External Referrals Playbook - A Step by Step Guide for Getting Started

Cait MacBrien
Director of Marketing at Drafted

A how-to guide for setting up your external referral program from start to finish

So you’re thinking of starting an external referral program, that’s awesome! External referrals are a great way to expand your talent pipeline and find new candidates in your company network. We’ll take you through how to set yourself up for success when starting your program and cover everything from getting executive buy-in to driving traffic to your page to collect referrals. But first, let’s get started with a brief history of referrals and the main difference between employee and external referral programs.

Part 1: Getting Started with External Referrals

What is a referral program and why do you need it?

A Brief History of Referrals 

Referrals have been a way to expand your network, reach like-minded people, and share great things since the dawn of time. Take off your business hat for a second and think about a restaurant you love - chances are you have told at least some of your friends, family, or coworkers about it. In fact, Julius Caesar in 55 B.C. signed a decree offering 300 sestertii to any soldier that recruited someone to join the Roman army. Referrals have been around forever! Another example, take a look at Gusto - if you refer a friend you both get a $100 Amazon gift card. The core concept of referral programs is to provide an incentive for sharing information.

A Brief History of Referrals 

Hiring and referrals also have a long standing relationship, recruiters have been using referrals to source candidates for quite some time. Chances are you already have some sort of employee incentive program to collect referrals, let’s take a look at the difference between employee and external referrals.

Employee Referrals vs. External Referrals 

Every company has an ecosystem of people that surround it or what we call your company network - chances are you probably have some sort of system or program in place to capitalize on it. This network is entirely unique to your company, it’s made up of employees, friends, family, former colleagues, fans, customers, partners, and everyone that has some sort of connection to your business. Here’s how to estimate how large your company network is. Let’s say your company has 100 employees. If each of them is connected to 500 people, then your company network size is 100 x 500 = 500,000. An employee referral program is designed to capitalize on that company network of 500,000 people and incentivize employees to refer their first degree connections to open roles at your company. Typically, companies offer a reward for a successful referral that results in a hire - this can be anything from a dinner for two, a gift card, or a monetary sum. Your definition of a successful hire can vary as well. A common practice is the new hire must remain at the company for a specified amount of time before the reward is paid out - particularly if you are offering a large incentive. Pretty simple, right?

Employee Referrals

External referrals take this concept one step further and cast an even wider net to capture people in your extended company network. Take those 500,000 people and double it! Triple it! You are now seeking out your company’s first degree connections and asking them to make referrals. Employee and external referral programs are not that different when you are creating their structure, but how you go about sharing each program will differ because you are targeting different audiences. 

When it comes to generating interest internally for your employee referral program you have a lot of opportunity and flexibility. You have a direct and constant line of communication with other employees at your company to spread the word about your referral program. You know their email, you see them in the break room, and you even know their boss! You essentially have a captive audience with a vested interest in your program - who doesn’t want a reward for helping out their company?! Generating interest for your external referral program will take a little leg work and strategy but you have a potential to literally double or triple your candidate pool.

Promoting Your External Referral Program

Taking your referral program to a larger audience will take some experimentation but the effort can be worth it. We’re talking about broadening your potential reach to an untapped audience to supplement some of your sourcing efforts and diversify your candidate pipeline. Now we’re going to put on our marketing hat for a minute - (tip: ask your marketing team for advice!) where do you reach the most external people? It’s probably through your company social media accounts, website, careers page, and via email. Putting a link to your external referral program in your email signature is an easy way to showcase your program to a wide audience. You’re probably emailing hundreds of people a day - coworkers, partners, vendors, and potential candidates. Your communication with potential candidates is a huge opportunity to reach more people, job seekers know other job seekers! The key to getting traction with your external referral program is all about access and education. Atlantic Health System kicked off their external referral program by adding links to their page to their social media accounts and careers page. For more examples of how you can promote your external referral program check out our help docs!

Up next, we’ll talk about how to make a case for building an external referral program, establishing an implementation plan and when to bring your plans to your team and company leaders.

Part 2: Get the Thumbs Up: Creating a case for executive and team buy-in

Education and Research

You know the importance of establishing a solid referral network to fill your pipeline with new and diverse candidates, but coworkers outside of your recruiting team might not know why you’re considering external referrals. You will need to showcase why external referrals are important, who you want to target, program goals, and alignment with both team and company initiatives.

Questions you should ask yourself to get started making your case:

  • What are the benchmark success metrics for external referral programs in your industry?
  • Can you find examples of successful programs in your industry?
  • What are the goals you want to achieve?
  • Why is an external referral program different from an employee referral program?
  • Are there any legal or data privacy issues that your compliance team will be concerned about?
  • How does this align with your recruiting team goals? Will this help with current pain points?
  • How does this align with your leadership goals?

Now we’ll look at where to find some of the information you need to arm yourself for a great presentation.

Where to begin your research:

  • Talk to your peers - who do you know that is in a similar position i.e. they want more referrals and are exploring solutions to make that happen. What tools are they exploring? How are they setting up their program?
  • Go to the experts - find a couple of companies that have a successful external referral program. How did they build it? If you can, talk to their team and ask for advice! [Link to examples of ext refs]
  • Use your network - ask your recruiting friends or recruiting Twitter to share their experiences and recommendations.
  • Give it a quick Google search - try things like, “Tips for kickstarting a NERP” or
  • “Tax process for external referrals”.
  • Ask Drafted! We have tons of content and help docs to help get you started.

Success Metric: Do you feel like you can answer any question that is thrown at you about external referrals? If not, you need to collect more information.

Get Team and Leadership Buy-In

Now that you have collected your arsenal of facts and data points to support your case, it’s time to bring it to your team. We encourage you to bring your plan to your recruiting team first to work out any lingering questions and get them on board before presenting to your leadership team.

How to get started with your team: 

  • Draw a clear image of how external referrals align with your department goals
  • Brainstorm to create a draft of the program execution
  • Who will be responsible for what?
  • What is the timeline?
  • Prepare for questions and ask questions of your team
  • Does anyone have experience with running an external referral program?
  • Is anyone willing to be the team champion for engagement from other departments?

Once you have fleshed out all the questions, concerns, and to-do’s with your department it’s time to take your plans to your leadership team. Leadership most likely will not shoot down a clear plan that helps reach the company’s goals so make sure you are ready to defend your plan.

Presenting to leadership:

  • Identify a potential champion within the leadership team
  • Meet with your champion before the presentation to give them a run down, help you identify gaps in your pitch, brainstorm a list of how external referrals will help with company-wide goals
  • Fix any gaps or areas that need more clarity
  • Present program overview, how it will help achieve company goals, and the draft of your execution plan
  • Ask for feedback and questions
  • What obstacles do they see a program like this?
  • Are you missing any key points of consideration?
  • If you don’t get a yes, ask what information they need to give you the approval to move forward.

Success Metric: Thumbs up from leadership to move forward. *Note: this may take a few tries if you get shot down the first time don’t get discouraged and iterate on your presentation to gather exactly the information they are looking for to give you a “yes”. 

Having a clear agenda and presentation of how to execute an external referral program will not only help get team and executive buy-in but also set you up for future success. Understanding the foundation of an external referral program as it relates to your goals and initiatives is the most important step to getting started. A well thought out and executed program will make all the difference. 

Up next, we’ll explore the logistics of setting up an external referral program to tackle goals, policies, prizes, and payouts.

Part 3: Logistics and Setting Up Your External Referral Program

In this section, we’ll go over the four major areas you need to consider when setting up your external referral program. We’ll address policy and payouts, setting goals (short and long term), recruiting process, and your launch plan. Be sure to work with your team, your champion, and the appropriate leadership members - getting a successful external referral program up and running is a team effort!

Policy, Prizes, and Payouts

  • Draft the policy - your policy should include: Definition of a successful referral i.e. in order to receive a payout does the referral need to be hired? If so, how long do they have to remain at the company for the referee to receive a payout? 
  • Identify referral rewards or prizes and establish how they are going to be paid out
  • Get approval from all teams that need to review the policy: Legal, Finance, HR
  • Finalize policy
  • Establish a clear system for identifying folks who deserve the prizes and who is in charge of paying them
  • There is ownership of how payments are going to get processed (i.e. who is getting what and when - who on your team will be responsible for that?)

Tip: Need a third party tool for easy payouts? Check out Reimbi for simple and fast payouts to referrers.

Success Metric: Have an outside person read through all of it to make sure what they understand is what is actually going to happen.


Think in terms of both short term and long term goals - breaking out your goals will help you not only plan for but achieve success with your program. Short term goals should focus around set up, program rollout, and engagement strategy. While long term goals will focus on Key Performance Indicators (KPIs) and net new candidates in your pipeline. 

The Basics

  • Write out goals of the program
  • Write out measurable KPIs associated with goals
  • Establish the timeframe to achieve initial results
  • Share goals and KPIs with appropriate teams and individuals

Short Term Goals

  • The initial framework set up
  • Establish a timeframe to have your program live
  • Plan to engage your employees and company network

Long Term Goals

  • Measurable KPIs
  • How many referrals do you want to get a week?
  • How many new candidates do you hope to gain each month from this initiative?
  • How do these KPIs relate to your overall company and hiring goals?

Success Metric: KPIs align directly with achieving your goals. KPIs are measurable in terms of goal success. (i.e. we want to see a 10% increase in the number of referrals we are receiving) 

Establish a Recruiting Process for Referrals 

  • Identify method for managing the referrals i.e. systems you will use to track referrals
  • If it’s a new program or method, implement a new program or method for managing referrals
  • Set expectations for managing these new referrals
  • Establish who will be responsible for follow up and management of referrals
  • Write out specifics for what is considered a “Qualified” referral for each role

Success Metric: You can track referrals from start to finish and are confident candidates won’t fall through the cracks. 

Create a Promotion Plan

Step 1: Brainstorm Strategy

  • Brainstorm messaging that will get people to make referrals ( i.e. Refer and get $500)
  • Identify an audience (or multiple audiences) based on the “Qualified” candidate profile from the Recruiting Process
  • Determine how you can reach them (i.e. email campaigns, shareable content, social media posts)

Step 2: Build Your Plan

  • Repeat step 1 until you have at least 3 referral avenues to kick start your program
  • Create campaigns to communicate your program
  • Make sure your strategy aligns with goals & KPIs

Sample External Referral Promotion Plans

Sample External Referral Promotion Plans
Sample External Referral Promotion Plans
Sample External Referral Promotion Plans

Tip: Get your marketing team involved! They are experts in generating interest 😊

Success Metric: You are ready to launch at the click of a button. You should be confident walking into a press conference about this external referrals program.

These four areas will help you structure your program and have a clear path forward to success. Remember you can’t expect your external referral program to work all the magic for you - it takes intentional setup, planning, and execution to achieve the desired results. In the final section, we will tackle executing your program and actually generating referrals! 

Part 4: Executing and Launching Your External Referral Program

So you know all about referrals and what they can do for your candidate pipeline. You got executive and team buy-in then set the foundation for what success looks like for your program. Now, it’s time to put on your marketing hat and get to work! Grab that handy launch plan from the last section and let’s rock and roll.


Pick a launch day for when you will announce your program to the world - this means you should have all your promotion materials ready and everyone should have their marching orders. Don’t be afraid to push your launch date back if things aren’t ready, you are more likely to make a big splash if all your promotion channels are working in tandem. 

Remember: The key to a successful external referral program is awareness and iteration. You should not expect to do one big splash during your launch and forget about it. You should continually test and promote your program to receive the results you want. 


Success Metric: Referrals are being submitted 

Referrals not coming in? Reevaluate the Launch Plan - where else can you reach your target audience? 

Now that your program is in the wild and you are collecting referrals - take a step back and evaluate what it looks like in action and analyze your results. Are the processes and systems put in place sufficient for your program to succeed? Are you driving the kind of referrals you want to see? Where are areas that need improvement? Below are gut check questions to make sure your team is handling referrals correctly and you are achieving your KPIs. 

Referrals In-Action

  • Are the new recruiting expectations understood and being practiced?
  • Are referrals being contacted by the recruiting team?
  • How are referrals moving through the hiring process?
  • Are there any areas where referrals are falling out of the hiring process?

Success Metric: Referrals convert to hires

Referrals not converting to hires? Reevaluate the Recruiting Process


  • Review initial goals and KPIs
  • How well did we do?
  • Were initial goals and KPIs a good measurement of success?
  • Do we need to identify new goals / KPIs?
  • Feedback from your direct team
  • Feedback from champion

Success Metric: Goals and KPIs have been reached or missed

Tip: If your answers to any of the above questions are not satisfactory it’s time for more iteration. 


  • Identify any changes or improvements based on post-launch analysis 
  • Identify measurable goals and KPIs associated with changes or improvements
  • Go back through the process with new goals and KPIs in consideration

Success Metrics: 

  1. Program goals are reached based on KPIs
  2. Leadership is satisfied with their decision to back this plan
  3. Recruiting team feels heard
  4. Recruiting team pain points have been alleviated in some way
  5. Communication up and down the chain of command improves
  6. External Referrals are a regular part of your recruiting process

Referral programs are an amazing tool to add to your sourcing toolbox and can be a powerful way to supplement some of your sourcing efforts. Every company is different so it is important to remember that this is not a one-size fits all approach. You should be prepared to hustle to get the result you want. Your company is surrounded by a network of people that are waiting to hear from you - use it to your advantage and go get them! As always feel free to reach out to our team at support@drafted.us or visit our help docs for more tips and tricks for setting yourself up for referral success.

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