How to create an effective employee referral program | WilsonHCG

The competition for talent is tough. One way to ramp up your efforts for great candidates while reducing time-to-hire is with an employee referral program. Like calls to like, so chances are, your top performers know someone who’s an ideal fit for your organization. While every company has a unique take on referral intake and rewards, we’re going to review the basics of how you can have a creative, long-lasting employee referral program. 

What is an employee referral program? 

An employee referral program means employees have a designated place to submit family, friends and acquaintances who are good potential candidates for the business. This pre-vetting by current employees reduces hiring time. An internal referral program should be a vital part of your TA strategy. 

Do employee referral programs really work? 

Yes, they do! In 2021, we refreshed our employee referral program and got an impressive 82% of candidates to accept full-time roles. Our LinkedIn poll revealed more than half of respondents have both referred someone and been referred and hired. This indicates the effectiveness of networking as a business and keeping the door open, both for current and past employees. 

Similar to word of mouth, employee referrals will pour in when you listen to your people, prioritize your employee value proposition (EVP) and evolve benefits to align with what they’re looking for.  

Tip: Remember the importance of the entire candidate journey here, including exit interviews! Your former employees have the potential to become some of your biggest cheerleaders and refer potential employees over the years. Some even return later as boomerang employees themselves! 

How do I create an employee referral program? 

Collaborate with your internal recruitment department, talent attraction team or RPO provider to build out all the elements of what your program needs.  

RPO providers can help TA teams develop effective employee referral programs. Contact us to find out more about how we revamped ours. 

Incorporate the following for a holistic, successful employee referral program: 

• Make a separate portal specifically for employee referrals: This gives your team the ability to prioritize internal referral candidates over other sources. 
• Solicit alumni, temporary workers and contractors: Widen your net to include all types of workers who work with you — the word-of-mouth potential here is key to refer top talent. 

• Get leader buy-in: It’s essential to have your leaders advocate for employee referrals. Consider appointing an executive sponsor to send out announcements personally; it can make a larger impact. 
• Communicate updates frequently: Keeping employees informed on the number of referrals streaming in encourages more people to participate. It’s also a friendly reminder in case someone forgot to submit. 
• Reward internal employee submissions monetarily: Host a raffle with cash prizes or gift cards for every referral that’s extended an offer. This is great if your referral pool is drying up or has stagnated. Shake it up a bit! 
• Say “thank you” regularly: Recognition goes a long way. Thank your employees for referrals and encourage them to continue doing so during companywide meetings, like town halls, all-in calls and huddles. 
• Give referral candidates the VIP treatment: Make referred candidates feel special by contacting them within 1-2 days after submission and being candid in your conversations. Bringing a comfortable atmosphere will set the stage for a great interview process, especially since you already know they’re most likely going to be a great culture fit! 

While you may think a sign-on bonus once a referred candidate starts is a surefire way to get more referrals, the research says otherwise. Generally, employees who are engaged are incentivized to help their family and friends.  

82% of employees rated internal employee referrals above all other sourcing options to yield the best ROI according to erin.  

The best way to create an effective employee referral program is to have a genuine and engaging culture and continuously update and iterate based on what your people value. With today’s candidate-driven market, be sure to champion work-life balance, flexibility and an inclusive environment that welcomes people from all walks of life.  

Think about what you've done to improve your company’s referral program and implement some of these tips to boost your results.