Employee Referral: Definition & Policies

Instructor: Shawn Grimsley
If a friend ever arranged a job interview for you with his employer, your friend probably referred you through a referral program. In this lesson, you'll learn about employee referral programs and policies. A short quiz follows.

Definition

Employee referral is an employer policy or program that encourages current employees to refer job candidates as part of the employer's recruiting process. The technique is often used when the unemployment rate is low, such as during periods of high economic growth. If it is overused, there may be a problem with maintaining workplace diversity as employees' usually refer people with demographic characteristics similar to their own.

Common Policies

According to a study undertaken by Vanguard Resource Group, organizations that have been successful with utilizing employee referrals followed the following six policies:

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