Your best veteran hire knows ten more like them. That is the whole idea behind a referral program. Veterans run in tight networks. They served together, trained together, and deployed together. When one lands at a good company, the others want in.

Most companies leave that network on the table. They post a job, wait, and hope. Then they wonder why the pipeline is thin. A referral program flips that. It turns your current veteran employees into a sourcing channel that never sleeps.

This guide covers how to build one. We will go through why vet-to-vet referrals work, how to set the bonus, how to time the payout, and how to seed it through a veteran group inside your company. We will also cover how to keep it fair and how to measure if it actually works. The goal is a program a midsize company can run without a giant recruiting team.

Why do veteran referrals work better?

Referral hires already beat the average. The U.S. Bureau of Labor Statistics has studied this. Their research shows that referrals give employers more information about an applicant than they would have otherwise. More information means a better match. A better match means the person stays.

Now add the military layer on top. Veterans vouch carefully. A veteran will not refer someone who makes them look bad. They put their own name on the line. That filter happens before the resume ever hits your inbox.

There are a few reasons this works so well with veterans.

That last point matters for retention. A new veteran hire who knows someone on day one is less likely to leave. They have a friend at work. That bond keeps people around when the job gets hard.

The labor market makes this worth doing now. Veteran unemployment was 3.5 percent in 2025, per the BLS. That means strong veteran talent is working and not scanning job boards. A referral reaches the people who never apply on their own. That is the passive talent you cannot find any other way. For more on that, see our guide on how to reach passive veteran candidates.

How do you set up the referral program?

Start simple. A referral program does not need fancy software. It needs clear rules and a way to track who referred whom. Most midsize companies can run this in a spreadsheet or their existing HR system.

Here are the basic parts you need to define.

Who can refer and who can be referred

Decide who is eligible to make referrals. Most companies let any current employee refer. For a veteran-focused push, you can run a special tier. Veteran employees who refer other veterans earn a bigger bonus. That rewards the network you want to tap.

Then decide who can be referred. The candidate must be a real outside hire, not someone already in your pipeline. Set a rule. If the person already applied in the last 30 or 60 days, the referral does not count. This stops people from claiming credit for candidates you already had.

How big should the bonus be

The bonus needs to be worth the effort. Too small and nobody bothers. A few hundred dollars will not move people. A real referral bonus for a full-time role usually runs from $1,000 to $5,000. The number depends on the role and how hard it is to fill.

Hard-to-fill roles deserve more. A cleared cyber analyst or a senior logistics lead is worth a bigger bonus than an entry-level spot. Tie the dollar amount to how much that open seat costs you each month it stays empty.

Use tiers to reward the hard hires

A tiered bonus works better than one flat number. It lets you push more money toward the roles you struggle to fill. Here is a simple structure a midsize company can copy.

Keep the numbers public. Post them on the company intranet. People refer more when they know exactly what they earn.

When should you pay the referral bonus?

Payout timing is where most programs go wrong. Pay too early and you reward bad referrals. Pay too late and people lose faith and stop referring. The fix is to split the payout.

The best approach is two payments tied to time. Pay part when the new hire starts. Pay the rest after the new hire stays a set number of days. This rewards quality, not just a warm body in a seat.

The 90-day mark lines up with how veterans settle into a new job. Those first three months decide if the hire works out. A good onboarding plan helps here. See our 90-day onboarding plan for veteran employees for how to set that up.

One more rule. Pay the bonus on the next normal payroll run after each trigger. Do not make people chase it. Fast, clean payouts build trust. Slow payouts kill the whole program.

How do you seed it through a veteran group?

A referral program needs a starting push. The best place to start is a veteran group inside your company. If you have a veteran employee resource group, that group is your launch crew. They already gather, talk, and trust each other.

If you do not have one yet, build it first. A veteran group gives you a built-in audience for the program. It also gives veterans a reason to stay. Our guide on how to start a veteran employee resource group walks through the setup.

Here is how to seed it through the group. Hold a short kickoff meeting. Explain the bonus, the rules, and the open roles. Give them a simple link or form to send referrals. Then ask each member to think of two people they served with who would fit.

Keep the open roles in front of the group. Post a short list each month. Veterans cannot refer for jobs they do not know about. A monthly update keeps the pipeline full. The group also doubles as a mentorship base, which helps new hires land softly. See how to run a veteran mentorship program to pair referrers with the people they bring in.

How do you keep the program fair and legal?

A referral program can quietly narrow your applicant pool. Veterans tend to refer people like themselves. That is good for veteran hiring. But you still have to run a fair, open process for everyone. Referrals are one channel, not the only door.

Keep these rules in place to stay clean.

The DOL backs structured veteran hiring. Their Hire a Veteran employer page has tools and best practices for recruiting veterans the right way. A referral program fits inside a broader, fair hiring plan. It does not stand alone as your only source.

How do you measure referral quality and retention?

A referral program is only worth running if it produces good hires who stay. So you have to track it. Counting referrals is not enough. You need to know if those referrals turn into strong, long-term employees.

Track these numbers from day one. They tell you if the program works or just costs money.

That last point is gold. Some employees send better referrals than others. Find your top referrers. Thank them. Ask them for more. A handful of well-connected veterans can fill a big chunk of your pipeline.

Compare your referral hires against your other hires. Look at the stay rate. Look at the ratings. If referral hires stay longer and perform well, you have proof. That proof gets you budget to grow the program. Tie this back to your wider plan with our veteran recruiting strategy playbook.

Retention is the real prize. A referral hire who stays two years beats three hires who each leave in six months. Watch the stay rate above all else. For the deeper play on keeping these hires, read our guide on why veteran employees stay.

What about the candidates your team does not know yet?

A referral program taps the veterans your employees already know. That is powerful. But it has a ceiling. Your team only knows so many people. The network runs out eventually.

That is where a wider veteran talent source comes in. You want to pair referrals with a steady flow of fresh candidates. Then your pipeline never dries up. One feeds the other. A referral program also works best when you have a pipeline already moving. See how to build a veteran talent pipeline before reqs open.

This is what Best Military Resume does for employers. BMR adds over 1,000 new veteran profiles every month. The platform has built more than 60,000 resumes. That is a fresh, growing pool of veteran talent you can search when your referral network needs backup.

Use both together. Let your veteran employees refer the people they served with. Then reach into BMR's pool for the roles their network cannot fill. The two channels cover each other's gaps.

Putting it all together

A veteran referral program is one of the cheapest, strongest hiring moves a midsize company can make. Your current veteran hires already know the talent. You just need to give them a reason to bring those people in.

Start with clear rules. Set a real bonus, tiered by how hard the role is to fill. Split the payout so you reward hires who stay. Seed it through your veteran group and keep the open roles in front of them. Run it fair, with the same bar for everyone. Then measure the stay rate so you know it works.

Pair the program with a wider veteran talent source so the pipeline never runs dry. Your employees refer the people they trust. The outside pool fills the rest. Together they build a hiring engine that keeps producing.

Ready to back up your referral network with a deep pool of veteran talent? Reach out to access BMR's veteran talent pool and start sourcing the candidates your team cannot reach on their own.