiring managers might get blindsided in the interview when the candidate mentions their inside contact, leaving your employees scrambling to make the connection and see what other additional info they might have missed about this person. What else got eaten in a chain of 52 emails or disappeared in a messy spreadsheet? (Wait is this that Emilie?)

You can avoid all these problems. Use an applicant tracking system with a referral portal. An ATS of this breed will make your life so much easier than the post-it notes, in several ways:

  • Everything gets centralized in one easy place
  • Referrals get separated from regular candidates, so the hiring manager knows that they’re different
  • Employees can write insights or notes about the referrals, so HR doesn’t have to chase them down
  • It makes referring potential hires easier for your employees
  • If something does go wrong and you’re caught unawares in an interview, a few clicks will pull up a file with everything you need to know

A referral portal or section will help you keep on top of referred employees through every part of the hiring process. Some programs that include this feature are BreezyHR, JobScore, and WorkTap.

3. Expect more, and know how to ask for it

Just because your referral candidates know a guy, that candidate isn’t instantly off the hook for the knowledge you should expect from anyone applying for a job with your company.

A candidate who cares and truly wants the position is a candidate who will do their homework and make an effort to educate themselves about the organization, company culture, and the nature of the work itself.

Name-dropping is not a replacement for this research. Someone who knows a person already working for your company should know more about the job than the average candidate, not less.

Push the referral candidate to find out what they really know about the job. They should know at least as much as anyone could find with a quick Google search, and will hopefully have heard more about the culture from their friend than “Well I heard the coffee is good.” Some questions you might consider asking a referral include:

  • What makes us stand out from our competitors?
  • What are your expectations about working for us?
  • Do you have any negative impressions of our company?
  • What specific aspects of our company’s values appeal to you?

4. Contact every single referee… even if you reject them

Candidate experience is everything.

Having a positive candidate experience can make even people who don’t get the job speak highly of your company, and can make true believers out of those who do come to work for you. Even rejected applicants can become brand advocates if they enjoyed your hiring process.

Unfortunately, candidate experience isn’t always positive.

In our plugged-in, over-sharing internet age, a job applicant who had a rotten time with a particular company will tell their Facebook friends, their Twitter followers, and your Glassdoor page.

When a job applicant comes from an employee referral, their experience is doubly important. They know someone on the inside, someone who will likely hear about it if they have a terrible time applying to work alongside them, which can impact their job satisfaction as well.

Candidates far prefer it when they feel like someone in the hiring process is actually paying attention to them, even when the news they receive isn’t all good. With that in mind, every single referred candidate should get an email or call notifying them if they got the job or not.

But communication doesn’t begin and end at acceptance and rejection. That should be the last (or, in the case of acceptance, most recent) contact in a long chain of ongoing, open discussion and information. As soon as you receive a referred application, you should be reaching out and referencing the employee who referred them. Ask them about why they were referred; did the employee reach out or did they reach out to the employee? They’ll appreciate the opportunity to tell their story.

5. Actively match post-hire mentorships

Mentorships are fantastic ways to give new employees a head start. At their core, mentorships are personalized, ongoing onboarding, with a solid level of professional development thrown in for an extra punch of usefulness. You can set up a mentorship system or improve one with 4 Programs To Help Workplace Mentoring Go Smoothly.

If your new employee was a referral, you have a head-start on matching them with a mentor that they already know. Skipping the awkward “getting to know you” phase will only be a boon to anyone looking to hit the ground running in their new career.

You might be concerned that this won’t work in your workplace. And that’s fair! You want to do all you can to avoid cliquishness and segmentation between different groups in the office. But if your employee sent in a referral, odds are they’ll prefer to hang out with one another to one extent or another anyway. All the better to use that to your company’s advantage so you can maximize both employees’ skills.

Think critically about the new hire and who recommended them. Was the person who referred them a former mentor or professional contact who’s had far more time in the industry than your new hire? Or is this a case of a friend, roommate’s friend, sibling’s friend, or someone otherwise in the same age and experience bracket?

Try to arrange mentorships that will actually benefit both sides, rather than causing awkward feelings and little to no exchange of experience. Some things to look out for to arrange the best matches are:

  • An industry experience gap between mentor and mentee
  • Common career goals and aspirations
  • Similar interests outside of work
  • A mentor who formerly held the mentee’s current position, or a position the mentee is striving for

If you can pay attention to details like these, your mentorship program will be much stronger.

What does your employee referral program look like?

Are you way ahead of the game with a booming employee referral program already? Or are you just getting one off the ground? Do you find employee referrals helpful or a waste of your company’s time? I’d love to hear about your experiences in the comments section.

If you liked this article and want more fresh updates on talent management news, tech, and trends every week, subscribe to my email list and follow me on Twitter @CapterraHalden.

Looking for Talent Management software? Check out Capterra's list of the best Talent Management software solutions.

About the Author

Halden Ingwersen

Halden Ingwersen

Halden Ingwersen is a former Capterra analyst.


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