5 Ways to Incentivize Employee Referrals
Recruiters and hiring managers know that their employees’ social and professional networks can be the most valuable source of pre-screened, high-quality candidates. The challenge is figuring out the right mix of incentives to encourage the optimal employee referral behaviors. As a recruiter your goal should be to encourage employees to refer relevant, passive candidates for your high-priority roles.
The “right” incentives will vary from based on industry, open requisitions, company size, and region so you’ll have to do your research and experiment to get to the right mix for you. You’ll need to be open-minded and do what works for your company, employees, budget, and culture, but here are 5 core pillars that are vital in supporting any successful employee referral program.
5 best practices
Go beyond only celebrating hires
The most motivating and cost effective way to incentivize referrals is to recognize referring employees for their work. Share their efforts and stories at team meetings, and recognize them publicly, especially for all the efforts that go into finding, engaging, and connecting great candidates with your recruiters. Valuing employee referral efforts not only shows employees you appreciate them, but reinforces a company culture that prizes recruiting efforts by all employees.
Find the right size referral bonus
Sixty-four percent of recruiters report awarding monetary bonuses to incentivize referrals in their organizations. You want your bonuses to be high enough to incentivize the work, but not so high that you jeopardize the quality of employee referrals. The last thing you want is to screen through hundreds of candidates submitted by employees who were simply trying to increase their odds of submitting a successful candidate. The average referral bonus is between $1000 and $2500 for a typical exempt position, but experiment to find what works best for your industry, geography, and roles.
Rethink when you pay referral bonuses and for what activities
If you only give referral bonuses once an employee has been with the company for three months, you are missing a huge opportunity to incentivize desirable behaviors. Create a system that rewards employees who refer high-quality candidates and provide small bonuses at different milestones—such as referral accepted, onsite interview, and offer accepted—then a larger bonus at the three month point. Some companies hold daily raffles for participation.
Consider non-monetary rewards
Some companies reward referring employees with things like points to use in the SWAG store, extra paid time off, an even all-expenses paid vacations. Rewards offer an amazing opportunity to build your culture as they by definition are the things your company values so get creative!
Add an element of gamification to create competition
Often, competition and social rewards are more effective than money at driving engagement and participation. Tap into this motivating force by creating a public leaderboard to show which employees have reached out to the most people in their network, submitted the most accepted referrals, and who has referred the most hires.
Most of all it’s important to be iterative and transparent about your employee referral and recruiting efforts. Share with your employees how their work fits into the company’s overall hiring strategy and the impact that they can have on the organization’s ability to hit its goals.
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