Building Your Talent Pipeline - The Right Way to Implement Referral Bonuses
Referral bonuses are a very simple and effective, yet extremely underutilized recruiting tool. Simply put, referral bonuses are generally monetary rewards given to an employee who recommends a candidate who is ultimately hired.
Unfortunately, many companies use this great tool unsuccessfully. Here are some tips to follow when designing and implementing an employee referral bonus program.
The right way to implement referral bonuses:
- Make it meaningful - The monetary reward should be substantial enough to incentivize current employees to take action. When establishing the reward amount, consider the cost of employee turnover!
- Re-enforce communication - Do your employees know about your referral bonus program? Do they have the right information, or did they hear a rumor? Be the source of accurate information!
- Celebrate the payouts - Help the referring employee feel special by recognizing them not only with the bonus, but for their great referral! This is an effective way to bring positive momentum to the program as well. Host a lunch for everyone and hand the employee their referral check; this will give other employees a glimpse at how fulfilling the feeling can be!
- Create clear, simple rules - Don’t overcomplicate the rules. Complicated rules with too many steps which result in people not earning their referral bonus could lead to confusion and resentment.