Designing an Employee Referral Program


An Employee Referral Program engages current team members into the hiring process by offering them a chance to refer candidates they feel would be suited to a role, often in exchange for an incentive of some kind (eg money/PTO). It’s a benefit for both employee and business owner because not only is it a relatively affordable recruitment strategy, it also demonstrates to staff that employers care about who they work with, and that means a lot these days.

Why have a referral program? They’ve shown to bring in more qualified candidates (especially passive candidates), improve the speed of the hiring process, and boosts retention rates. All the while lending some hefty positive vibes to your company culture due to the aforementioned involvement of current employees. Sound good? We think so!

But like most things with your business, it takes a little planning before implementing. This week we’ll go over some of the more important factors to consider when designing a referral program but worry not, it’s really not a headache to get going. You’ll be on your way in no time!


A profitable employee referral program


  1. “Pitch” the idea to employees. Get a good reading on their enthusiasm. You’re not really deciding whether or not to proceed with the program, but rather where you might want to address some concerns or grey areas.
  2. Make marketing materials available. Can be as simple as a postcard, but have something (small) on hand that an employee can give to their prospective candidate. For some people, it’s helpful for them to have a tangible item to get a conversation going. At any rate, it will have the necessary contact info a candidate will need to apply.
  3. Offer an incentive. As we mentioned, typically money or time off are offered for successful referrals. They work really well. Another thing to consider? Showing appreciation to employees who try to recruit, even if it’s unsuccessful. This can be a ‘lesser prize’ but the sentiment behind it will mean a WHOLE lot.
  4. Be clear on what qualifies as a successful referral. This is really important. Make sure to have any verbiage reviewed and then also be available for (and anticipate) clarifying questions. The last thing you want is disgruntled employees because they do not understand the program. That will ensure the program fails.
  5. Make the referral process easy. It is essential that candidates don’t need to jump through any additional hoops when applying as a referral. Have a spot on the application where they input the employee’s name, or something to that effect. Make it easy to find and complete.
  6. Follow-up PROMPTLY on those successful referrals! Seriously, don’t make employees wait for their reward.


If a referral program has been on your to-do list but you haven’t managed to iron it out, get the process going by outsourcing the project! You can identify a team from your staff to take it on, and will likely gain some interesting insight into what kind of program appeals to them. Also, don’t forget about HR! The HR department is an excellent tool for establishing creative and competitive hiring solutions.

Are you acting as your own HR dept and ready to relinquish that responsibility? Eos HR is here for you! If you’re looking for an HR department that can meet the demands of the modern workplace, give us a call. We’re a team of HR professionals helping small businesses succeed in this exciting, yet challenging professional environment.  Schedule a free consultation today to learn more.