Referral program rewards are one of the most important parts of implementing an employee referral program and are key for getting your staff involved and actively participating in referrals. As it stands, 69% of organizations with employee referral programs offer candidates $1,000 to $5,000 in cash incentives.
Whilst many businesses decide to offer cash rewards, there are many that don’t; around 15% of companies with referral programs offer time or additional vacation days as an alternative incentive. Equally, many businesses find themselves unsure of where to start when managing an employee referral program and how to use rewards in the workplace.
How to Use Rewards in Your Program
The most common way employee referral programs are used is that a company offers a cash reward when a member of staff recommends a new hire that ends up being placed within the company. Under this model, the employee only gets paid if their candidate was successfully placed. However, it’s not uncommon for companies to pay rewards for candidates that simply reach the interview stage.
In order to ensure that your new hire is right for your business, it’s a good idea to wait for the new hire to work for your company for a couple of months before providing the full reward to your employee. This helps to ensure the new hire is brought onboard successfully. According to WorldatWork, 68% of organizations pay in full compared to 32% who opt to split the payment.
Limitations of Your Referral Rewards
No less important than defining your reward is defining the limitations of your program. For example, it’s a good idea to make it clear that rewards will only be provided for hiring permanent employees. This way, you don’t have to fork out rewards for short-term contracts.
Likewise, you want to make sure HR employees and anyone involved in the hiring process can’t receive a reward. The reason is that they are in a position of bias, as they will have considerable influence over the hiring process. This helps to ensure you have a program that’s free of any rigging!
Another great way to limit your rewards is to prohibit staff from referring warm leads that have had contact with the company in the past. This means not paying out rewards for any new hires that have been originated from past applicants.
Do You Need Financial Incentives?
It’s important to remember that while financial incentives are a good idea, they aren’t essential. Money isn’t everything and sometimes expressing that staff will have the opportunity to influence who they work with is more than enough to get them motivated. Providing extra holiday days is a great way to give an extra push as well!
Define Your Rewards!
The key to successful reward programs is to ensure they’re clearly defined with well-known limits. This way your staff will know exactly what’s in it for them when they take the time to make a referral. Whether it’s time off, money or the chance to influence their team a little incentive goes a long way. That being said, no matter what reward system you use, make sure you always thank your team for their contributions.