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Implementing an employee referral scheme – the fast track to top talent

Did you know that 88% of employers said that referrals are the number one source for above-average applicants? There are, of course, many fantastic ways to attract top talent, but none have quite as many benefits as an employee referral scheme. We have written about how powerful this method is before, and we believe that as the war for talent intensifies, all great companies should actively work on implementing an effective employee referral scheme.

What are the benefits of implementing an effective employee referral scheme?

Reduce the cost of hiring

If a company is working with a recruitment agency to source talent, the average cost of hiring can be between 15-20% of the employee’s annual salary, and up to 30% for hard to fill roles – and if you are recruiting a large number of employees, this figure can quickly become a financial burden. Employee referral schemes, however, can help reduce this figure by £2500 or more per employee, according to

Reduce the time to hire

Sourcing your company’s most valuable asset can not only be an expensive process, but a time-consuming one too. There’s no doubt that the quicker an employee can be onboarded and working to their full potential, the better. According to HR technologist, referred candidates are 55% faster to hire compared with employees sourced through career sites. This means it’s much quicker for employees to be integrated, and produce a return on investment for the company.

Reduce turnover rates

While it’s fantastic to secure top talent at a reduced cost and within a fraction of the time it usually takes, the most important aspect to consider when hiring is maintaining high retention levels. On average, the cost of replacing a single member of staff is more than £30,000, according to a recent report from Oxford Economics. Employing through referrals, however, can help you avoid this problem as team members who are referred tend to stay at their jobs longer than traditional hires.

How to introduce an employee referral programme

Studies show that on average, team members have 10 times as many connections as a company has social followers. So, by getting your people involved in an employee referral scheme, you can maximise your chances of attracting the valuable talent your company needs. However, implementing a successful referral programme doesn’t happen overnight, and takes strategic planning to ensure that it works effectively and is utilised to its full capacity. Here are some steps to help you think about where to begin.


Although an employee referral scheme sounds simple in practice, it does require careful planning. It is important to understand and identify your hiring needs before you begin, so that you can succinctly explain to your team what the company is looking for - creating a candidate persona can help you with this. Providing a detailed description will allow your team to find better matches and will create an overall smoother process. It is also important to spend time on planning rewards and how you will settle disputes, such as two employees referring the same person.


The design of an effective employee referral scheme can’t be overlooked. As you want your team to recommend as many people as possible, you must ensure that the process is quick and easy for them. Automating the process with a user-friendly system will allow you to do this, and will also save the hiring team from manually tracking all the recommendations. Having a system in place that will enable you to collect analytics will help you create a streamlined and organised process.


Offering perks and rewards for participating in the referral scheme may not be enough motivation for everyone. Therefore, you must find ways of promoting the programme to your people in an engaging and effective way which fits in with your company culture. Try not to overload people with too much information as this risks making the process sound more difficult than it is. Explain only the most important details, how it will benefit them and focus on exciting your employees to take part in this brand new project.


To keep employees motivated, and to encourage them to continue suggesting new referrals, it is important to maintain a healthy relationship and show them that they are valued. You can do this with personalised thank you messages, regardless of if their proposed candidate was hired or not. For those who successfully recommend prospective employees, it is important to compensate them with something that they will appreciate.

Why a dedicated internal talent acquisition team is best placed to implement a referral programme

An in-house talent acquisition team is best placed to plan your employee referral scheme, motivate your people to get involved and nurture a positive attitude. They will genuinely care about finding the right candidates that will be a good cultural fit, they will be able to authentically encourage team members to participate and will be empathetic regarding employee friendships and relationships. The way employee referral schemes are executed differs in each business, and it is important to have a bespoke system tailored with the company culture in mind for yours.

For more help with implementing an effective employee referral system at your firm, get in touch today.