The Referral Bonus Program is an incentive that companies use to motivate employees to hire employees from their own work networks. Typically, such a program is part of a more robust referral program. The company grants a referral bonus to an employee when an employee is hired by the company and stays to work here for a certain period of time, which was predetermined in advance. The bonus is usually offered to government officials who are sending someone a full-time permanent job.
Some companies do not take into account recommended candidates who have a specific relationship with the company. That is, this means that candidates have submitted their resumes and applications and opened positions in the company in advance, as people who are eligible for a referral bonus. Such a program does not allow employees to plunge into the established society of the company in order to make money on bonuses.
Usually, HR specialists, executives, recruiters, and hiring managers are not eligible for a referral bonus. This is due to the fact that the main goal for them is to get work done, and their networks are very extensive. This creates an imbalance because it gives them an unfair advantage over other employees in the company.
There are several reasons why referral bonuses are beneficial to companies struggling to hire:
- Your hiring opportunities depend on staffing agencies
- Your candidate’s pool needs improvement
- You are a small company that does not have huge resources
- You struggle to hire great people fast
- You want to save money
- You need to quickly reach your goals immediately after closing a round of funding
