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Employee Referral Program Rewards that Work

“Face-off” by Sébastien Launay  is licensed under CC BY 2.0

If you are designing or revisiting an Employee Referral Program at your company, what are the rewards that should be offered to motivate employees? There are some great stories out there of companies who’ve awarded tens of thousands of dollars, motorbikes, and vacations, but are these really needed to get your employees to find people they know who will want to work with your company? No!
I’ve heard multiple times that if you just build a good culture, good referrals will come in. Or that if you are a magnet employer, you will get enough applicants. I’d like to challenge those who say an employee referral program isn’t needed and they don’t need to prove they are getting the best hires at the lowest cost.
The truth is very little is needed to motivate good employees to refer good people but it must be measure. Don’t get me wrong, they does need to be some rewards. But the process is twofold: HR and Management don’t just need to deliver the rewards, they also need to track them and the results if they want to be sure of what’s happening. What gets measured, gets results.
Back to the rewards. The greatest rewards are praise and surprise rewards. You would be amazed what the effects are of the CEO or a Manager publicly thanking an employee for a great hire. It’s a great reward for both the new hire and referree. At one company I know, the main reward is branch-wide praise from the president every time a referral passes their probationary period.
Then we have surprise reward, something unexpected like concert tickets, or a gift certificate to a 5 star restaurant. The good thing about these rewards is that if they are under $500 they may be considered non-taxablebut check with your accountant first!
One last thing is, if you do offer cash rewards, leave room to mix it up with a double reward. For a month like July when you need to go on a hiring spree, announce a double incentive or a draw for twice the rewards. This gets minds back on the program, just like wheeling an electric bike into the office, or announcing that someone used their reward to go to Disneyland. Wouldn’t that be nice!

Kael Campbell is President and Lead Recruiter of Red Seal Recruiting Solutions, a company providing recruitment services in mining, equipment and plant maintenance, utilities, manufacturing, construction, and transportation. When he is not recruiting, Kael spends as much time as possible with family in the great outdoors and on the water. He volunteers his time as a Board Member of the Entrepreneurs Organization of Victoria and a Member of Victoria Marine Search and Rescue.
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