A Look At The Makings Of An Effective Employee Referral Program

Welcome to recruiters' number one source of hire - the employee referral program.

A Look At The Makings Of An Effective Employee Referral Program

If you're serious about your talent acquisition strategy in 2021 and beyond, you need to have a referral program. It is as simple as that. Aside from being a great way to source culture-appropriate candidates, it's also highly cost-effective and not as difficult to implement as you may imagine.

By now, we all know that referrals are every hiring manager's dream. Statistics show that more than 80% of employers say that referrals offer the best ROI when it comes to recruitment. This is why forward-thinking companies and top hiring teams are focusing on developing their own ERPs (as employee referral programs are known in the biz) alongside other innovative recruitment methods.

Having an ERP in place can lead to all sorts of good things. This includes snappy hiring timelines, direct access to fantastic candidates, a reduced hiring budget, robust eNPS, reduced employee churn, and higher levels of employee satisfaction and overall engagement. Sounds rather amazing, don't you think?

Here’s what you need to keep in mind when you tailor your own ERP to source top talent.

5 Steps To Tailoring An Employee Referral Program That Converts

Tailor ERP

1. Know What Your Aims Are

There are various reasons to institute an ERP, and it helps to know what your aims are before you start. Do you want to get positions filled more quickly? Do you want to reduce cost per hire? Knowing what you’re shooting for will help you to lay the groundwork for your referral program, as well as to measure the effectiveness thereof down the line.

2. Make The Process Easy and Uniform

For an ERP to work, it has to make it very easy for referring parties to do their referring. Different approaches work for different businesses - if you are running a very small operation and all sit within speaking distance of one another, you can literally just ask your team to send along any LinkedIn URLs of people they think are suitable.

On the other hand, if you’re running a huge, multinational enterprise, there will be more logistics involved. In cases like these, you ideally want to have a talent experience management platform in play. After all, if information falls between the cracks when your team sends you a referral and they don’t hear back from you, they are unlikely to do so again.

3. Promote Your ERP So That It’s Top of Mind

It’s important to remember that referrals are likely to be the last item on a very long to-do list for most employees who have more than enough on their plate.

When you need to activate this platform, do so in ways that grab their attention, and across various channels. Mention it in meetings, post openings on your company’s social media platforms in a nicely shareable format, etc. Get creative and stick with it.

Promoting ERPs

4. Give Them A Reason To Refer

In the end, it all comes down to this - you need to give people an incentive to refer their friends, family, and acquaintances to your recruitment team. While there are some selfless souls out there who will go the extra mile without expecting anything in return, most of us are much more motivated to come to the party when we know that there are going to be proverbial goodie bags.

You can reward successful hires in many different ways - it all depends on what your employees prefer. Most are happy with cash bonuses, but the option of charitable donations in their name or experiential rewards like holidays and flights are also very popular.

5. Check If It’s Working

The best way to know if your ERP is in good working order is to check your metrics regularly. Gather data that will allow you to measure how many candidates and new recruits are sourced via the ERP in comparison with other channels, as well as changes in spend per hire, hiring velocity, etc.

In time, these insights will help you to optimise your program.


Employee referral programs are efficient, cost-effective and don’t have to be difficult to implement. The key lies in reciprocity - it has to be a two-way street with benefits for the referring party as well.

Start by knowing what your aims are, making the process easy and uniform, and keeping your ERP top of mind internally. Then remember to give people a reason to refer, and check that your program is working.