This template allows you to build a referral bonus policy according to your company’s needs.
What Is a Referral Bonus Policy?
A referral bonus policy is a program set up by companies to encourage their employees to participate in the recruitment process. Employees can refer people in their network to apply for a job within the organization. They are then eligible for a financial bonus if the referred candidate is hired.
What Is in a Referral Bonus Policy?
Companies that use referral bonuses as part of their recruitment plan usually have a clear policy in place.
This includes, for example:
- Effective date
- Eligibility requirements
- Bonus amounts
- Terms and conditions and ethical framework
- Any other relevant information
Why Set Up a Referral Bonus Policy?
What Is the Difference between a Referral Bonus and a Hiring Bonus?
A hiring bonus refers to financial compensation paid to a new employee when he or she is hired. It is a means of encouraging recruitment and attracting potential employees.
A referral bonus is a sum paid to an employee who proposes qualified candidates to his or her employer. The amount is paid to the employee when the referred candidate is hired.
Why Offer Employee Referral Bonuses?
Employees are in the best position to persuade new talent to apply for the company they work for. As well as increasing the level of motivation within the team, referral bonuses increase the level of efficiency when recruiting staff.
How Can a Referral Bonus Increase Employee Retention?
Referral bonuses help improve employee retention, as employees enjoy working with people from their network. If they have fun at work, a team’s motivation and productivity will improve. A happy employee will stay longer within an organization.