Why Big Referral Bonuses Don't Yield Big Results

[fa icon="calendar"] Mar 2, 2016 3:31:29 PM / by Andy Wolfe

Andy Wolfe


Identifying top employee connections is crucial for companies that want to hire great people fast. 

That's why most companies offer a monetary reward when employees refer their friends. While large referral bonuses seem like a great incentive, they're not always as useful or cost-effective as one would think.

Why is it that big bonuses don't actually yield big results?

When employees are willing to help you out and have a few solid candidates in mind, those recommendations are golden. However, a large referral bonus rarely increases the volume of quality candidates you need to build a steady pool of talent. 

What Would Google Do?

Take it from Google: they doubled employee bonuses, but that’s not what actually worked. They found that people gave referrals for the sole reason that they enjoyed working at Google. In other words, altruism was a more powerful motivator for referrals than a large monetary incentive.

How Do You Identify Quality Contacts?

So, if bigger referral bonuses don’t help, how do you keep quality recommendations coming in?

Make the process really, really short and easy.

Expecting employees to match their friends to lots of open jobs on a regular basis is not realistic. Employees get overwhelmed, especially provided that they're not very incentivized by money.

Instead, if you just make it easy for employees to point out whom they enjoy working with, you'll be amazed by the results. This means you're simply asking your great employees to identify great people they know, and let the hiring team take care of the rest. 



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Topics: Recruiting, Sourcing, Referrals

Andy Wolfe

Written by Andy Wolfe

I'm co-founder and CEO of ROIKOI, a smarter sourcing platform where you get your own database of candidates pre-filtered for talent and fit.