When it comes to employee referral bonus amounts, does size matter?

I would think that offering $1k for a referral is going to attract more attention than offering $10 for that referral, but does anyone have any proof or experience that suggests that larger rewards improve the quality and quantity of candidates that are referred? If you raise the reward to $2k or $5k, does the program become more effective in attracting more of the right candidates to your position than if you kept the $1k reward? What are your thoughts on this topic?

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Permalink Reply by Brian on June 8, 2008 at 9:25pm

Personally Kevin I think it is going to depend on what position you are recruiting for. If your hunting for a CEO it's entirely different from a middle manager or salary employee. The last firm I worked with gave a couple hundred to a referal that was sucessfully hired and met job expectation once on the job. They were recruiting for entry level sales with candidate earning 40-80/yr.

Best Regards,

Brian

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Permalink Reply by Sandy on August 20, 2008 at 9:13am

Hi Kevin ...

The last company I worked for gave a referral fee between $200 - $500. or gift cards for contract positions after a 30 days process

Let me know if you can use my help!

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Permalink Reply by pam claughton on August 20, 2008 at 9:32am

No, it doesn't really seem to matter. If people are going to refer they'll do it for $500 or $5,000....That's what I've seen anyway and half the time they don't even know what amount the referral fee will be, just that they're getting one. That said, when I was on the client side, we paid $2,000-$5,000 depending on the level and difficulty of the search.

On the agency side, I've seen as low as $25 (and tons of referrals) to as high as $1,000 for more difficult searches. The amount really never seemed to affect the quantity or quality.

What affected it more than anything else was if the recruiter actually solicited the referral. If you don't ask, you generally don't receive, is what we found. Even on the client side, employees often needed prompting and direct contact and a reminder that they would receive a referral bonus if they even gave us a name of someone good and we recruited them.