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Employee Referral Examples

How to create an employee referral program with Hireology

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Employee Referral Examples

Employee referrals are one of the best sources of hiring. Why? 

Because they allow you to bring qualified candidates into the hiring process with little investment, simply by encouraging your current staff to refer their peers. Creating incentives for employee referrals helps you fill your talent pipeline at a fraction of the cost of job boards with a much higher return on investment. According to Hireology data, one in eight hires made is an employee referral and employee referrals are four times more likely to be hired than non-referrals. 

Several factors play into this — great employees on your team have a great network, so referring their peers will help you get more talent that works hard and can get the job done. And when your employees refer someone, you can skip quite a bit of the vetting process since they have technically already been vetted by your current employee. This helps you to move them along at a greater velocity than when someone you don’t know comes through the process.

In fact, one out of eight employees hired by Hireology customers are an employee referral. And, 38% of referrals are moved to the candidate stage compared to 21% of non-referrals. 

So the business case for establishing an employee referral program is significant, but where do you start? 

In this post, we’ll walk you through an employee referral explanation example, employee referral examples including how to set up a program, questions you’ll need to answer for your staff like how to refer a friend for a job, what type of incentives to offer, and more. 

Additionally, we’ll highlight some great employee referral programs that have been set up at leading companies to help set your organization up for success. 

Employee referral definition

The employee feral definition is any candidate or current employee that was recommended by another employee as a good candidate for a role. In order to encourage employee referrals, it’s important that you create an employee referral program. This is a structured program that incentivizes employees to refer their friends and peers to work at your company. 

The benefits of employee referral programs are huge — as mentioned in the paragraph above, the number of qualified candidates you are privy to with an employee referral program is vast, especially when you have good incentives that make your employees more keen to refer their peers.

In order to create an employee referral program at your organization, you should start with the following employee referral program guidelines: 

  • Create an employee referral policy:

To get started, it’s important to create the rules that will guide your employees and your new hires. You need to establish what type of incentives you’ll offer, whether it be monetary or otherwise. When your employees will receive their payouts — some employers set up payouts on a schedule to incentivize both employees and referrals to stick around. And you’ll have to outline who qualifies for the program: some employers don’t allow directors or HR professionals to participate as their roles already require them to bring on new team members. Additionally, some organizations don’t allow employees to refer their spouses or family members so that there aren’t issues around favoritism. 

  • Outline your employee referral bonus:

Designate whether you’ll be offering monetary compensation for referrals or if you’ll opt for gift cards or other compensation, like paid time off. These employee referral bonus examples differ from traditional incentive compensation, but it doesn’t mean they aren’t effective. You can pol your employees to find out what would make them most likely to refer their peers to get a better idea of what they’re looking for. And when it comes to amount, use trial and error and decide on tiers of openings. For example, you can offer $500 for an entry-level position, $1,000 for a manager, and $1,500-$2,000 for a director-level role or one that is more difficult to fill. 

  • Communicate your program to your employees:

Your employees can’t participate if they don’t know the program exists, so make sure you’re getting the word out. Use your internal channels, like Slack and email, to make sure your entire workforce knows about your program. Additionally, utilize all-company meetings to highlight the program, along with specific roles that you’re hoping to fill. You can come up with a few employee referral program names to help make the program more memorable for your staff as well.  

  • Establish employee referral program benchmarks:

The best employee referral programs adapt with time and are based on the goals their company sets. This will allow you to track the success of your program and make sure that you’re actually seeing results. You can set goals for each quarter or the entire year, but make sure to keep reporting them out and improving your process when necessary, whether that be with bigger incentives or more communication. 

Employee referral program ideas

So as you start to construct your employee referral program, look to these employee referral program ideas for inspiration: 

Hireology 

Hireology has an employee referral program that offers a tiered payout system where Tier 3 is paid the highest amount. Tier 1 is for non-technical roles (think marketing, sales, customer success, people, finance, etc.), Tier 2 is for technical roles, and Tier 3 is for hard-to-fill roles that are determined based on employment conditions. We payout half of our bonus on the employee’s first day and the second half after they complete six months of service. And if you refer three people who are hired within a 12-month period, you will receive an additional bonus. Hireology also just recently acquired EmployUs, an employee referral platform, so it’s easier than ever to refer employees.

Google

The Google employee referral program has had a recent refresh because they saw the value it was bringing to their organization. Firstly, they doubled their referral bonuses, but that didn’t make the impact they were hoping for. So they instead decided to begin the referral process in new employee onboarding by asking every new hire “Who is the best (salesperson, engineer, developer, etc.) that you have ever worked for?” and “Who are 5-10 people you would want to work with again?” That’s a great tactic to get employees thinking about their network, and Google saw a 33% increase in employee referrals. 

LinkedIn

LinkedIn branded their employee referral program to get their team more excited about it. They also increased awareness through internal ads, dedicated recruiters to the employee referral program, and publicly recognized employees who were referring candidates. Lastly, they tell their employees exactly what they are looking for so that their team can think about who would be a great fit in their network. 

These sample employee referral programs can help you determine your best course of action in creating your own program. 

How to promote employee referral program

Employee referral program communication requires a lot of persistence because it can be easy for your employees to forget, especially when the program is new. You have to make sure you call out the program often, highlight your open roles, and remind your team of the incentives you offer for each referral. 

When it comes to how to promote employee referral programs, you should use your current internal communication avenues, such as email, Slack, and word of mouth. And make sure you call the program out in all-company meetings, too. You can also have your managers and team leads cascade the program details to their teams in weekly meetings so it’s always at the top of your staff’s minds. 

Here’s an employee referral email sample that you can use to spread the word about your program:

Hi team,

I wanted to remind you all of the great new employee referral program we’ve set up. At the moment, we have 15 open roles, and each week we’ll highlight a role and some of the high-level qualifications we’re looking for. If you know someone who may be a good fit, please let the HR team know.

Role: Sales Development Representative

Qualifications: Two or more years of sales experience, great communication skills, able to work in a fast-paced environment and meet quotas

Payout for this position: $1,000

To learn more about the role, you can find the job description here [link to description]. 

Thank you,

XX

Another great way to spread the word about your program is by creating employee referral program flyers to tack up around your office. Do you have a bulletin board where you post announcements? How about adding some along the hallway to the bathroom? Or by the water cooler? And in the lunchroom? Anywhere you can post these to get employee attention is a good move. 

Have these employee referral examples made you ready to set up an employee referral program of your own? Through Hireology’s recent acquisition of EmployUs, we now have the tools to help you set up a great employee referral program that’s easy to manage and submit applicants to. 

Interested in seeing it live in action? You can schedule a demo below.