If you want to hire the best talent for your organization, employee referrals are the way to go. Not only are they faster and more effective than traditional recruitment methods, they also cost less.
But relying solely on referrals can be tricky. Employees may not always be motivated enough to refer top candidates. To strike the right balance and ensure high-quality recruits, your organization needs to incentivize and reward referrals in a way that works for everyone.
What Is an Employee Referral Incentive?
An employee referral incentive is a reward employers offer their employees for referring qualified candidates for job openings within the company. The reward could be monetary, such as a bonus, or it could be in the form of a non-monetary benefit, such as extra vacation time.
The main purpose of employee referral rewards is to encourage existing employees to tap into their networks to find potential hires, saving the company time and resources in their recruitment efforts.
Benefits of an Employee Referral Incentive
Implementing an employee referral bonus program can significantly impact your recruiting efforts. Here are some benefits of offering employee referral bonuses:
Referred candidates have a higher chance of being a good fit for the company culture and job requirements. A successful employee referral program can lead to faster onboarding and improved job satisfaction for the new hire while reducing recruitment costs.
More Effective Recruitment
Referrals can exponentially expand your pool of candidates for job openings. Not only do they bring in high-quality candidates, but they can also bring in passive candidates who may have been unaware of the job opening otherwise. This can save recruiters valuable time and resources when it comes to job posting and sourcing.
Referral programs can save costs on advertisement expenses, as well as the costs associated with high turnover rates. Since referred employees have already been vetted by the referring employee, they are less likely to leave the company. This leads to more sustainable staffing and less need for onboarding and training newer employees.
Shortens the Hiring Timeline
By leveraging your company’s employee referral network, the hiring process can be expedited. Since referred candidates have already been pre-screened, they are more likely to successfully pass through the interview stage and receive an offer.
This can significantly shorten the time-to-hire, saving recruiters and hiring managers valuable time and resources.
Employee Referral Rewards Ideas
Employee referrals can be a great way to bring quality candidates to your company. However, incentivizing and rewarding employees can help to increase the number of referrals.
Here are some effective employee referral rewards ideas that you can implement:
One effective way to incentivize employees to make referrals is by offering tiered rewards that increase in value with the number of successful referrals.
For example, after the first successful referral, an employee could receive a $50 gift card, and for the second successful referral, the reward could be a $100 gift card, a higher amount or even a more premium gift card, like a spa day voucher. The size or type of reward can escalate based on the number of successful referrals made by the employee.
Raffle Referral Rewards
Another way to incentivize employees is through a raffle referral rewards program. You can format it so that for every referral an employee makes, they will receive one entry into a monthly or quarterly raffle drawing. The prize for the raffle can vary from a large gift card to a unique experience, like tickets for sports games or Broadway shows.
You could also make the raffle more fun and interactive by making it a surprise event, a team-building opportunity or a celebration. You could announce the winner during a team meeting, provide food and refreshments, and create more buzz around the event.
Vacation Referral Rewards
Another employee referral rewards idea is to offer vacation referral rewards that provide employees with a vacation experience of their choosing. This approach could help you attract top candidates to the company, especially those who are looking for a better work-life balance.
Your employees could receive a gift card to a travel agency to plan their dream vacation and the size or type of the reward could increase based on the number of successful referrals made by the employee.
While vacation referral rewards can be more expensive than other reward options, they offer a unique and valued experience that can motivate employees to make referrals.
Custom Referral Rewards
Lastly, custom referral rewards can also be an excellent way to incentivize your employees. Custom referral rewards provide employees with the freedom to choose a reward based on their personal interests or hobbies. For example, an employee that loves music can choose tickets to a concert, while an employee that loves art could pick an art class or local museum tickets.
Custom referral rewards show that you value your employee connections and are willing to provide personalized incentives based on their interests. This approach can help build employee morale and boost company pride, which could make it easier to recruit high-caliber candidates.
Start Attracting More Qualified Talent With The Help of Referral Programs
Employee referral rewards can be a great way to incentivize employees and attract top candidates for your company.
From tiered rewards that increase in value with the number of successful referrals to raffle reward programs, vacation referral incentives, or custom referral rewards tailored to individual interests, there are plenty of creative ways you can show appreciation while encouraging more referrals for your business.
Author Bio: Cindy Mielke is passionate about the incentive industry. In addition to her role as Vice President of Strategic Partners here at Tango, she is a Certified Professional of Incentive Management who proudly serves on two industry boards. When she’s not working, Cindy enjoys spending time with her family—including three cats, two dogs, and a horse—and sharing her love of nature as a Nebraska Master Naturalist.