Finding the right people to work for you is crucial. But top-notch candidates are not easy to come by. Not just that, the cumbersome process of going through hundreds of job applications can drain your energy and money. That’s why so many companies now have a referral program to encourage employees to leverage their own personal networks and find the right fit for a job.
Referral programs are a special HR approach to get employees to ‘refer’ worthy candidates for an open slot in your company. These programs use confidential, fillable forms to allow employees to refer a candidate, usually in the hopes of a financial or non-financial reward. This selective hiring process differs from normal hiring practices because referred candidates don’t respond to a job ad like regular candidates, but they are hooked up with a company by someone who already works there and vouches for their abilities, expertise, and willingness to work for the company.
Lucky for you, our premade employee referral form template makes the process much easier for you, saving you hours in research, design, and formatting work!
What Does Research Say?
It is a well-known statistic that referred employees tend to stay longer as they have a pre-existing understanding of how the company works or what the job entails, so they know what to expect. By improving the quality of hire, referral programs also help you find more qualified candidates, especially for specialized roles in more competitive industries, such as the tech sector.
What you need is a….
Once you chalk out a basic policy for your referral program (more on that later!) – you’ll need a systematic way to access all the information you need to make the whole process clear and fast. Our Employee Referral Form is ideal for hiring managers who want to collect this information in a formal & standardized way.
The template has three sections: the referring employee, the referred party, and HR. The first two are supposed to be filled by the current employee, and the third one is for internal HR decisions. Now, let’s explore our template in a little more detail:
Employee Details
No one better than someone who works in a company to tell if a certain candidate will gel in with your company culture and lay of the land. In this section, the form captures info about the details of the current employee making the referral, including their name, department, email, phone number, and position.
This information is crucial for determining whether the referring party is in a position to make the referral, as per your company’s referral policy. It is also important for tracking the success of your referral program and rewarding successful referrals.
Who Is Being Referred? And Why?
In this section, the form captures the following details about the person being referred:
- Name
- Phone
- Referred Department
- Referred Position
The referring employee also needs to specify what relationship exists between them and the person referred. This makes it easier for HR managers to assess and follow up with potential candidates. For example, they may be a former college fellow or someone from a past workplace.
Now, the blank spaces are provided to explain why the referring party thinks the candidate is a good fit for the role.
For HR Use Only
This section is specifically designed for use by your HR department. The idea here is to keep a record of things so you can update referring employees on the status of each referral. The other goal is to identify when the reward will be doled out.
Specify the following:
- When was the referral made or received?
- Has the candidate been called in for an interview (either in-person or online)? If so, when.
- Has the candidate been successfully hired? If so, on what date do they first report to work.
- When should the reward be given out?
Why Do I Need One?
- To streamline and expedite the hiring process
- Save on recruitment agency costs
- Reduce employee attrition
- Provide new employees with authentic insight into organisational culture
- Improves quality of hire
How to Create Your Referral Policy
As with every official company procedure, referrals must be backed by a well-thought-out policy. A written policy sets clear expectations and criteria for your referral programs. But as they say, the devil is in the details. So you need to have a good think about the details of your referral program first.
Here are some key questions to ask yourself before creating a formal policy for your Employee Referral Program:
- Is there a cap on how many referrals an individual employee can make? It is common for companies to limit the number of referrals as a way to encourage quality over quantity or by only accepting referrals for roles an employee is familiar with.
- How long must a referred employee work for the referrer to be eligible for a reward? Most companies only give out a reward once everyone knows that the new (referred) employee is here to stay. Rewards can be paid out 30, 60, or 90 days after hire, provided the referred employee is still with your company.
- Which employees are eligible to receive a reward? You will need to clearly spell out who is and who is not eligible to make a referral – mostly, it is hiring managers or members of the senior management who are not allowed to claim or collect a reward. That said, in some cases, managers are eligible for a reward when they refer a candidate for roles in a different department.
- Are rewards subject to taxation rules & regulations? In most countries, including the United States, referral bonuses are legally seen as a form of income and therefore, subject to federal, state, and local taxes. But it’s best to double-check with a tax lawyer to confirm.
- What’s your take on former employees? Decide if you are open to receiving applications from former employees who want to return. In most referral programs, you can’t refer a former employee, or for that matter, anyone who has already applied for a position within a certain duration, say, the past twelve months.
- Who does your referral program extend to? Be clear about what kind of team roles can be filled through the process of referrals. Decide on whether your policy only extends to full-time positions, or if part-time staff, consultants and freelancers can participate too. You might also want to consider if your referral program applies to every open role or for specific ones that are harder to fill.
Rewards
Now, you might ask why anyone would go through the hassle of filling out a form for someone else. I mean, what’s in it for them? Well, for one, there is helping a friend or relative land a good job. But for the most part, referral programs rely on material rewards to encourage employees to bring in good prospective candidates.
While cash rewards usually work best, you can be more creative and come up with interesting ideas for non-cash rewards, like:
- Extra vacation time
- Company gear
- Special meals
- Hotel stays
- Latest gadgets, such as a new phone or laptop
- Gift cards for popular brands like Amazon and Starbucks
- Gym or spa membership
- Other tangible incentives, like watches, apparel, or a food basket
If you are not sure what rewards work best, it’s always a good idea to ask your employees how they would like to be rewarded for referrals. Make sure your employees are familiar with the terms related to the employee referral bonus, say, how soon the reward will be paid out.
Wrap Up
While there is no hard and fast rule about which hiring process helps you attract the best candidates, one thing is for sure. Compared to more traditional HR methods, such as job finder sites or social media posts, referrals are a lot faster and more effective. In fact, did you know, according to Forbes, referrals result in 70% more qualified candidates compared to non-referrals!
By skipping the initial advertising and resume screening phases, you not only save time but also cut down on the costs incurred in hiring the services of recruitment agencies or online job sites. On the flip side, though, referrals are sometimes problematic as they can foster a culture of nepotism or result in a loss of team diversity since there is a good chance that the referred person has a similar social, economic, or cultural background as the person referring them. They can also end up with a disgruntled employee when a referral doesn’t go through, and the employee referring develops hard feelings against the management.
Use our free, fillable, and 100% editable Employee Referral Program template to contribute to your company’s success by bringing in the best talent and culture fits!
Note
To make them easy to use, our templates are available in multiple file formats, including Microsoft Word for easy offline editing, OpenDocument (ODT or ODS) for compatibility with various word processors, and via Google Docs/Google Sheets for cloud-based sharing, editing, and collaboration.
These templates are fully editable and can be customized to your needs and requirements, making them ideal for projects of any nature, size, and complexity. In case of customizable drop-down menus, we have added a separate configuration sheet where you can add to, delete, or replace the categories we have used with ones better suited to your project, organization, or industry.
