Employee Referral
The Fast Track to a New Job:

by Susan P. Joyce

Susan P Joyce Headshot
Being recommended to the employer by a current employee is usually the best and fastest way to a new job. Known as an employee referral, a referred candidate is five times more likely to be hired than a candidate who was not referred. The best news is that everyone usually wins in the referral process! The referred candidate gets a new job, the employer hires a new employee who is more likely to succeed in their job than a candidate who is not referred (with a lower cost of hire expense), and the employee who does the referral receives a financial reward from the employer.

Very important: Understanding how the employer's employee referral programs (also known as ERP) works is the key to success, and the rules vary widely! Applying too soon can make the candidate ineligible for the program, reducing their chances of getting hired.

How Employee Referral Programs Work

Employee referral programs typically reward employees for referring someone outside the organization who is hired for a job. When/if that person is hired and performs acceptably in the job for at least 90 days (usually), the referring employee usually receives a financial reward. Employees are usually interested in finding good candidates to refer because they typically receive a substantial financial benefit for the referral. The reward paid to the employee can range from a few hundred to a few thousand dollars, typically spread over several months to a year.

The reward may be made when the referred candidate applies for a job, but more often it is made when the referred candidate has been hired and has performed well for several months. To incentivize the referring employee to help their referral to succeed, payments may be made when the person is hired, after the person has been in the job for three to six months, and then, occasionally, when the referral has been successfully employed for a year.

Referral Timing Is Very Important

The best time for the employee and the job seeker to connect is before the job seeker has applied for the specific job (or, sometimes, for any job with that employer), not after the application has been made. A referral at the wrong time, according to the employer's rules (see below), may impact whether or not the referred candidate receive recognition (and favorable treatment) as a referred candidate. Referral timing also typically impacts whether or not the employee making the referral qualifies for a reward from the employer. With automated applicant tracking systems, employers can easily track the timing of both application and referral, and genuine referrals may be disqualified if the timing seems not to be in compliance with the program's rules.Employee referral programs operate two main ways:

1. Referral as part of the automated job application.

When completing an online application for the job, the job candidate provides the name and contact information of the employee making the referral. There will probably be a section specifically for employee referrals (usually in the how-did-you-find-out-about-this-job section). Or, the referring employee's name and contact information may be added into another section.

2. Referral form submitted by the referring employee.

The employee who is making the referral submits a form naming the applicant. In many cases, they don't need to specify the job being sought. After the form is accepted, the applicant is notified of the referral, and invited to look at the jobs and apply. Sometimes these two methods combine. The employee submits a form, and the applicant provides the name in the application form. Occasionally, the employee submits a form after the applicant has applied. The rules for each employer vary, so it is best to understand them before initiating the process. In my research, I discovered several programs which disqualified someone from being considered as a referred if they had ever applied for a job with that employer.

Exchange Essential Information

Having correct and current information is very important to the success of the process! So, be exchanging information at the start of the process is essential.

The job applicant should be sure to have the following information about the referring employee:

  • Employee name at work (the applicant may know the employee as Debbi, but at work everyone calls her Debra)
  • Employee work email address
  • Employee department/division or office
  • Employee location
  • Employee job title
  • Employee work phone number

The employee should have this information:

  • Applicant's name (as used on job applications, resumes, LinkedIn profile, etc.)
  • Applicant's personal (not work!) email address. Applicant's personal (not work!) phone number
  • A copy of the applicant's resume

Both parties need to have the appropriate information needed to successfully complete the process. This ensures that the applicant receives the advantage of being referred and the employee receives the appropriate reward.

Know the Rules for Each Target Employer!

Referral programs typically have rules about when and how the employee earns the referral fee. Usually, the referral should happen before the job seeker applies for the job, but it may be acceptable during the job application process, as indicated above. These days, many employers publish their ERP program requirements on the website, visible to the public. So, checking the ERP rules on the employer's website -- if available -- before reaching out to an employee is a very smart idea. The problems:

The timing of the referral can be a deal breaker.

For some employers, an applicant who applies before the employee has submitted a referral form disqualifies the applicant as a referral. For others, the referral form can be submitted after the person has applied. Many don't require a referral form at all -- simply including the employee's name and phone number on the application is sufficient "proof" of the referral. Best to know before starting the process.

Not every employee can make a referral.

A hiring manager cannot typically refer someone, especially not for their own department. People in HR and recruiting are also usually not able to refer a candidate, either.

Not every job may qualify for the reward.

Typically, the jobs that are in the ERP - or pay the best reward - are the jobs that are the hardest to fill, like jobs that are senior or jobs that are hard to fill because qualified candidates are scarce. So, not every job may be included.

Not every location may qualify for the reward.

Some locations have a plentiful supply of job candidates, which means no - or a minimal - reward is offered by the employer. So, location and job matter. Life is never simple these days. To be the referred candidate, be sure to understand the rules each employer has for their ERP program.

About the Author

Susan P. Joyce is Editor/Publisher of Job-Hunt.org and WorkCoachCafe. com. She is a Visiting Scholar at the MIT Sloan School of Business, and is the author of How to Find a Job Using Craigslist: Your Guide to Safe and Effective Job Search on Craigslist. She is co-editor of New Year, New Job! Her background includes service in military intelligence in the United States Marine Corps.

Contact her as follows: