Employee Referral Programs and Bonuses

Employee Referral Programs and BonusesEmployee Referral Programs and BonusesCompanies seeking talent often devise an incentive system whereby current employees are rewarded with a referral nachschlag if they recommend a candidate who is ultimately hired. A few employers award bonuses for viable referrals that dont result in a hire. However, most employers require incentive hires to remain with the firm for at least a few months before paying the bonus to the employee who referred the new hire to the hiring manager. Companies Offering Bonuses According to the Society of Human Resource Management (SHRM), roughly one of every two employers offers a formal referral bonus program. Such programs account for close to 25% of all hires, on average. Many other employers have an informal referral system. At some companies, such programs cover any job. In other cases, bonuses are restricted to positions with an insufficient supply of talent- for example an e-commerce company might provide bo nuses for software engineers, especially if theyre in a competitive market for tech talent, but not other roles that are easier to fill. The United States government even offers an employee referral bonus program at the discretion of individual agencies to staff hard-to-fill jobs. Its important to note that the roles selected for bonus programs arent inherently more valuable than non-bonus eligible roles often, theyre just harder to fill. So if your job titledoesnt make the cut, dont feel undervalued. (But do, perhaps, go through your network and see if you have connections to refer for these in-demand jobs.) Why Companies Pay Bonuses Employers often believe that accessing the social networks of the current staff can be more cost-effective than other recruiting techniques, including the use of executive recruitment services. Some research indicates that incentive programs yield a higher quality employee and enhance zurckhalten of staff. In any case, referral programs are a good way of building a sense of community and teamwork. Its in employees best interests to recommend potential colleagues that are skilled, responsible, creative workers. No bonus is worth the social fallout from making a bad referral (especially if the referrer in question has to work directly with a less-than-stellar candidate). When You Should Refer a Contact With this in mind, its important to screen your contacts carefully before passing their resume along to human resources. Before making a potential connection, ask yourself Is This Person Qualified for the Role? Look at the job description and your contacts resume. Do you see overlap? Does your friend have the relevant experience, education, and skills? If they were a stranger, would you see them as a viable candidate? Are They Interested in the fleck? It might sound obvious, but if the potential candidate isnt enthused about the opportunity, he or she shouldnt be pushed to take it. You burn social capital every time you make a recommendation that doesnt work out. Dont set yourself up to lose by trying to force a fit that doesnt exist. Would You Want to Work With Them? Even if you wouldnt be working directly with your connection in the new role, its only fair to ask yourself if youd want to do so. If not, why would you subject your current colleagues to the experience? Finally, once youve made the referral, your role in the interaction is finished. Dont follow up on your friends behalf or put pressure on the hiring manager to select your candidate. At best, youll make your connection look like someone whos not able to fight their own battles at worst, youll come off as less than professional and possibly stalkerish. Neither scenario will help your friend get hired, or you get that bonus. Employee Bonus Amounts Incentives vary greatly by company, with cash, gift certificates, trips, and even cars being awarded. The value of incentives ranges from $250 to more than $25,000 (for executive positions) wit h the most common range being about $1000 - $2500 according to a survey by WorldatWork. Bonus payments were made in a lump sum about 70% of the time, on average. In other cases, partial initial payment was made with the remainder awarded at a later date (often after one year). If a company has an employee referral program, company policy will determine the guidelines, including how to refer a prospective employee, the size of bonuses, eligibility, and payment.