An employee referral is a candidate put forward by a current employee who knows them, rather than sourced or applying cold. Many organisations run a formal referral scheme, paying the referring employee a bonus if the candidate is hired and stays a minimum period.
What it means
Referred candidates often have a higher success rate than other channels, since the referring employee has an informal sense of fit before the candidate even applies, and the existing employee has a personal stake in the outcome working out.
Where it fits in
A referral bonus paid to the referring employee runs through payroll once the hire's qualifying period is met, making the referral scheme one of the few recruiting tools with a direct downstream payroll transaction of its own.
Key rules
- A candidate recommended by a current employee, not sourced cold.
- Often incentivised with a referral bonus tied to a qualifying period.
- Tends to have a higher hire success rate than other channels.
- The referral bonus itself is a payroll transaction once it qualifies.
