Reasons Why an Employee Referral Program May be Your Best Recruiting Tool

Boost productivity and shorten the hiring process by turning to your existing employees

By Daniel Abramson, HRSource

Do you offer an employee referral bonus? Are you familiar with the idea?

An employee referral bonus is an internal recruitment program that helps you find candidates by using current employees to tap into their sphere of influence and social networks. After all, good people know other good people from prior jobs, school, civic organizations, gyms, churches, etc.  

For example, you would pay the referring employee an incentive of $500, spread into installments after 60 and 180 days to make sure the candidate “sticks.”

Of course, if you don’t like the referred candidate, no worries …. just don’t hire them! As the boss, you understand the work ethic and culture. This process can help reduce the piles of unqualified and time-wasting resumes that you have to sift through. 

Here are the four reasons incentives are your best recruiting tool

  1. They improve the quality of the hire.
    When employees are referring their friends, they’re referring people that probably have a strong work ethic and good record of stability. They also know that a less-than-stellar referral could reflect poorly on them if things don’t work out! NOTE: Please be cautious about hiring family members.  

  2. A referred hire will generally onboard faster than a traditional hire.
    Referred candidates feels like they have a friend who’s not their boss to talk to as they onboard, so it helps get them trained and up to speed faster. It’s as if the referring employee is a built-in mentor and coach.

  3. Good people help foster a strong company culture.
    Culture has become the magic buzzword in the last few years, and for good reason. Organizations with a rich company culture have less than 14% turnover, while those with poor company culture exceeds 22. Plus, strong culture fosters happier and more productive workers.  

  4. They help you create an engaged workforce.
    In contrast, disengagement is expensive. Gallup research estimates that disengaged employees cost the U.S. upwards of $550 billion in lost productivity each year. Worst of all, they found that 70 percent of American workers are not reaching their potential, with 52 percent not engaged and 18 percent actively disengaged from their jobs. That’s a lot of people and money being lost.

If you have questions or want to see examples of templates that are ready to go, call or text me anytime at 540-535-8484. And of course, there is never a charge for recruiting and hiring strategies for BrandSource members.

Daniel Abramson is Managing Lead of HRSource, a comprehensive collection of customized employment tools and turnkey solutions exclusive to BrandSource members. For more information, contact Daniel at (540) 535-8484 or