Employee Referral Bonus
How to create an employee referral program with Hireology.
Employee Referral Bonus - Hireology
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Latest articles about employee referrals
Employee Referral Bonus
Does your company have an employee referral program? If not, you’re missing out on one of the best drivers of quality employees and ROI. Employee referral programs are set up to incentivize your current employees to refer their friends and peers to work at your company.
Employee referral bonuses are what allow this to happen. You specify how much of a bonus a referral for each role will receive, and give employees an easy way to submit their peers. It’s a win-win because your employees will work among their friends and receive money for submitting them, and you’ll get access to great talent.
So if you don’t currently have an employee referral program, you should set one up as soon as possible. In this article, we’ll discuss how to set up an employee referral program at your organization, go over some employee referral bonus ideas, cover the different ways to share it out — like an employee referral bonus flyer or email communication — and how you can run a successful referral program.
Employee referral bonus amount
So you’ve decided to set up an employee referral program. You have to first establish a few things:
- Create an employee referral program policy:
To get started, it’s important to create the rules that will guide your employees and your new hires. You need to establish what type of incentives you’ll offer, whether it be monetary or otherwise. When your employees will receive their payouts — some employers set up payouts on a schedule to incentivize both employees and referrals to stick around. And you’ll have to outline who qualifies for the program: some employers don’t allow directors or HR professionals to participate as their roles already require them to bring on new team members. Additionally, some organizations don’t allow employees to refer their spouses or family members so that there aren’t issues around favoritism.
- Establish your employee referral bonus amount:
Designate whether you’ll be offering monetary compensation for referrals or if you’ll opt for gift cards or other compensation, like paid time off. These employee referral bonus examples differ from traditional incentive compensation, but it doesn’t mean they aren’t effective. You can pol your employees to find out what would make them most likely to refer their peers to get a better idea of what they’re looking for. And when it comes to amount, use trial and error and decide on tiers of openings. For example, you can offer $500 for an entry-level position, $1,000 for a manager, and $1,500-$2,000 for a director-level role or one that is more difficult to fill.
- Communicate your program to your employees:
Your employees can’t participate if they don’t know the program exists, so make sure you’re getting the word out. Use your internal channels, like Slack and email, to make sure your entire workforce knows about your program. Additionally, utilize all-company meetings to highlight the program, along with specific roles that you’re hoping to fill. You can even hand out an employee referral program pdf or employee referral program flyer to spread awareness about the program.
- Establish employee referral program benchmarks:
The best employee referral programs adapt with time and are based on the goals their company sets. This will allow you to track the success of your program and make sure that you’re actually seeing results. You can set goals for each quarter or the entire year, but make sure to keep reporting them out and improving your process when necessary, whether that be with bigger incentives or more communication.
Following these steps should help you set up your program in no time.
Sample employee referral program
As you look to set up your employee referral program, try looking at other examples and sample employee referral programs from other companies. This can help you decide your bonus amount, who qualifies for your program, and other helpful information.
Here are some sample employee referral program ideas you can use in your constructions:
- Employee referral program sample email
I wanted to tell you all about the new employee referral program we’ve set up. We want you to refer your friends and peers to work here, and in return, we’ll give you a bonus!
At the moment, we have 15 open roles, and each week we’ll highlight a role and some of the high-level qualifications we’re looking for. If you know someone who may be a good fit, please let the HR team know.
Qualifications: Two or more years of sales experience, great communication skills, able to work in a fast-paced environment and meet quotas
Payout for this position: $500
To learn more about the role, you can find the job description here [link to description].
- Employee referral bonus template
We have three tiers based on the level of experience required for the role.
- We offer $500 for nontechnical roles which include Marketing, Sales, Customer Success, People, Finance, and Revenue Operations
- We offer $700 for technical roles which include Product, IT, and Engineering
- We offer $1000 for hard to fill roles which are determined as the need arises
- All bonuses are paid out at 50% upon start date and 50% after the completion of three months of employment.
- If you refer three people who are hired within a 12-month period, you will receive an additional $1000
- Director-level roles and HR personnel do not qualify for the program
Employee referral program ideas
Here are some employee referral bonus examples from other companies you can look to for inspiration:
employee referral program Accenture
Accenture uses an employee portal for referrals, where current employees can go and submit their peers. Anyone referring will get a referral bonus post-selection of the referred profile which is based on the level of the employee they referred. Employees are only allowed to refer a profile once, so it’s important to submit the right people for each role.
Google employee referral program
The Google employee referral program has had a recent refresh because they saw the value it was bringing to their organization. Firstly, they doubled their referral bonuses, but that didn’t make the impact they were hoping for. So they instead decided to begin the referral process in new employee onboarding by asking every new hire “Who is the best (salesperson, engineer, developer, etc.) that you have ever worked for?” and “Who are 5-10 people you would want to work with again?” That’s a great tactic to get employees thinking about their network, and Google saw a 33% increase in employee referrals.
These employee referral program ideas hopefully gave you an idea of how to set up a great program.
Employee referral policy
When you start to establish your employee referral policy, make sure you know who will be able to participate. For example, you can exclude directors and your HR team from participating since a part of their job is to find talent.
Create an employee referral policy pdf that houses the policy rules, along with the information for the employee referral bonus policy. You can create an employee referral bonus flyer to hang in your lunchroom, email out the employee referral program guidelines, or host them on your internal site. Whether you decided to go with an employee referral bonus flyer template or another method of communication, just make sure the rules are clearly spelled out so that your staff has all the information they need to keep your program running smoothly.
Employee referral program
An employee referral program has the ability to get you great talent, but there are other reasons to adopt one. Some other benefits of employee referral programs are they are incredibly easy to run and they help you fill your talent pipeline at a fraction of the cost of job boards with a much higher return on investment. According to Hireology data, one in eight hires made is an employee referral and employee referrals are four times more likely to be hired than non-referrals. That’s huge considering the difficult hiring climate that we’re currently in. With the right incentives, a well-constructed communication plan, and a good culture, you’ll be able to hire great employees at a much faster rate.
Why does your culture matter? Because employees won’t recommend that their friends work at your organization unless it’s somewhere they actually want to work as well. So you have to focus on creating a welcoming environment where employees feel appreciated and comfortable being themselves before you set up an employee referral program.
As long as your culture is in a good spot, you should be good to launch. Hireology’s recent acquisition of EmployUs, an employee referral program software, can help you run a successful employee referral program, designate rules, spread the word, and track rewards all from your hiring platform. Additionally, referrals can be automatically inputted into your hiring system automatically so you don’t have to worry about rekeying important information, saving your team time.
The benefits of having a great employee referral program are huge and worth the small investment, so give us a call if you’re ready to set yours up today!