8 Innovative Employee Referral Rewards Ideas with Actual Examples
Sourcing good candidates is among the top challenges that many recruiters face. Employers can encourage employees to refer eligible candidates whom they know who would perfectly fit the role. Employee referral rewards programs are one of the most cost-effective and efficient forms of recruiting among many modern-day companies.
What are referral rewards?
Referral rewards are the incentives given to employees to motivate them to seek, refer and recruit people from their network.
These rewards form the core of the employee referral rewards program, wherein the employees earn rewards on each successful candidate they refer to the company. These referral rewards are mostly paid out as cash rewards. Though lucrative, they are not the only way in which you can reward your employees for their successful referrals. So, let us check out the different types of innovative employee referral rewards program.
Types of employee referral rewards
Most of the employee referral rewards programs are based on monetary benefits. However, the rewards do not always need to be in money form. While monetary rewards are the most efficient methods of incentivising the referral program, recent research has shown that the primary reason (35% of the respondents) why employees refer a candidate is because they want to help their friends seek a better job.
This followed by 32% of the respondents stating that helping the company is the key reason to refer to candidates. Only about 6% of the employees refer candidates with the sole purpose of earning money.
Here are the different types of employee referrals rewards that you can apply to your employee referral rewards program.
- Cash referral rewards
Cash or money is the most commonly used type of referral rewards. The amount of rewards depends on the level of seniority of the job position, the design of the job role and the duration for which the job position is open.
While most companies often increase the referral incentives for the priority job positions, this type of rewards strategy does not always prove to be effective. It has been proved that money is not always equal to higher quality or quantity of candidates. Rather, being transparent about the referral program with your employees makes the recruitment processes much more efficient and effective.
- Diversity referral rewards
Unfortunately, the employee referral rewards program often results in hiring people with the same characteristics, similar thought process and background interest. Because employees feel most comfortable with like-minded people, you will end up with the same kind of people all around the workplace.
Additionally, by implementing the objective of diversity in the recruitment process, companies can utilise the employee referral rewards program to induct more diverse candidates in their workplace. You can add good cash rewards for every successful hire of diverse candidates.
- Tier system of referral rewards
You can choose to pay the monetary referral rewards in stages and follow the tier system of rewards payout instead of paying the amount in one go. This helps to build value for the employee referral program and the employees remain engaged with the referral program for a longer period of time.
This results in sustained referrals for the company. Giving small amounts of money in stages helps to sustain the excitement and motivation of acquiring these incentives, which, in turn, influences the employees to stay focused on the employee referral program.
Many employers use the method of paying the rewards tier wise to boost healthy competition between the employees, and to sustain employee commitment for a longer period of time.
- Raffle referral rewards
A referral rewards system in which the names of all the employees who provided a successful referral are put into a quarterly or monthly raffle for various prizes and bonuses is called the raffle referral rewards system. This type of referral system is best suited for smaller enterprises that do not have the resources or the budget to run a robust employee referral rewards program.
- Prize referral rewards program
Instead of cash rewards, a few companies offer a prize to their employees who do the most number of referrals. Companies, nowadays, want to take this kind of approach and find some attractive and tangible prizes to give their employees on every successful hire.
You can keep the latest consumer technology as the prize. Make sure that the prize is substantial and believable for your employees to provide better referrals.
- Vacation referral rewards
The best thing about employee referrals rewards programs is that you can get creative with the rewards if you want to. Another great way to reward your employees for successful referrals is by offering them a paid vacation.
The vacation reward is an all-expenses-paid vacation trip sponsored by the company. Or, the company can provide coupons that the employee can spend on their travel and vacation holidays.
You need not go all the way out with your vacation reward plans. Plan your rewards as per the job roles you want to hire. Plan your rewards stage-wise with the highest rewards for the topmost positions in the tier.
- Recognition referral rewards
Sometimes, a simple act of appreciation and recognition is enough to encourage employees to refer to better candidates for open job positions.
You do not need to plan expensive referral reward programs, especially when you are a new start up on the rise and want to rapidly hire new staff. In such cases, even the employees know that the business is growing.
When you communicate your plans to your employees, they understand the potential of your business and strive to achieve the best for the business. For such hard-working employees who give their all to the company and help you with better employee referrals, a simple act of publicly recognising and thanking them for their contribution can motivate your employees to strive harder for the business.
- Customised referral rewards
With employee rewards, you have the option to think out of the box. When the rewards on successful referrals are meant for employees, then why not let the employees decide how and what they want to get rewarded. You can set the rules and monetary limitations. You can also give them the valid options as per the rewards program and then allow them to choose what gift they would like out of the options.
It is found that employees feel happier with the rewards when they have the opportunity to choose the rewards. So, set the rules and let your employees decide what’s best for them.
Best employee referral rewards examples
There is one way you can design the perfect employee rewards program: benchmarking.
If you do not have enough time to experiment with your referral ideas, the best thing is to learn from rewards programs of successful companies while trying to apply them in your own customised form into your employee referral rewards program.
Here are the three best examples of unique and successful employee referral rewards ideas, which you can apply to your referral programs.
- Holiday trips: Google
According to Google, the best type of rewards that you can offer your employees for their referrals is a holiday trip. A holiday trip is not what we think to reward our employees with, nor do the employees think that their employer can reward them with a holiday trip.
But, as per Google, a holiday trip is what elevates employees, making them truly happy. It makes them much happier than the equal amount of cash rewards. As Google recently discovered after a survey that sending their employees on holiday trips is way better and beneficial than giving them hundreds of dollars worth of incentives.
So, plan an effective getaway plan for your employees for their successful contribution to your employee referral program.
- Charitable donations: Digital Ocean
Another wonderful idea for employee referral rewards programs is to use it to serve a better purpose. This was perfectly displayed by Digital Ocean as a part of their employee referral rewards program.
In this innovative referral rewards structure, on each successful referral, the referring employee got a referral bonus of $3500 over and above the $1500 donation to charity done by Digital Ocean on behalf of the employee.
Also, if an employee decides to contribute more towards charity, Digital Ocean matches that extra donation.
- The outcome, more than 40% of the new hires at Digital Ocean happen through referrals.
- They could encourage employees to support a charity that really means something to them.
- Plus, doing their bit for a good cause greatly improved their brand identity.
- Public recognition: Hewlett Packard (HP) Enterprises
One of the best ways to motivate your employees to better referrals is by publicly recognizing their wonderful contribution towards the referral program.
HP recognizes its top referring employees as the prime contributors towards the success of the company. This makes the employees feel proud of their effort and it motivates them to do better in the future. Plus, public recognition also motivates the other passive employees to take an active interest in the referrals rewards program.
The company has successfully built a culture, which respects, honours and recognizes top contributors for their successful referrals.
By recognizing the employee and celebrating them as “champions”, the company sets a positive example for other employees to follow.
Sourcing good candidates is among the top challenges that many recruiters and employers face. They can solve this issue to a great extent by encouraging their employees to refer eligible candidates whom they know from their network who would perfectly fit the role. Employee referral rewards programs are one of the most cost-effective and efficient forms of recruiting among many modern-day companies.
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