How To Build A Successful Employee Referral Program

Long and tedious hiring processes often result in lots of applications from people who aren't a good fit. Therefore, you spend most of your hiring resources searching through resumes of unqualified candidates.

That's where an employee referral program comes in.


According to an Indeed survey, 74% of employers said candidates sourced from employee referrals were extremely qualified for the role.


This help guide will explain the benefits of an employee referral program (if you don't already know them), highlight common mistakes made with employee referral programs and give you a step-by-step guide on how to build your own employee referral program.


1. What is an employee referral program

2. Benefits of an employee referral program

3. The biggest employee referral program mistakes

4. How to build a powerful employee referral program

5. An example of an employee referral program that you can copy



1. What is an employee referral program

An employee referral program is an excellent recruitment strategy that companies use to leverage people in their network to refer qualified candidates for available roles in the company.

In return for these referrals or recommendations, companies offer a reward to anyone who helps them hire a successful candidate for the position.


2. Benefits of an employee referral program

Recruit high-quality candidates - people in your network already have a good understanding of your business which means they will be better equipped to identify strong, qualified candidates.

Increase employee retention - because they are a better match from the start, referred employees stay longer than employees recruited through other channels. 

Save hiring resources - candidates are likely to be familiar with your business which will speed up the onboarding process so you spend less on talent acquisition.


3. The biggest employee referral program mistakes

Limiting your referral program to just employees. Of course, your employees are an excellent starting point for your referral program. But, other people might also know someone who is qualified for the role and will be a good fit. Opening your referral program to the public increases your chances of getting high-quality applications. 


Not marketing your referral program. This falls in the same category as the point above. How can people refer an ideal candidate if no one knows you are looking? Share your employee referral program with your network, your suppliers, and your partners. 


4. How to build a powerful employee referral program

Building an employee referral program can seem like a daunting task and it can be. Our experts have built over 6000 campaigns and have put together their top tips and best practices to help you.


Define the job role 

First, you need to be 100% clear on the job roles you are wanting to fill. You can’t hope to get qualified candidates if you’re not even sure what you’re looking for. 


Prepare and plan

Fail to plan and you plan to fail. In order to build and launch a great employee referral campaign, you need to be prepared. Set goals, define how you want the campaign to work, craft the messaging of your campaign - this includes the message that will be sent when people share your referral campaign with friends.


Set goals for your employee referral campaign 

The overarching goal will of course be to find qualified candidates for the position, but having other measurable recruitment goals to track will be beneficial. It’s not practical to try and achieve all goals with your first campaign so pick a few to start off with. You can always reevaluate these later on. 

Some of these goals could be:

  • Increase the percentage of qualified applicants
  • Reduce the hiring time by 3 days


Choose a reward and incentive 

Employee referral campaigns can be single-sided where only one user gets a reward, or double-sided, where both the referrer and the referred candidate will get a reward or incentive. Choose the one that will help you achieve your goals.

Here are the three things to consider:

  • The reward or incentive that you offer should make commercial sense for your business. 
  • Choose a reward or incentive that employees, partners, suppliers, and the public will want to receive.
  • How will these be issued? Choose something easy to issue, easy to manage, and, keep track of.


Build your referral program

If you have developer resources on your team you can always brief them on how you want your campaign to work and they can build it exactly to spec. The downside with this is that every time you want to make a change to your program, you’ll need them to do it.


Off-the-shelf software like Referral Factory can help you build an awesome employee referral campaign that’s 100% on-brand, without having to hire a developer or learn any code. You can also then create a campaign for each position you want to fill. 


Integrate Your Referral Campaign with Your Business

Make sure you integrate your employee referral campaign with your internal processes This will minimize your workload by eliminating the admin of manually managing your campaign. There are many one-click, no-code integration apps to connect your referral campaign to your CRM.

If you can’t find an integration that works with your business tools, then find a referral software that has a great API so you can build your own connectors or one with Webhook functionality so you can integrate it yourself. We're a little biased but Referral Factory has everything you need to fulling integrate your employee referral campaign.


Launch your referral campaign

Once you've reviewed your campaign and tested it internally, it’s time to publish your employee referral program. The best referral programs are ones that go to market quickly, then evolve based on customer feedback – so if you don’t get it 100% right the first time, don’t worry, it’s all part of the journey.


Referral Factory customers can book a free campaign review with our team of experts. We'll go over your campaign with you from start to finish, offer advice on how to improve it, and share tips on how to promote it.


Promote your employee referral campaign 

If no one knows about your referral program, how can anyone join it or refer friends? Before you promote it, be sure to include clear instructions so that everyone knows how they can make referrals.


The first thing you should do once your referral campaign is live is to send out a company-wide notification informing all employees about the campaign and encourage them to refer. 


Secondly, contact your partners, ambassadors, and suppliers to let them know about the employee referral campaign. They might also know of people who would be excellent candidates for the position. 


Lastly, promote your employee referral campaign to your active customers. You can create unique referral links for your customers and send them out via email, text, or social media.


Here is an article that was written by our experts that you can use to promote your employee referral program and get more people referring - 30 Ways To Get Users Referring Fast


Track your employee referral program

To track your referral campaign effectively, you need to monitor its performance. Here are some of the metrics you need to keep an eye on 

  • How many referrals were made
  • How many referrals were successfully converted
  • How many positions you were able to fill compared to other channels
  • How managers and employees feel about the program


You will also need to track all of these things to you can stay on top of issuing rewards and incentives (depending on the type of campaign) to people who have successfully referred their friends.


5. An example of an employee referral program that you can copy

Need a little help launching your employee referral campaign? No problem. You can use this Employee Referral Program template as your own. 


Let's say Jessica is a current employee of yours. She has a friend Kirsty, that would be the perfect fit for the position. Below is an example of the journey that Jessica will experience when referring to her friend Kirsty.

Here is an example of the journey that Kirsty will experience when applying for the position. 


If you don’t have the time or resources to set up your own employee referral program, we can help! Reach out to us via our support channels inside your dashboard or send our support team an email to find out more about our Hire An Expert service.