How to Create an Employee Referral Program That Actually Works

How to Create an Employee Referral Program That Actually Works

If you’ve never had an employee referral program, you might be surprised to find out how effective they can be. If used correctly, your referral program can be one of the most valuable tools in your hiring arsenal—helping you recruit top talent, faster, without taking up time or money on your part. But that’s only if you do it right! This employee referral program template will show you how to create an employee referral program that actually works… and doesn’t cost your company any time or money in the process! Click here to learn more about the employee referral program template (and see it in action!)

What Is An Employee Referral Program?

Employee referral programs are one of the most common and effective recruitment tactics for small and large companies alike. They not only save on HR costs, but they also provide a personal touch when recruiting prospective employees, meaning that you get candidates who are more invested in your company.

Employee referral programs can come in many different shapes and sizes, but their primary goal is to incentivize your employees so that they refer new people for a job with your company. This can be as simple as cash rewards, free lunches or gift cards – whichever suits the business best.


2 Things To Do Before Creating Your Own Plan

  1. Determine what type of incentive works best for your company: cash, time off, gift card or swag.
  2. Find out how much money you can spend on incentives each year and see if it would be better for you to purchase them in bulk for cheaper costs.

 Steps To Creating A Great Employee Referral Program

One of the best sources for finding potential new hires is already on your payroll. To inspire their current employees to make introductions, we recommend setting up a refer-a-friend program that offers rewards such as points or a cash reward. Here are the steps:

  • Designate employees as referral advocates who are passionate about what they do and have plenty of connections in their industry. These should be people whose opinions you trust and who can communicate well.

Keep Track Of Your Team’s Performance

In order to create a referral program that actually works, you need to figure out how you are going to track your team’s performance. Are you going to measure the number of referrals they get? The number of people they refer that sign up for your service? In some cases, you may even offer them a bonus for referring someone who signs up for your service. Whatever it is that you decide on, try and make sure it isn’t too time-consuming or confusing because it will affect your bottom line if employees aren’t able to take advantage of it.


The easiest way I’ve found is offering a commission per new signup – and making the commissions generous enough so as not be prohibitively high.

 Other Important Tips For A Successful ERP

Create a campaign that everyone can be a part of. You want to make sure you engage employees at all levels of the company, not just executives. When it comes to your best marketing tool: your people, encourage your team members to take the lead and invest in their colleagues’ success by spreading the word about how much they value them as an employee. Incentivize ERP campaigns with rewards that both reward the referrer and honor the recommender (i.e., free lunch with higher-ups, etc). Recognize exceptional employees on a regular basis; high performers who are encouraged by positive feedback will work even harder for you.