what are the best employee referral bonuses?

We recently surveyed 100 employees to better understand the current landscape and shortcomings of referrals. Our survey base spanned multiple industries, geographic locations and job roles, with varying levels of seniority. We have now released the findings in a free whitepaper, “Rewarding Referrals: Strategies & Insights to Increase Employee Participation & Longevity”. One of the key focus areas of the whitepaper was to understand what the best employee referral bonuses are to increase participation in referrals over the long term.

the best employee referral bonuses

We’ve found that the biggest obstacle to successful referrals is participation and longevity through our past experiences working with clients. For this reason, it’s vital that a well-thought-out strategy is in place that includes reward systems. While most companies today, 88% according to our survey, opt to only offer cash bonuses upon hire or passing probation, our findings show that there are multiple other forms of recognition that are motivating, and often at a lower cost. These can range from raffles to beer and pizza parties to charity donations. However, according to those surveyed, the three best employee referral bonuses for increasing employee participation are time-off, personal development and experiences.

In this blog, we will be exploring these three types of rewards that can transform referrals into a key source of hires by increasing employee engagement:

time-off

While it’s true that even in our study money was the greatest motivator, time-off came second at 50%. Studies show that people who value time over money are happier.  People today have heavy workloads and busy personal lives. More and more people are reporting that time has now become a scarce commodity.

This speaks volumes for the potential in rewarding time-off for referrals. It’s not only a way to recognise employees for their efforts in sourcing candidates for your company, but it could also increase overall satisfaction rates, creating engaged employees. While employees will greatly appreciate a day-off for making referrals, it will also give them the rest they desperately need. The effects of employee engagement on productivity are well documented, with reports that highly engaged employees increase profitability by 21%.

Additionally, in the majority of cases it’s more cost-effective than a cash bonus, when considering that typical monetary referral bonuses tend to sit around the $500 – $1000 range, more than a day of annual leave for most employees.

personal development

Career development has become a key focus for people today. This is supported by our findings, which show that personal development ranks as the third most motivational award. However, employees today are less and less focused on a career within a certain company. People are job hopping more than ever before and this trend is expected to continue. Therefore, acquiring the skills they need to successfully make lateral moves, internal and external, make personal development one of the best employee referral bonuses.

Similarly, thanks to continual developments in technology, core skills constantly need to change. People today feel that their skills are going to date very easily, and in the majority of cases, they’re not wrong. This makes rewarding personal development, be that budget or courses, an extremely desirable, and therefore motivating, form of rewarding.

rewarding experiences

Trips, helicopter rides, scuba diving lessons, the list is endless when it comes to experiential rewards. The reason they can be one of the best employee referral bonuses is because experiences are far more memorable than money. People rarely remember what they spent their referral bonuses on. While employees appreciate money, the appreciation is fleeting. They also expect it, as most companies today provide referral cash bonuses. Experiences, on the other hand, are something people may remember and appreciate for the rest of their lives.

What’s even more powerful with these types of rewards, is that the positive memories gained from these experiences are associated with your company. This is not only extremely motivational, but also helps in retaining employees. Additionally, with a proper advocacy plan in place, experiential rewards can help your employer branding efforts. Everyone today is an influencer. A simple Instagram post from one of your employees with your company tagged in it about an experience you provided them is an endorsement like none other. This is one of the many ways that referrals can play a vital role in your employee advocacy strategy.

so what should I use to reward referrals? 

The options may seem endless. The truth is there’s a lot of different rewards that are effective, and unfortunately most companies’ rewards strategies are based on assumptions. This is one of the key reasons that referral schemes fail. For example, we recently hosted a focus group at a major recruitment consultancy we work with. Our assumption was that the competitive aspects of our platform’s gamification features would be well received. After all, recruiters thrive in and are used to a competitive environment. However, the opposite turned out to be true. They responded negatively to implementing yet another leaderboard. They had enough competition in the workplace. On the other hand, when we held a similar focus group for nurses, we were surprised by how excited they were at the prospect of competition. It was culturally unusual for them and therefore enticing.

The reality is that until you speak to your employees, everything around what, how and when to reward referrals is an assumption and a risk you can’t afford to take. The best policy here is to tailor your rewarding strategy to what your employees find desirable. The only way to truly understand what would motivate your employees to participate in referrals is to ask them directly. In our experience focus groups are an excellent method to understand how to tailor your referral strategy to fit your employees. That’s why they’re one of the first steps we take when working with clients. The findings from these focus groups then go on to dictate how we setup our platform, gamification and process.

While understanding what the best employee referral bonuses are is important, the entire rewarding process is equally paramount to success. When should you reward your employees for referrals (when a candidate starts inteviewing, upon hire, upon passing probation, etc.)? How do you use referrals to increase your recruitment pipeline? You can find the answers to all these questions and more in our free whitepaper, which will help you establish a referral strategy that increases participation and longevity. Read it today.

Want to Improve Employee Retention? Here Are 5 Steps You Need to Take Now.

We’re in the age of the job-hopper, when workers would rather flit from one company to another than stay with the same company long-term.

In fact, a study by Deloitte found that nearly half of millennials plan to leave their current job within two years, and that less than a third plan to stay longer than five years.

That’s bad news for companies and HR execs. But don’t give up just yet – there are things you can do to keep your top talent with you longer.

If you want to know how to improve employee retention, have a read of our five tips.

1. Create an employee referral program.

We hate to state the obvious, but one of the best employee retention strategies is to make the right hire in the first place.

Instead of wasting your time and resources on candidates who are the wrong fit (and who’ll leave your company faster than you can say “notice period”), increase your likelihood of finding the right fit by creating and hiring through employee referrals.

An employee referral is a recruitment method that relies on your existing employees connecting candidates from their networks to a company. The great thing about this method is that you gain access to large talent pools of hard to reach candidates through recommendations as well as introductions to passive and pre-qualified talent. 

Often, the people they recommend have similar values and goals to them, which means if they’re a valued employee, their referral probably will be too. On the other hand, when the person is just an introduction rather than a recommendation, companies are able to reach out and speak to highly sought after talent who are often unreceptive to traditional recruitment methods.

Not only are referred candidates 55% faster to hire, they reduce recruitment costs by up to $3000 per hire, and statistics show they stay with their companies longer.

Want to know more about how you can boost your employee referrals? Get in touch with us now.

2. Offer flexible working.

The strict 9 to 5 working day is out, and flexible working is in. Access to remote working, sabbaticals and flexible hours is the new normal.

If you can show employees you trust them enough to manage their own work and working hours, you’ll most likely experience a spike in productivity levels and engagement.

According to a recent YouGov survey, 89% of British workers believe that flexible working will boost their productivity.

It’s worth knowing, however, that a third of flexible UK workers feel less important in their company because of their flexible working hours. So if you can offer this and still make employees feel like valued team members, you’re more likely to keep your top talent.

3. Hire effective leaders.

Let’s be honest: one of the biggest reasons people leave their job is because of bad management. Workers quit when they feel their direct supervisors either aren’t doing a good job or that they’re difficult to work with.

Stats show when an employee rates their manager’s performance poorly, they’re four times more likely to look for another job.

So if you want your best employees to stick around, you need to make the right hiring decisions when it comes to filling management roles.

4. Encourage employee progression.

The truth is, nobody’s going to stay in a job that bores them. Your best employees want to be challenged. They want to feel like they’re moving forward and that they’re growing professionally and personally.

If you’re not actively nurturing employee progression, expect your best workers to up and leave.

You should know their individual skills and talents, and you should give them the opportunity to explore them – even when it’s outside their usual work remit.

Other ways to encourage progression is by conducting regular pay reviews, offering positive and constructive feedback, and giving them opportunities for professional development and continued education.

5. Show employees they’re valued

The fastest way to lose talent is to make them feel like they’re not valued.

Interestingly, this appreciation doesn’t have to mean more money (though salary does matter). You can show employees you value them by listening to what they have to say, implementing their feedback, being transparent in your decision-making as a company, and offering benefits they actually want and need.

One report revealed that 59% of UK workers say a personalised benefits package – including things like gym memberships and free meals – would “influence their decision to stay at a company”.

When you know your employees well enough, you can tailor their rewards and make them feel so valued they choose to stay with you longer.

Honestly? There’s no way to stop employees from eventually moving on, but if you show them you’re committed to them, you’ll have loyal workers that love your company and will stay as long as possible.

Real Links is a platform that helps you leverage the power of employee referrals. As well as matching you with the best candidates, we make your hiring process faster and reduce your recruitment costs dramatically.

Want to know more? Get in touch with our expert team now.