9 Benefits Of An Employee Referral Program

A great source of finding quality people for your business is through your existing tribe. But sometimes they need a reminder nudge and an incentive to offer up their contacts. That's where an Employee Referral Program comes into play.

An Employee Referral Program is a simple concept. You offer a reward in return for an existing employee to refer a quality candidate resulting in a new employee.

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Let's take a look at the benefits of an Employee Referral Program...


  1. it puts hiring at the forefront of each employees' mind helping spread the task of sourcing for candidates
  2. you will most likely get referred a candidate who your tribe would back their reputation on
  3. hiring through reputation builds trust and a strong tribe
  4. massive cost savings compared to other hiring sources, particularly using recruitment agencies
  5. time savings - interacting with one of your own employees is much easier to do than with an external party
  6. your employees feel valued for their contribution - it's a culture boost!
  7. your employees also appreciate the reward they receive
  8. your tribe does the hard sell for you - an engaged employee = a great recruiter
  9. you can get innovative with your rewards. Run competitions for the most amount of referrals or up the referral reward during a recruitment drive. Vouchers, gifts and time off are also fun ideas!


Tips To Setting Up Your Employee Referral Program

Employee Referral Programs work because it is highly unlikely that your existing employee will suggest you hire a dud as it reflects poorly on them. So there is an upfront filtering process that washes over the candidates before you get to meet them.

Your employees are a trusted source and hiring their contact can boost your culture and the other intangibles that go along with it. Just reassure your employees that there are no negative consequences if they do refer a dud. Sometimes it might happen and that's ok.

An Employee Referral Program is less about the incentive, as if you're a great place to work people will recommend you anyway. It's more about the employee receiving recognition and feeling valued.

And remember, keep it simple.

  Michael Poon  - CEO of Tribe9  Interested in creating an Employee Referral Program in your business and need some advice?

Michael Poon - CEO of Tribe9

Interested in creating an Employee Referral Program in your business and need some advice?

You don't want some convoluted program and rewards system that is so complicated that your employees don't even bother. Ensure you internally promote the program regularly, communicate the vacant roles in your business with the position descriptions easily attainable so your employees can distribute to their network.

Keep the referring employee in the loop throughout the hiring process and communicate to everyone when a successful referral has been completed. It's a real morale boost!

Also, it's important to note that the rewards don't have to be cash. It could be a week off, a voucher, an experience or something personalised to the employee. For the sake of keeping things lean, consider paying your referrals upon hire. Who wants to wait until probation and all that jazz for a reward. If you trust your hiring process, referrals are best paid early on. 

So there you have it! Implement an Employee Referral Program today as it can raise employee engagement of up to 60% and contribute to at least 40% of your new hires.