employee referral program

Here’s a Quick Way to Learn all About Employee Referral Program

When you see a movie or eat mouth-watering food what is the first thing you do? You tell your friends or post it online (the usual Instagram ritual!). So why not tell your friends about the job where you work and let them also enjoy all the perks that you get at your workplace. By referring friends to the company where you work is the way one can benefit all the entities included that will be employee, their friend and the company. This is the blog, where I will tell you all about the employee referral program and leave you in no doubt about it.

Before bombarding you about you all on employee referral let us talk about referral program!

Referral programs are a sure way of getting the best optimization in any business irrespective of the industry. Be it an eCommerce or any financial institution, the referral program has been a great deal for all the businesses. Usually, marketers think that referral programs are only meant to gain or retain customers but referral programs can be of great use for Human Resource too.

Almost all the companies are adopting the employee referral program because it carries a lot of benefits that I will tell you later in this blog. (Why to spread all the cards at once right?) But first, let us know what employee referral literally means!

What is the Employee Referral Program?

Employees are one of the most valued entities of any organization. They not only bring manpower to the company but also can be helpful to the HR department for recruiting of new employees. This strategy is one of the most common strategies followed by most of the companies. The referred employees are the most loyal ones, they stay longer and it takes the shortest time to hire them.

Employee Referral means when an employee of a company refer their friends (or anyone in their network) to the opening positions in their organization. It is easy to hire the referred employees because they already know about how the company works.

There are a lot of perks of an employee referral program that are coming your way. But before that let us know how the employee referral program works.

Traditional Hiring vs Digital Hiring

When the world is going digital for everything so why stick to the traditional ways to hire new employees? Traditionally the HR Department of any organization would ask any employee to bring in their mates. (by recommendations)

The traditional way carries a lot of drawback as managing the track of new employee could get a little messy sometimes. Here comes the Referral Program to hire employees in action. To manage the referral program you need a Referral Software that can manage everything for you.

Once you get a referral program software for hiring the employees you get the following benefits:

  • No need to keep track of every referral made by employees. Referral software tracks everything on its own.
  • Keep your employees posted and updated with their referral’s status via emails.
  • No more worries about the integration and set-up, as software provider serves it all.
  • The rewards disbursement (on successful referral), is automatic.

How Employee Referral Program Works?

how employee referral works

Employee Referral is a structured way of hiring new employees. It takes a lot of planning and designing of the program because finding new talent for a company requires it. There are many companies that haven’t adapted the structured way of hiring employees—it takes a lot of manual power.

But why to deteriorate the manpower when there is the space for software in the room. Usually, a company needs an employee referral whenever there is new hiring in your organization.  

There are a few things that you should always consider before starting an employee referral program.

  1. Always include the incentives in the referral program
  2. Keep your employees posted on the new job openings.
  3. Keep your employees updated with the status of their referrals.
  4. Create easy structures for the employee referral so that the whole process is easy to work with.

How to Create an Employee Referral Program?

Creating a Referral Program is not a complicated task but managing it sure is. (Not if you are using referral software). The whole process of creating an employee referral program consists of 4 steps. That are Set Goals—Design—Promote—Manage.

how to design employee referral program
Set Goals
  1. Know the type of job postings available.
  2. Know who to engage your employees.
  3. You should know what incentives can attract your customers the most. (A secret: Bonus Rewards are the best).
  4. Know the time and budget of your organization that will be used in the referral program.
  5. Dedicate a staff in-charge of the incoming referrals.
  1. Set some rules and policies for running the employee referral program.
  2. Keep the process of referring to hiring, simple.
  3. Contact a Referral software provider to create interactive referral programs.
  4. Set some rewards/incentives for your employees.
  1. By just creating a referral program won’t benefit you need to tell your employees about the same.
  2. Create campaigns. Send personalized emails to every employee of yours.
  3. You can also organize special events and parties to make employee referral a big deal.
  1. There are two ways you can manage the employee referral program. First, either you can do all the work by yourself or you can contact a referral software provider to help you manage the whole referral program.
  2. Once everything is done, do not forget to thank your employees by rewarding them their bonus, and ensure these bonuses are reflected accurately in their payroll software like paystubs or use payroll software for small businesses.

Since we know how to create an employee referral program and how the whole system works, let us discuss some benefits about employee referral.

What are the benefits of the Employee Referral Program?

Finding talent from the existing employee network is the best way to grow an organization. The following can tell you about the benefits that employee referral carries:

referred employee

Reduced Time per Hire

Since the employees that are coming from the referrals of the existing ones know a lot about your company and its hiring process thus you don’t need to explain them from the tip of the nail. You can contact those much easily and fetch their profiles with accurate referral management which can be done through right recruitment Management System.

The referred employees know all about the working of the company. Thus, it takes less time to explain to them all about the organization and its work.

Brand Value

Before buying any product most of us usually lookout for the reviews to judge the brand similarly whenever anyone is applying for the job they look out for the reviews about the company.

But if your employees go out to refer you to anyone they will surely talk good about you. (as incentives are on their way!)

Referred Employees Stays Longer

It is a fact that the candidates who are referred are likely to stay longer and are easier to retain. Because they have their mates in the company which makes them stay longer in the organization.

data on employee referral

The Best Talent

Since the new candidates will be coming in via the existing employees. Thus those candidates will be more likely will be better than the others. Also, according to researches, the referred workers are more productive than the others.

The referred ones know the insights of the company which results in contributing more to the company.


Many organization handle their employee referral campaigns manually but since sometimes all the process can go crazy, strategic software is their main priority now. By the employee referral not only you get new talent but also many benefits.

Sara Williams

Sara is a Content Writer at InviteReferrals. She is not only a creative writer but also paints a beautiful canvas. She makes sure that you are left with no doubt on keeping up with marketing and sales.