Click here to read more about our Total Workforce Solution (TWS).


employee referral network

How To Build an Employee Referral Network 

Hiring can be difficult – it’s hard to know how well a candidate will perform and fit into your company based solely on a resume and an interview. One strategy many businesses use to improve hiring is an employee referral network. Your employees know your company better than anyone, so they can help to refer others that they think will be a good fit for your open positions and your company culture. 

A referral network is also a great way to prepare for future hiring. If your business has stopped hiring due to COVID-19 but intends to staff up once the economy recovers, a referral network can help you hire faster once the time comes.  

Creating a successful employee referral program takes some thought and effort as well, however. 

Why Hire Employee Referrals? 

While an employee referral may not always be the best pick for the job, there are a few benefits to hiring referrals. You should at least consider referrals when hiring for new positions, but shouldn’t give preferential treatment to those candidates just because they were referred by a coworker. 

First of all, you can ask the referrer questions about their impressions of the person they referred. If they’ve worked with them before, they can offer insights into their work style, accountability, and skills. This can be useful information that you normally wouldn’t learn until after they’ve been hired. If there are any red flags, you should be able to learn in advance. 

Secondly, the person who referred them may help determine their cultural fit. If your current employee thinks that their referral will fit into the company, it can ease their transition into the new workplace. Your employee knows the company culture and knows the person they referred, so they can use both perspectives to make a recommendation.

Another reason is that referrals typically speed up the hiring process. Instead of posting a job listing and wading through all of the applicants, you can check your referral network first and possibly find a great candidate faster. 

Finally, referral hires have a higher retention rate compared to standard new hires. One study suggests that employee referrals have a retention rate of 46%, while the average retention is closer to 33%.

How to Create an Employee Referral Program

To create a successful referral program, you’ll need to consider both how employees can refer candidates, and why they would. Take these steps to create or expand upon your employee referral network and improve your hiring process.

Offer Incentives

Short of getting a good friend hired at their company, there may not be much incentive for referring other professionals in your network. Create incentives to encourage your employees to refer qualified candidates. The incentive should only be rewarded if their referral results in a hire; this ensures that employees will try to refer the best fit for the position, as it will increase the likelihood that they get hired. 

Referral incentives could be cash bonuses, but if your business is strapped for cash there are other incentives. You could offer gift cards, company products, other gifts, or an extra vacation day as a reward. 

Communicate with Employees

Communicate the employee referral program clearly with your employees. If it’s in the fine print of an employee handbook, they might miss it. Remind your employees of your referral network if it already exists, or announce the new program and its rules when you create it. Make sure employees understand how to submit referrals and how they can be rewarded. 

Even if you’re not actively hiring, you can create a referral network. Much like a talent network, a referral network can be stocked with candidates for when you’re ready to hire. That way, you have a network of pre-sourced candidates waiting to be reviewed when a position opens. 

You should also be sure that employees understand the limits of a referral program. Just because they refer a qualified candidate does not mean that they can guarantee their friend the position. Be clear about how referrals work and how they will be considered, and make sure your employees convey that message to anyone they refer. 

Stay Organized

Keep your referral network organized on some platform or by using technology of some sort. If you have an applicant tracking system or a CRM, you can add them into that software. Create folders in your inbox or in tools like Google Drive or Sharepoint. However you choose to stay organized, make sure that referrals are stored in one place that is easy to access. You should also develop a system for how your employees can submit their referrals. 

Make sure that referrals don’t get lost in your inbox; creating a network of referrals means keeping these potential candidates organized and easy to access when it’s time to hire. 

Leverage Social Media

Your employees might not have the perfect candidate on the tip of their tongue when you announce a job opening, but that perfect candidate could be in their social network. Think about it: you’re probably connected with plenty of acquaintances online that could be qualified, even if you don’t realize it. That’s why you should encourage employees to use social media to expand your referral network.

LinkedIn is especially useful for finding professional connections. Each of your employees has their own professional network on LinkedIn, so if they share job listings they might reach highly qualified candidates that are looking for a new job. Ask your employees to share any open job listings for your company on their LinkedIn or other appropriate social accounts to reach a larger pool of connections. 

Judge All Candidates Equally & Provide Feedback

An employee referral network does not guarantee the best results. While there are benefits to hiring referrals, there may be better applicants from job sites or other resources. Evaluate all candidates with the same standards to create a fair hiring process and so that you hire the best fit for the business. 

Some companies provide feedback to candidates that didn’t get the position. You can choose to do this, as well as provide feedback to your employees as to why their referral was good or bad. Be careful with how you share this information – you don’t want to be too critical of their referral. Simply share why they did or didn’t fit into the company so that they can provide better references in the future.


If you’re looking to grow your business, referrals are a great way to hire. You can also work with a recruiting company like ORS Partners to scale your business with the help of hiring professionals. Contact us today to learn more about how we can help grow your business!

You know your business. We know talent. Let’s scale together.

Contact us Today