The struggle is real—finding suitable candidates to join your team can sometimes feel like a losing battle. With an overall lower number of applicants, finding the right skill set and experience within your budget can take time while ensuring you’re making the right hiring decisions.
This is where employee referrals come in. Employee referral programs provide an effective way to increase the number of quality candidates you receive and incentivize your current employees to help you find and recruit great talent for your business.
What Is an Employee Referral Reward?
An employee referral reward is a type of incentive program companies offer to encourage their employees to refer qualified candidates for job openings within the organization.
These rewards typically offer a monetary bonus or another type of incentive, such as extra time off or a gift card, to employees who successfully refer someone who gets hired and completes a designated period of employment.
Employee referral rewards help companies find qualified candidates and also help build a strong and engaged workforce by encouraging employees to become brand ambassadors and active participants in the company’s recruitment efforts.
Benefits of an Employee Referral Bonus
In today’s competitive job market, it’s becoming increasingly difficult for companies to find and hire quality candidates. That’s why incentivizing and rewarding employees for referring great candidates has become popular among HR professionals.
Not only does it encourage employees to actively participate in the recruitment process, but it also brings in some great benefits.
Improves Candidates
One of the top benefits of an employee referral program is that it can help improve the quality of candidates that apply for open positions. When employees refer someone they know, they are more likely to understand that person’s qualifications and work ethic.
This helps ensure that the referred candidates are a good fit for the company culture and job responsibilities.
Moreover, an employee who refers someone has a better knowledge of the company’s culture, values, and work policies. Then they can suggest someone who aligns with the company’s principles and can become a valuable asset in the long run.
Employee referrals also help bring in a diverse pool of candidates. In addition, it encourages employees to refer candidates from varied backgrounds and communities. This, in turn, helps companies build a diverse and inclusive workforce crucial for future growth.
More Effective Recruitment
Employee referral programs can also be more effective than other recruiting forms, such as job postings or external recruiters. Because employees already have a strong connection to the company, they are more likely to refer candidates who would be a good fit for the vacant position.
Referral bonus programs also help companies save time and money, as less recruitment advertising and marketing are needed. It’s also more efficient and practical for both HR and employees.
An employee who has referred someone also spends less time and effort explaining the job requirements and other aspects of the company compared to the regular hiring process.
Conserves Resources
Recruiting can be costly and time-consuming, but employee referral programs can help conserve resources. Companies can reduce their spending on job postings, external recruiters, and other recruitment-related expenses by incentivizing employees to find and refer candidates. This can help stretch the recruiting budget further while still attracting top talent.
Candidates who are referred often come pre-qualified and distinguished in their field of work. This can save time for HR and hiring managers, who can focus on other aspects of the hiring process.
Another benefit of an employee referral bonus is that it enhances employee engagement and satisfaction. Employees are happier at companies where their opinions and actions are valued. This creates a sense of investment in the company’s success.
Shortens the Hiring Timeline
Finally, employee referral programs can help speed up the hiring timeline. Because referred candidates tend to be more qualified and a better fit for the company, they can move through the hiring process more quickly. This can help reduce the time-to-hire, vital for keeping the company competitive in today’s job market.
Also, since candidates who are referred already meet specific qualifications for the vacant position, hiring managers can focus more on job requirements and company culture fit during the interview. This reduces the preparation required before the interview and saves time and resources.
Employee Referral Rewards Ideas
Rewarding employees for successful referrals can significantly boost employee morale and incentivize quality talent to join your organization.
Here are some employee referral rewards ideas to consider:
Tiered Rewards
Offer tiered rewards for successful referrals. For example, offering a $50 gift card for the first referral, $100 for the second referral, and $150 for the third referral. You could also provide variations in gift card types, such as a choice between dining, entertainment, or shopping.
Raffle Referral Rewards
Hold a raffle for employees who submit referrals. Each successful referral would earn an employee a raffle ticket for a chance to win a larger reward, such as a $1,000 digital gift card.
Vacation Referral Rewards
Consider rewarding successful referrals by offering either a paid day off or, better yet, a gift card that can be redeemed for a vacation or a travel experience. A good example is the option to go to a luxurious resort or redeem an airline gift card.
Custom Referral Rewards
Allow employees who successfully refer potential candidates to choose their rewards, such as movie tickets, home appliances, or gift cards to their favorite retailers. This approach can motivate them even more, to actively participate in the program.
Get Better Results From Your Recruitment Efforts
Employee referral programs can be an effective way to get better results from your recruitment efforts. They save time and money by reducing the need for external recruiters, decreasing the time-to-hire timeline, and conserving resources. These programs also help boost employee morale and engagement when employees are rewarded for successful referrals.
With various rewards available such as tiered bonuses, raffles or vacation packages, you can tailor your program to fit company goals while rewarding employees in meaningful ways. Implementing an employee referral bonus system into your recruitment process today gives you access to top talent quickly and cost-effectively.
Author Name: Cindy Mielke
Author bio: Cindy 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 in 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.
Photo by Unsplash
