more-arw search

Q&A Forum

Does your company reward an employee for referring someone who is hired?

Carter O'Brien's Profile

If so, what kind of reward and what are the rules? Does the new employee have to stay on for so many months before the referral reward is given? Any employee referral bonus program guidelines appreciated.

Answers

Ken Stumder
Title: Finance Director / Controller
Company: Ken Stumder, CPA
(Finance Director / Controller, Ken Stumder, CPA) |

Yes, we do offer referral rewards. Ours do not vary in amount based on level of hire which I've seen implemented elsewhere. Generally the payment is not given until the employee is with the company for 3 months. Very straightforward.

Anonymous
(Chief Financial Officer) |

We are a specialized Science and Engineering Consulting firm. We find that our technical employees are a great source of new employees. We give the referring employee 5% of the starting salary of a new employee after they are with the company for 6 months. This is much less expensive than using a search firm and has been very successful for our firm.

Sara Voight
Title: Controller
Company: Critical Signal Technologies, Inc
(Controller, Critical Signal Technologies, Inc) |

Our industry requires significant training (medical reponse assistance and HIPAA laws). As a result we have a two piece referral bonus for our staff. People get $50 after the new staff member has been here for 90 days and then they get another $150 when the staff member hits 180 days.

Anonymous
(CFO) |

I work for a public agency and yes, we do. Sadly, we've even awarded them to executives who hired their own relatives - in violation of public law!

In my private industry days, I was taught that such programs were counter productive to creating a diversified workforce: That birds of a feather tend to gather together. Thus, it was more likely that we would refer someone like ourselves. This not only creates issues with EEO, it robs the company of the breadth of ideas that come from employing a broad section of our community.

Besides, no matter how well intended, the perception by employees that one is hiring friends and relatives is a detriment to overall morale.

Because of this, we eliminated these referral rewards programs.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

We (that being any company that I've been a part of) have never offered referral rewards.

If you as management have created a dynamic, inclusive, fun, exciting (fill in the positive verb) place of employment, employees would want to share that with their friends and relatives.

From that sharing, one would assume (a dangerous term) that referrals would happen. In essence, the company has already "paid" for the referral.

Lyle Newkirk
Title: CFO
Company: Corrigo Incorporated
(CFO, Corrigo Incorporated) |

Referral bonuses work when you are hiring several bodies a month and you need specialized talent. It is much cheaper than paying recruiters and you generally have fewer question marks since someone knows what kind of employee you are getting. Controls are needed such as no bonus for hiring direct reports or relatives.

Topic Expert
Malak Kazan
Title: VP, Special Projects
Company: ERI Economic Research Institute
(VP, Special Projects, ERI Economic Research Institute) |

I've been with organizations that have offered some type of referral bonus. Senior executives are excluded from participating (they're expected to have connections / be well networked at that career stage). Depending on where you want to have the greatest impact, the program should be monitored and adjusted. Typically you want to target functions/positions with high turnover or tight labor market. At call center, we focused on the call center employees; at accounting firm, accountants and CPAs. The more senior positions, the longer the tenure to payout the full bonus (i.e. call center employees 3 months; accountants 6 months). Hires through referrals tend to have higher retention because of the psychological contract between the employee who recommended the organization and the friend / relative getting foot in the door. Hope this helps.

Topic Expert
Christie Jahn
Title: CFO
Company: Prime Investments & Development
(CFO, Prime Investments & Development) |

We do offer a referral bonus and doing an analysis of where most of our talent comes from it has been referrals. We do not stipulate any length of employment before paying the bonus however I see the value in that. I have proposed we do that in the past and the fear is no-one would refer anyone for fear of them not working out.

Ken Stumder
Title: Finance Director / Controller
Company: Ken Stumder, CPA
(Finance Director / Controller, Ken Stumder, CPA) |

I think the length of employment requirement and no payout for referral of direct-reports have been key features in every adaptation I've seen.

Topic Expert
Linda Wright
Title: Consultant
Company: Wright Consulting
(Consultant, Wright Consulting) |

We did at my former company. However, the executive team (of which I was a member) was not eligible, which I thought was the right answer.

Topic Expert
Edward Abbati
Title: Vice President of Finance
Company: Location Labs
LinkedIn Profile
(Vice President of Finance, Location Labs) |

We offer a referral program.
1. $1,000 per candidate hired;
2. Must be employed for 90 days
3. Cannot be a family member
4 Must be currently employed

Joan Green
Title: VP Finance
Company: National Counseling Group
(VP Finance, National Counseling Group) |

We offer a referral program and are pleased with the results
when referred employee stays 90 days - $500
1 year - $1,000
for a total of $1,500 for an employee that stays with us for 1 year.

Anonymous
(Finance) |

3/5/10k structure & 90 days

Edward Thill
Title: VP - Finance & Operations
Company: Performance Trust
(VP - Finance & Operations, Performance Trust) |

We pay $2,500 upon hire and another $2,500 after 6 months. Executive team and hiring managers (for positions in their own dept) are not eligible. I agree the practice can stifle diversity but it has served us well in qualifying candidates as nobody wants to be associated with the referral that didn't work out.

5455 views

Get Free Membership

By signing up, you will receive emails from Proformative regarding Proformative programs, events, community news and activity. You can withdraw your consent at any time. Contact Us.

Business Exchange

Browse the Business Exchange to find information, resources and peer reviews to help you select the right solution for your business.

Learn more

Contribute to Community

If you’re interested in learning more about contributing to your Proformative community, we have many ways for you to get involved. Please email content@proformative.com to learn more about becoming a speaker or contributing to the blogs/Q&A Forum.