Welcome back to our series on the recruitment process. So far, we’ve looked at why recruitment marketing should be incorporated into your recruitment process and how connecting with candidates who might not even be looking for a new job is vital to creating a flawless recruitment process that you can be proud of. 

In our previous post, we touched marginally on the value of expanding your candidate search to referrals, especially when you have a shortage of applicants. Referrals tend to onboard faster and stay for longer and you also save money on advertising and time that would have otherwise been spent on sourcing candidates elsewhere. 

Asking for referrals from employees and other people within your network adds an extra source into your recruiting mix since the likelihood is that they already know a decent number of skilled and experienced professionals between them, and some of them could be your next hires. 

What can Referrals Offer?

Referrals have more benefits than simply broadening your recruitment horizons – considering referred candidates can help you to: 

Improve employee retention: Candidates hired through a referral scheme are more likely to onboard faster and stay with the company longer as they are already familiar with the business, its culture and at least one other employee. 

Reduces time spent on hiring: When employees refer a potential candidate for a job, they are essentially conducting the screening part of the recruitment process for you since they are aware of the job role and its requirements and are unlikely to consider putting in a good word for someone who they believe wouldn’t be a good fit – after all, a bad hire would negatively impact them and their work. Knowing that you’ll be interviewing someone who meets the requirements for the role means that you can skip over the taxing screening stage and move right on over to the next stage of hiring. 

Reduced the overall cost of hiring: Even if you offer a referral bonus to staff as an incentive to put forward people they know, the total amount that you would be spending is significantly lower than what you would have to pay out for advertising cost and external recruiters. 

Increase the engagement of your existing staff: You aren’t just getting potential candidates out of a referral system – you’re involving existing employees in the recruitment process and allowing them to play a vital part in who you hire and how you build your teams. 

What’s the Best Way to Set up a Referral Program?

Knowing that referrals can benefit your recruitment process is one thing, but you won’t gain much from these candidates without having a solid referral program in place. 

Determine your Goals

When you set up your employee referral program (especially if it’s your first time!), you should start by asking yourself the following questions:

  • Do you want to obtain referrals for a specific position or do you want to connect with people who would be a good overall fit for your company?
  • Are you going to ask for referrals for every position you open, or only for the harder-to-fill roles?
  • At which point will you ask for referrals? i.e. before, after or at the same time as you publish the job ad to the public?
  • Do you have a particular goal that you want to achieve with referrals? i.e. increase diversity, improve gender balance, boost employee morale etc. 

Once you have determined all of the above, you can then create an Employee Referral Policy or encompass your employee referral program guidelines into an existing Recruitment Policy. The purpose of having these guidelines set out in an official policy is so that employees know how they can refer candidates and that there is information available on how the HR team will carry out the employee referral program along with other important details. 

Know how you want to Request and Receive Referrals

If you don’t have a system for referrals in place, email is the best way forward. Email your staff to inform them about an open job and encourage them to submit referrals if they have someone in mind who they believe to be a good fit for the position. Be sure to detail the skills and qualifications you’re looking for and include a link to the full job description if needed. You should also explain how employees can refer candidates to you. For example, this might be via email to HR or the hiring manager or by uploading their CV on the company’s intranet etc.

Describe what information you require from any potential candidates – i.e. their background, contact details, CV, LinkedIn profile etc. and the best way for them to provide this information.

Consider also including a form or a set of questions that employees can answer so that you collect referrals in a cohesive way. 

To save time, use an employee referral email template and change the job details for every new role. If you want to ask for referrals from people outside your company you can tweak this email or use a different template to request referrals from your external network.

Employees will refer good candidates as long as the process is easy and straightforward – you should avoid making this too complicated or time-consuming for them otherwise they might not want to participate. 

Reward Successful Referrals

Referring good candidates is not always a priority for employees, especially when they’re busy. Instating a referral bonus could work well as an incentive to encourage staff to make referrals as and when you have openings come up. 

This doesn’t necessarily have to be money; you can opt for gift cards, days off, free tickets, or other creative, low-cost rewards as a way of showing your appreciation to your staff for their efforts in helping you build your team. 

To build an employee referral bonus program, you will need to decide on:

  • Who is eligible for a referral reward – for example, it’s common to exclude HR team members since they have a say on who gets hired and who doesn’t.
  • What constitutes a successful referral – for example, the referred candidate needs to stay with the company for a set amount of time.
  • The type of reward offered for a successful referral. 
  • Whether there will be any limitation – for example, employees can’t refer candidates who have applied in the past. 

Do Referrals Always Work?

Referrals are a great asset to your recruitment process tool belt, but it’s important for you to understand the dark side that can sometimes present from a referral program. 


There’s no doubt about it, referrals can bring you some brilliant candidates at little to no cost at all. However, you should never rely solely on referrals to fill your job openings. People tend to connect with others who are (more or less) like them. For example, they have studied at the same establishment, have worked together in the past or come from a similar socio-economic background. 

To bring more diversity to the team, you should most definitely adopt multiple recruitment techniques as this will encourage people who have something new to offer your company. 

There’s also a danger of employees only referring people they like and want to work with – be sure to encourage them to refer professionals who have the right skill sets, even if they don’t know them very well. 

Referrals that get Missed

A big reason for employees feeling hesitant to refer good candidates is that there is no certainty to what will happen next. Will the candidate get hired? Won’t they? Will they prove to not be a good fit, and if so, will that reflect badly on them as the person who made the referral? What if the referral just gets missed and my connection is let down?

Each of these is a very valid concern to have – but they can also all be managed by having a clear and organised referral process. This allows you to keep all of your referrals in one place in order to track their progress. You’ll also be able to gather information on things like: 

  • The number of candidates you get from referrals for each position. 
  • The total number of people hired through referrals. 
  • The number of referred candidates who were pre-screened and are going thought to the interview stage. 

An organised process will also help to ensure that you don’t ever miss a candidate, which can be easily done when you haven’t got a specific and structured mechanism in place to obtain referrals from existing employees. 

Read more in part 4 of The Recruitment Process series where we look at why it’s important to make a good impression on candidates.