Tips for writing an employee referral policy

Updated 2 months ago by Olivia Clark

Starting a new referral program can be exciting, but figuring out some of the logistics can seem overwhelming. To help you get your best foot forward, we've created a guide to help you draft your employee referral policy.

👉 Here is a sample policy we created based on some of the most frequently used terms and conditions. 👈

Step 1: Start with the basics

Before diving into the intricacies, you'll want to establish the basics:

  • Who is (and is not) an eligible participant?
  • Who is (and is not) an eligible candidate?
  • What is the reward?
  • When does the reward get paid out?
  • How does the reward get paid out?
Tip: Having a referral bonus moves the needle even when it isn't a big, flashy, cash prize. Something as simple as dinner with the CEO or a $20 GrubHub gift card are typically more effective than no prize at all.
Step 2: Consider the edge cases
  • What happens if a candidate is referred multiple times by different people? Who receives the reward?
  • If the candidate also applied to the role directly, is the referrer still eligible for the reward?
Step 3: Iron out the details

This is the point where you may need to call in assistance from your legal and/or finance team. Some of these details may include, but are not limited to:

  • What is the payment process?
  • What steps does the participant need to take to get paid? What information will they need to provide?
  • Are rewards taxable? Who is responsible for those taxes?
  • If someone refers 10 people and they all get hired, does that individual receive 10 rewards?
Step 4: Write it all out

If you haven't already started drafting your policy, now is a good time to get it all down in one place. Make sure it is clear and concise. Formatting should look something like this

  1. Introduction / Summary
  2. Eligibility Requirements
  3. How to Submit a Referral
  4. Rules & Terms
  5. Additional Notes
Step 5: Reserve your right to edit the policy

At some point, you may want to change your policy. Make sure you add a statement in your policy that reserves your right to edit or discontinue the program at any time.

Step 6: Have fresh eyes review your work

Before launch, you'll want someone (or multiple people) to review your policy to ensure it makes sense to the average person and there are no gaps or loopholes. Your policy should balance being simple and easy to understand while also covering all your bases.

Step 7: Iterate and add final edits

After fresh eyes review your work, you'll want to isolate time to read through your policy again. Add any edits or iterations that have come up in the review process.

Step 7: Add your policy to Drafted

To add your policy to Drafted, go to Settings > Edit Profile. Scroll to where it says "Internal Referral Policy" and add a URL to your full policy. This will allow visitors to your public referral page to review your policy before submitting a referral.

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