Employee Referral Programs and Hard Decisions

Employee Referral Programs and Hard Decisions

I know what it is like. You have a job you love with a company that really takes care of you. Your friend wants a job with a company that really takes care of him. Your employer is recruiting and they may even have an attractive employee referral program.


It seems like a match made in heaven. But before you call yourself “Cupid” and reach for your bow and arrow, you should think long and hard about whether this is the right decision for you. If you are thinking about submitting your mate’s details for a job with your employer, keep this advice in mind.

Protecting your reputation is Priority Number 1.

One thing about making recommendations is that it will ALWAYS reflect back on you. Obviously this can work in your favour but you should keep in mind that it could be detrimental to your reputation. Please consider this before you engage in any employee referral programs.

Maybe you think I’m being dramatic but consider this. Your friend gets a job with your employer and they promise you that they are going to do their best and make a good impression. They do. For the first few months or so they are an excellent employee but after that things start to go downhill. They start arriving late, maybe they’re not completing their work on time and your boss starts to notice cracks in their results.

Now in reality, this is not your fault. 

I am going to go ahead and assume that your boss followed appropriate recruitment processes, interviewing and reference checking your friend before offering them a job. So their hiring decision was not based solely on your recommendation. Unfortunately though, this can be quickly forgotten if something goes wrong.

My husband’s boss sums this up pretty well. The first question he asks when presented with a referral is “Are you willing to put your ass on the line for this guy?” Your boss may not be quite as…. articulate… but this is certainly a question that you should be asking yourself!

If your answer is no, that doesn’t mean that you can’t participate in the employee referral program. It just means that you need to be more cautious in doing so. I would start by making it clear that you are not vouching for the person and that you would like your employer to consider their application as though it has been received through standard channels.

Should you put your reputation on the line to help your friend get a job? It is a hard decision!

Click to Tweet

Investigate employee referral PROGRAMS, but don't get greedy. 

Some employers offer bonuses to their employees for finding and referring successful candidates. Sometimes these employee referral programs can be incredibly lucrative and can be a great way of making some extra money. Whilst you absolutely need to consider all of the other points in this post, if you do know some great candidates and you are working in an industry that has a candidate short market, referral bonuses could be quite the cash cow.

The are a few important things for you to be aware of when it comes to employee referral program bonuses:

  • You should always investigate referral bonuses BEFORE making referrals. Because firstly, you don’t want to miss out and secondly, some employers require the referrer’s information as part of their recruitment and induction workflow.
  • Referral bonuses don’t always take the form of cash. You could receive gift vouchers, reward points or even physical prizes.
  • Some employee referral bonuses are delayed. Depending on your employer’s referral structure, you could receive the entire bonus up at the start, upon completion of your friend’s probation period or on the basis of specific achievements. Payments are sometimes staggered, so you might get half up front and the other half at a specified point down the track.
  • Your employer may not have a referral bonus structure in place, but that doesn’t mean they wouldn’t be open to making some sort of arrangement. Be sure to ask before you make the referral.

In summary, it pays (literally) to be aware of any possible employee referral bonuses BUT you don’t want to just think about the money, honey!

Consider the worst case scenario.

You and your friend get along like a house on fire, but do you really want to work with them? I mean, if you spend all day with your friend at work, you might be less likely to want to socialise in your free time. Working with friends can be so much fun but I have also seen friendships strained and broken down because of work.

The last team that I managed was built through friendships. One employee referred the next, who referred the next and so on. This was a deliberate move to create a tight-knit team that could work hard and celebrate their successes together. And the team itself was a huge success. What we created was not just a tight-knit team, but a family unit. We worked together, we played together, we spent Christmas Day together and most importantly, we achieved fantastic results.

Like brothers and sisters though, teammates bickered and fought. Things could get nasty. There were tears before bedtime. At times, it could be a difficult team to manage and a difficult team to be a part of. Do I regret it? Absolutely not. I would do it again without a doubt.

My point is that you have to ask yourself:

  • If my friendship with this person went sour, would I be prepared for it?
  • How would I feel if I lost this friendship as a result of working together?
  • Would I be able to maintain my professionalism and stop this friendship from impacting on my career?

It sounds awfully negative, but you should think of the worst case scenario and decide whether or not it is worth it. It it is, then go for it! Reap the benefits of your employee referral program! I truly hope it is a rewarding experience for you, like it was for me. If not, then no harm done. I am sure your friend will understand that you value your friendship too much to allow it to fall prey to workplace politics.

Is working with your friend worth risking your friendship?Consider the worst case scenario.

Click to Tweet

Have the critical conversations up front. 

If you have decided to take the plunge and refer your friend to an opportunity at your company, you should go into it as prepared as possible. You have already thought through the worst case scenario, asked yourself if it is worth it and you have made your decision. Now it is time to communicate all of that with your mate! I am not suggesting anything too formal (no need to sign a contract in blood!) but you should get together and have a chat about how you might manage things if an issue arose. These are the types of things you could discuss:

  • How will we manage working together if we have a falling out, outside of the office?
  • How will we manage our friendship if we have a disagreement at work?
  • What will happen if one of us sees the other person doing something wrong or against company values?
  • What will we do if one of us gets fired or made redundant?
  • Should we have a plan in case we just need a bit of space from one another?
  • Are there any other rules we should put in place to protect ourselves and our feelings?

In the team I talked about above, I had two female team members who were (and still are) extremely close friends. They had worked together previously, played sport together, socialised on the weekends – you get what I mean? They were besties. Their friendship was put under a huge amount of strain whilst working together and thankfully they managed to salvage it – but most of their issues could have been avoided in the first place if they had these critical conversations up front.

So what are your thoughts? 

Do you think you will jump right in and participate in an employee referral program? Perhaps you have an interesting story to tell about friends working together? I would love to hear it! Drop me a note in the comments section!


About the Author


Bec McFarland is an experienced HR practitioner, manager, career coach and the creator of Pop Your Career. She delights in sharing practical, straight to the point career advice, spending time with her family and eating Mexican food.

Check Out Our Latest Articles

What are employers for your screening job candidates?
Two women standing together looking down at work on a desk. Text overlays the image reading "what are hard skills and how can they help your career?"