A Guide To Adopting Employee Referral Bonus Policy

employee referral bonus policy

Are you willing to hire top talents in the most cost-effective way? 


You can introduce an employee referral bonus policy program in your organisation. Instead of making substantial investments in posting job ads on multiple boards, you can boost hiring efforts with your co-workers’ help. Research says companies can expand their talent pool 10 times by recruiting through employees’ referrals. Additionally, you can motivate your existing employees to refer to top talents in their network by rewarding them


This article guides you on making an employee referral bonus policy and shares its benefits in your organisation. 

What is an Employee Referral Bonus Policy?

Employee referral refers to an organisation’s talent acquisition approach where your existing employee recommends a potential candidate for your vacancy. These candidates usually don’t follow a traditional application process; instead, they submit resumes through your employees. The recruitment team reviews the applications to check the candidates’ suitability and sends them job offers upon selection. 


It is similar to a client referral policy where your present clients act like brand advocates and refer you to their network to increase brand awareness and sales. These clients often receive some benefits from the company; thus, they actively participate in referral programs. 


Similarly, you must introduce incentivising policies to engage your employees in employee referral programs. Therefore, an employee referral bonus policy refers to a structured way you request and receive employee referrals and, in return, pay them a bonus on successful hiring.

Benefits of an Employee Referral Bonus Policy

Here are a few reasons if you are wondering why to entertain an employee referral on job application. 

Faster Recruitment Process

When your co-workers refer someone from their network, these candidates will likely meet the minimum job requirements. Therefore, you can skip the advertising and resume screening process and instead interview them. Research says 45% of hires through referrals stay longer than four years compared to 25% of hires through job boards.

Reduced Recruitment Cost

Employee referral bonus policy encourages your employees to choose the top talents. Therefore, you can move faster through the recruitment process and save money on related expenses. 


For example, you don’t need to pay job boards to advertise your vacancy or compromise with product and service quality due to a lack of employees. 

Better Culture Fit

When candidates come through your existing employees, they know your business culture. It means if they are applying for your positions, they already like your culture and are ready to fit in it. The new hires have at least one person familiar with the company, which gives them the confidence to work efficiently and thus improves your retention rate

Recruit Hard-to-Fill Roles 

Recruiters face difficulty fulfilling hard-to-fill roles, especially those on tight budgets and schedules. However, your employees’ network may help you find the best-fit candidates for your openings. 

Employee Referral Bonus Policy Sample

In this section, let us discuss an example to understand the employee referral bonus policy better:


Here’s a sample employee referral programme policy for ABC organisation. You can follow this template to create one for yourself and customise it per your needs and requirements. However, it is best to discuss with your HR department or legal team to create a policy that complies with the local labour laws and guidelines.


The employee referral bonus policy encourages all employees working in ABC organisation to refer qualified candidates in their network for open positions within the company. It aims to 


  1. attract top talents
  2. improve our quality of hire 
  3. foster employee engagement by incentivising referrals

Referrer Eligibility

All the regular full-time and part-time employees qualify to participate in the employee referral bonus policy, except for the recruiters or hiring managers and senior executives (e.g., CEO and Managing Director). Former employees, consultants, vendors, and contractors are also eligible for the program.

Referral Bonus  

We will give out [2000 dirhams] rewards to every referrer if we hire their candidates. The bonus may increase if the referred candidate suits the hard-to-fill roles. 

Referral Bonus Payment Criteria 

According to our employee referral programme guidelines, bonus payments will be made to employees under the following two criteria:


  • The referee must be employed and not serving probation or a notice period during the bonus payment
  • Referred applicants must be enrolled on ABC’s payroll, showing no signs of resigning or not serving the notice period during the period.

Referral Criteria

  1. All the employees must submit their referrals through the designated platform or follow the process outlined by the HR department.
  2. Every referral must include accurate and complete candidate information, including their full name, qualifications, relevant experience, and contact details.
  3. If multiple employees refer the same candidate, the referral received first will be rewarded.
  4. There is no limit on the number of referrals an employee can make.
  5. Referrers will also receive rewards even if the candidate is hired in the future or for another position.

Candidate Eligibility

All the candidates being referred must meet the required qualifications and relevant experience for the open position, as mentioned in our job description. They should not be current employees or candidates already applying for the same role through other channels. 

Referral Process

  1. All employees can identify their potential candidates for our open positions.
  2. Employee submits referrals through the employee referral portal, accessible by our company employees.
  3. Our recruiting and HR managers will review the referrals and determine the candidates’ eligibility for the position.
  4. We will contact the shortlisted candidates and schedule an interview
  5. If the referrals are selected, and they accept our job offer, the employee referring them will be notified
  6. The referring employee will receive the bonus payment after the new hire completes their probation period 
  7. The referral bonus will be remunerated in accordance with ABC’s regular payroll schedule following the successful completion of the referred candidate’s probation period. All applicable taxes and deductions apply to it.

Program Guidelines

  1. ABC reserves the right to modify or terminate the employee referral programme policy at any time, with or without notice.
  2. The recruitment or HR department will solely administer the whole program 
  3. Any attempt to manipulate or abuse our employee referral bonus policy may result in disqualification from the program.
  4. All referrals made before the launch of our program may be considered eligible at the discretion of ABC.


ABC encourages all employees to refer potential candidates for our open positions who align with the company’s values and culture. Thank you for your participation in the employee referral bonus policy program. 

How 6 Pence Helps

When attempting to hire a new talent in a company, you can implement an employee referral bonus policy program. It allows you to recruit the best-fit candidates from your employees’ professional network quickly. Therefore, it saves your money, reduces the hiring timeline, and allows you to find employees for hard-to-fill roles smoothly. 


Another great way of recruiting top talents is getting assistance from a reputable staffing agency. We at 6 Pence offer you the best staffing and HR solution services in Oman, Iraq, Bahrain, and Dubai, ensuring you find the top talents in the market.


For further details, connect with us today!


Also Read : A Step-by-Step Guide to the Disciplinary Procedure in HRM

Frequently Asked Questions 

What is the employee referral policy?

The employee referral policy is a recruiting strategy used for organisations where recruiters encourage current employees through rewards to refer potential candidates for their job openings.

How do you handle employee referrals? 

Recruiters and the HR department of your organisation can screen the referrals’ resumes to ensure their suitability for the job, speak to the shortlisted candidates, and schedule interviews. The selected candidates then receive a job offer, and if they accept it, your hiring process is successful. 

What is the standard employee referral bonus?

The standard monetary employee referral bonus ranges from USD 250 to USD 25,000, depending on the seniority level of the openings and the current demand for the position. This is a global standard rate.

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