Employee Referral Policy in IT Companies


Employee referral program have been going around from many years. This is just another way of recruiting process. In IT companies, a large percentage of recruitment is done through Employee referral.  Employee referrals make the hiring process easy and in a better way to recruit. Employee referral programs give some monetary benefit to their employee for referring employee. This is called

Employee Referral Bonus

IT companies encourages employees to refer friends and former colleagues who bring a combination of top quality skills and abilities to meet the needs of the company’s results-oriented environment.
These are the general policies of an Employee Referral process.

Eligibility:: At the time of referral, employee must be on the permanent payroll of that company

Payment: Payment for eligible referral bonuses will be made once the successful candidate has completed one month. Some companies like Accenture give the referral bonus once the candidate completes one month. Other companies give the referral bonus in phases. They will disburse some amount once the candidate joins and give rest of the amount in 2 months.

Referral Bonus :
These Programs have financial incentives for employees who make referrals in a better way. Bonus is decided by the company standards and procedure to their employees. Many times an amount of small incentive is provided for referred candidate who at least ends up with interview. Rewards are contingent on referred candidate being hired or will be remained with the company for a specific period of time.

Below are not eligible for referral bonus:

  • A member of the India Leadership Team
  • Director level and above
  • A member of the Human Resources staff
  • A manager or supervisor, if you are directly involved in the hiring decision for your own organization



Every company defines it’s own policies for the employee referral but these tips will help to frame an effective policy.

Timely Communicating:

Communication is easier today. With many efficient ways to reach out for candidate’s response instant, if the referral is going slow it shouldn’t be an issue. But sometimes slow response fails the employee referral program. Few points are below to refer

  • Be quick enough to generate response in max of fewer hours.
  • Put them in fast lane for processing and shortlisting Have a deadline time to go on with this process quickly.
  • Allow the candidates whom you shortlist to pick their own time for interview and give them some specific time to at least prepare themselves.

 Allow more number of employees to participate in this program:

This practice can generate new talent in an organization. Right people can be selected through this. It’s not about filling a slot in a company; it’s about hiring a right person for a right slot. Ask managers and recruiters to come out of their own zone from the company execution, let them use their own connection. Clients, retired employees can be encouraged to participate.

 Good plans for Rewards

  • Other than financial compensation give an advance reward like trip and prizes
  • Concentrate on avoiding the importance of good talent to their employees and effectively communicate. Provide good job security for both the motivators in company.
  • Encourage good referral & this can be done in so many ways, social sites, personalized thank you or a special lunch from the company site it can create even branding to the company.
  • Reward all quality candidates, not only the ones that are hired-on.
  • Building and encouraging this program creates a pipeline. To generate flow of talent, you have to encourage the use of the program and keep people in advanced organization programs.
  • Ask employees to generate leads from outside.
  • Referral cards and events are really few great ways to generate visibility and interaction.
  • Bring new things to encourage the employees on this program.


Educate Employee: Try to educate with the benefits and the mode of growth by this program which can help him future.

Making a policy is easier but executing a policy for the benefit of the company is a difficult task. Make sure that it has to be fair policy. Many a times, an employee refers a good candidate but the referral bonus is not shared with the deserving employee. The HR says that the profile was a duplicate and a “Preferred Vendor” takes the advantage of the referral. We have come across many instances where an employee referral profile is not taken forward. The nexus between the HR and Placement consultant should not be encouraged and the Employee should get the benefit of fair play.

Relevant Articles

Advantages of a Good Employee Referral Programme

Blog Author

Nida is a graduate in Marketing Domain. She is currently working as HR executive in Joblagao.com ,  She is passionate about management events, loves travelling and carries an enthusiasm to live life to the extreme of success.

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