Employee Referrals

by Jessica Flora

Who knows your company better than your own employees? Employee referral programs are a great tool for companies recruiting for hard-to-fill positions. Not only do they provide a pool of candidates, but they are far cheaper than other recruiting methods. They also have the potential to reach candidates who are not found through other recruiting methodologies.

The Survey Says

According to AAIM Employers’ Association’s 2015-2016 Policies and Benefits Survey of 150 St. Louis and central Illinois businesses, 26% of organizations offer an employee referral bonus for all positions. The average referral bonus payout is $451 per referral.

Issues to Consider

Be creative. A cash bonus is not the only option for a referral program. Consider other incentives such as a free tablet or extra days of vacation to motivate employees.

Create a policy. It is important to have a policy in place to refer to.  Consider waiting to pay out the full bonus until the referral has worked for the company for a specified period of time. This way the company can avoid throwing away money on employees who do not work out.

Communicate. Employees will forget about this policy if it is communicated via a handbook only. Sending out periodic reminders will keep employees looking for referrals.

Jessica Flora, PHR (solutions.team@aaimea.org) is on the Research and Solutions Team for AAIM Employers’ Association, which helps Missouri and Illinois companies manage their people and processes.