Let Your Employees do the Leg Work for You with Employee Referrals

1. Tie the employee referral reward as close as possible to the action.

Why some companies wait to pay employee referrals.

I believe this concept of waiting to reward the employee referral came from the recruiting world. In the recruiting world, a recruiter doesn't get paid until the employee has stayed for a period of time. Waiting insured the company received a good hire before having to pay out.

Reasons to pay for employee referrals quickly.

Where employee referral differs from the actual recruiting world, is that a company is typically paying the recruiter 10-30% of the employee's annual salary. For an employee referral, you'll probably just be paying $50-$1000.

When the reward is drawn out a ways away from the action - the action in this case is the employee spreading the word about the job ad - people become less driven to see it through because the reward doesn't equal the risk.

If you pay the employee referral bonus upon hire of the new employee the motivation for your employees to find an employee referral is much higher.

2. Don't punish your employees for things beyond their control.

Another problem I see with employee referral programs, is that the company is usually punishing employees for things they don't have control over.

Employees don't have control over the hiring process.

Your employees ultimately don't have control over who you decide to hire, how they're onboarded, what the hours and pay are for the new hire, or how they're treated as employees. Often times if an applicant doesn't get hired, or if a new hire doesn't stay on longer than a couple of months, it's because of something you as the employer did.

Pay employee for qualified applicants.

One thought on this is that you could pay your employee per applicant or per job post ad. Obviously with this you wouldn't be paying the $50+ for each applicant, but you could throw out $5 per qualified applicant. Even just a little something that shows your employees that you are grateful for them doing the work to find applicants, even if you don't hire their employee referral.

Success: When Employee Referrals make Current Employees Happy!

Instead of taking that money you would spend to hire a recruiter and let it leave your company, you're investing the money back in your company and your employees. It's almost like giving your employee a little raise!

Try implementing these hiring tips into your employee referral program and see if it makes a difference in your hiring process. For other tips on how to increase qualified applicants for your open job positions, check out the eBook: Top 5 Proven Ways to Increase your Qualified Applicants.