Employee Referral Program

Includes an employee referral program policy template and answers to common questions.

By Paul Peters, Nov 23, 2023

Paul Peters is the Chief Editor of Betterteam. He's a former print journalist and small business owner and has written articles for a variety of newspapers, magazines and websites.

Employee referral is a recruiting channel by which companies discover potential job candidates via existing employees. Employers will often offer employee referral bonuses or other perks to further develop this recruiting channel.

Employee Referral Program Template Download:

Use this employee referral program template to get started on a referral program for your company. Download it in MS Word and customize it to suit your needs.

Download Now

Employee Referral Program Template :

1. Overview.

This employee referral program policy outlines [Company]’s referral procedures and rules. We are always looking for top talent to join our ranks, and you can help. We trust our employees to know who may be a great fit for a job at our company and offer an incentive award when a referred candidate is subsequently employed at [Company].

2. Eligibility.

Who can make a referral: The referral program is open to all our employees except for directors, all human resources employees, and any employee associated with the candidate selection process.

Who can you refer: Candidates who are currently not employed at [Company] and who have not applied for a position at [Company] within the last 12 months.

3. Referral bonus amount.

Bonus amounts vary depending on the type of position, with rewards being higher for roles that are harder to fill.

Bonus amount for entry-level roles: [$XX]

Bonus amount for specialist roles: [$XX]

4. Additional program rules.

Referrals must be submitted to the HR department and include the job title and reference code, the full name of the candidate, the full name and work contact details of the referring employee, and the referral’s resume.
If a candidate is referred by more than one employee, only the first employee to refer the candidate is eligible for the referral bonus.
Referrals can only be made for job openings that have been posted.
Referral bonus payments are only awarded after the referred candidate has been employed successfully completed their probation period at [Company].
There is no limit on how many candidates an employee can refer.

Employee Referral Form Template Download:

Use this employee referral form template to make it easy for your employees to submit potential candidates for referral.

Download Now

Employee Referral Form Template:

Referral Guidelines

To refer a candidate, complete and submit this form accompanied by a copy of the candidate’s resume to the human resources department.
Only external candidates and candidates who have not applied for a position at [Company] within the last 12 months can be referred.
Referrals can only be made for job openings that have been posted.
The referral bonus is only awarded after the candidate has been employed at [Company] and completed their probation period.
If more than one employee refers the same candidate, only the first referral is eligible for the referral bonus.
Directors, human resources employees, and employees involved in the hiring process are not eligible for the referral bonus.

Employee Information

Employee Name:
Email address:
Date:
Department:
Phone number:

Referral Information

Candidate Name:
Email address:
Position referred for:
Phone number:
Job reference code:

For Human Resources Use Only

Date received:
Hire date:
Bonus awarded:

Employee Reward and Recognition Program

A step-by-step guide to developing an employee reward and recognition program.

FAQs:

Do employee referral programs really work?

Yes. Research has shown that employee referral programs reduce the time to hire, when compared to using career websites, and encourage employees to spread the word about your brand. When employees refer people they know are capable of doing the job, this improves the overall quality of hires in your organization.

How much is a referral bonus?

It varies quite a bit, depending on which survey you look at. One survey places the number at $100.00 and less or $500.00 and more, without many bonuses falling in between. Another survey found that average referral bonus programs paid between $1,000.00 and $2,500.00 per successful referral.

What are the best ideas for a employee referral program?

Ask employees who they'd like to work with again.
Do a referral coffee, lunch, or happy hour when employees can invite referrals to meet the team.
Think beyond cash bonuses. What would most help your employees get excited about referrals?
Ask employees what the best teams were they worked on, and get in touch.
Target Facebook ads at your employees that encourage them to share info about roles.
Make sure your careers page is one employees will be proud to share.
Email pre-written social media updates about jobs and ask employees to share.

How do you promote an employee referral program?

Attach it to emails when you ask employees to refer talent.
Collaborate with your marketing department to promote your program.
Educate your HR staff on its value.
Keep it simple.
Offer staff incentives for referring talent.
Highlight your program's success, which will promote employee interest.
Tap into your ATS's employee referral technology.

How does an employee referral program work?

An employee referral program, or referral bonus program, encourages existing employees to share job openings with potential candidates by offering them a referral bonus. Oftentimes the bonuses are monetary.

What is an employee referral?

A employee referral is where existing employees refer job candidates.

Is employee referral important?

Yes, because it reduces the time to hire, and it improves the overall quality of hires in your organization.

Is an employee referral bonus taxable?

Yes, if it is cash. If it is non-cash, it is probably tax-free.

Why do referral programs work?

Employee referral programs work because they reduce the time to hire, and they improve the overall quality of hires in your organization.

How do you encourage employee referrals?

Award cash.
Put up a referral leaderboard.
Try non-cash rewards e.g. tickets to an event, or a meal or shopping voucher.
Show recognition for referral efforts.

What is an employee referral bonus?

An employee referral bonus is given to employees who refer suitable candidates for open positions in your company.

What is a job referral form?

A job referral form is used to pass information about a potential candidate along to a hiring manager, an internal recruiter, or HR, and is also used to give credit to the referrer for any potential bonus.

Are employee referrals a viable way for a small business to recruit?

Yes. Bigger companies may be able to cast a wider net for a job referral, but at a smaller company hiring managers can have more direct contact with rank and file employees, where they can help keep referrals at the top of their mind.