Employee Referral Program Policy Template
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Table of Contents
The right talent is a powerful source for the company’s growth. Companies need to always look for the best candidates to lead business growth. An employee referral program policy is needed as it provides a clear and structured framework for employees to recommend candidates during the hiring process. The current employees are given incentives in the form of rewards for successful hires.
A clear employee referral policy is important, as it is helpful in hiring suitable candidates. This referral policy for employees is aimed at providing an opportunity for them to refer trustworthy candidates within the organization. This policy template can also be customized according to an organization’s needs.
Employee Referral Program Policy Should Include
- Employees are allowed to refer individuals who fit the given job description to the organization.
- Referred candidate will have to go through the same recruitment process as anyone else.
- The employee’s involvement is limited to the submission of the resume. He is not involved in any other process.
- The rules and the procedure for employee referral.
- Guidelines for and calculation of the referral bonus points.
- Exceptions to the employee referral policy.
Employee Referral Program Policy Sample

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An employee referral policy is considered one of the most reliable sources of recruiting new talent. ‘Name of the Company’ believes that the current employees can most precisely understand the nature and suitability of the ideal candidates that we require. This is, therefore, a guide for the employees when they find a suitable candidate and want to refer them.
Purpose
This employee referral program policy emphasises rewarding the employees who help identify and refer competent talent in order to meet our resource requirements at an optimum cost.
Scope
The employee referral scheme policy covers all employees of ‘Name of the Company’, except Functional Heads, HODs, HR team, and those involved in the recruitment process of the candidate or who can influence the recruitment of the candidate.
Guidelines
Employees may refer individuals who fit the specifications given in job descriptions for the notified vacancies. The referred candidate will undergo the regular recruitment procedure as per the norms, and selection will be considered only if they meet the requirements of the existing vacancy. An employee’s involvement is limited only to the submission of the resume and will not in any way try to influence the selection process or compensation finalization of the candidate.
Rules and Procedure
- HR will notify vacancies available under the employee referral scheme through the HR System.
- Candidates can be referred only against the notified vacancies.
- The candidate referred should strictly meet the criteria as per the vacancy notified.
- Employees referring to the candidates should obtain the candidate’s consent before forwarding the candidate’s resume to the HR Department.
- The employee will be eligible to receive the bonus points only when the referred candidate joins the company.
- The candidate should successfully complete three consecutive months of service with the company.
- In case the referred candidate is taken on a project / assignment-based fixed-term contract for a minimum period of one year, which is likely to transition into regular employment, bonus points will be paid after the referred candidate has successfully completed training.
- The employee referring to the candidate will not be a part of the selection process.
- If the candidate has contacted the company through another platform, they will not be considered as a referred candidate.
- In case the same resume is received from more than one employee, the date and time of receipt of the resume will be considered.
- In case the resume exists in the data bank, the employee will not be eligible for a referral bonus.
- The selection of ex-employees who have left the company will not attract any bonus.
- No benefits would be credited for referring fresher’s & campus hires and candidates with less than 12 months of relevant experience.
Referral Bonus Points
Level | Referred For Designation | Referral Bonus Points* |
---|---|---|
3 | Executive; Officer | ‘Number of points’ |
2 | Assistant Manager; Deputy Manager; Manager | ‘Number of points’ |
1 | Sr. Manager; Dy. General Manager; Asst. General Manager | ‘Number of points’ |
* One referral bonus point is equivalent to ‘Amount’ Indian Rupee/s.
Exception
The above terms are subject to modification/ amendments/ alterations/ by the Management at any time on Business/ Statutory requirements.
In case of any doubt, the interpretation of the above terms by the Head HR shall be final. No exceptions shall be permitted without specific written approval from the Head of HR.
Great hires start with your referral. Use our employee recommendation letter to introduce candidates with confidence
Final Wrap Up
An employee referral program policy template provides a structured framework to motivate current employees to refer quality candidates. This policy helps simplify the recruitment process while also rewarding employees for successful hires. Using a formal and ready-to-use referral template, like those available at factoHR, helps implement transparent and efficient referral programs. These are lined with business objectives to support talent acquisition and build a stronger workforce.
Why does HR Use Employee Referral Policy?
HR professionals use an employee referral policy for:
- Hire better-quality candidates
- Fast and cost-effective option
- Higher productivity
- Lower turnover
- Built a strong company culture
What is the Importance of a Referral Program Policy?
A referral policy is important for organizations, as it lowers hiring costs and reduces the time-to-hire ratio. HR professionals can improve the quality and retention of hires as well as boost employee morale by involving current staff in the recruitment process.
Disclaimer
This Employee Referral Policy template provides general guidelines. Organizations are advised to customize it in accordance with applicable legal requirements.