Text sign showing Employee Referral Program. Conceptual photo employees recommend qualified friends relatives Megaphone loudspeaker speech bubbles important message speaking out loud.

Companies love it when their current employees provide referrals for candidates who they think could be a great outside fit for vacant positions. That's because studies have shown candidates who were referred by another employee are are often better hires than those who didn't receive such support. But for referrals to truly work they need to meet certain criteria, according to the Harvard Business Review.

The person providing the referral of a job candidate they know needs to be honest about what that person would be as a employee. The referrer also needs to be honest with the job candidate about how the company operates. If the person providing the reference can give both parties important information they couldn't otherwise get from an interview, it makes it more likely that a hire would be a good fit for both sides.

Some companies offer bonuses or rewards to employees who make a candidate referral that ultimately leads to a hire. However, for this process to work best, the person providing the referral must know the person they're referring well. In other words, they can't just be friends of friends or simply connections on social media.

For a referral program to truly work, businesses must ask certain vital questions of the referrer. For example, the person making the hire should know if the referrer and candidate had worked together before. They should also know how long the referrer and candidate have known each other and the nature of their relationship. In the end, the better the quality of the connection, the better the chances of the referral being strong.

Once an applicant has been hired, the onboarding process that follows must go well. Otherwise, the quality and length of the employment could leave much to be desired.