SmartRecruiters Hiring Success Journal

The 3 True Incentives of an Employee Referral Program

What are the true incentives of a referral program today? Most people would answer this question by saying “cash for hire,” or some sort of referral hire award. Offering rewards for successful hires has become the norm within employee referral programs today. According to careerXroads, 88% of companies with referral programs are currently providing rewards. However rewarding just successful hires is probably the biggest obstacle to employee engagement with referrals.

The reasons why so many companies are seeing a drop in engagement are because the chance of winning a reward is just too low, and because typical employee referral programs today have a lag of 4-5 months from the day a candidate is referred, to the day the referral reward is distributed. This structure lacks incentives, and leaves employees with the feeling that their referrals have disappeared into a black hole.

The solution? Create a program built around multiple channels of recognizing employees, including incentives for quality referrals, as well as rewards for successful hires. Let’s take a look at three different ways to do this.


1) Provide Immediate Recognition  

Immediately recognizing the actions of your employees is a great way to solve the “black hole” problem. This recognition is a form of positive feedback, and will leave employees feeling appreciated, which will further encourage them to participate.

Reward employees who perform certain desired actions in your referral program. For example, before you launch, offer a small token of appreciation to employees who join within a week. You could also offer movie tickets, or a dinner for two, to every employee who refers 3 candidates.

Having predetermined rewards for short term, easily achievable goals, allows employees to feel that their actions are being recognized now, much before a hire takes place. This quick feedback is necessary to increasing engagement since employee actions are noticed right away, which further incentivizes them to participate.


2) Reward Quality Effort

Rewarding quality effort is key to making sure you are receiving high quality candidates. One way to do this is to distribute points based on different actions that your employees take. Make sure to differentiate points given out so that you reward quality over quantity.

Making these points redeemable for prizes is a great way to further increase engagement. Create a system that allows employees to cash in their points for prizes. For example, 800 points could be redeemable for movie tickets, but 15,000 points could be worth an iPad mini! In addition to offering differentiated prizes, advertise them throughout your office. This will remind your employees to participate daily. Not sure what to offer? Ask your employees for advice!

Award more points for the actions you value the most. This type of incentive around referral programs is great for engagement because it encourages what is most important to you, high quality referrals.


3) Create Friendly Competition

Friendly competition is fun and exciting for everyone, plus it can encourage teamwork within your company. Creating competitions within your referral program will greatly increase participation, as it will allow employees to work towards a common or individual goal. These competitions can range anywhere from a company wide raffle, to a competition between departments or offices.

Friendly competitions are a great part of incentivizing your referral program since they are great at getting people to talk about referrals and start a buzz amongst your office. These types of incentives are also important in the long term since you can switch them up to surprise your employees and keep things interesting!

These ideas mentioned are only some of the ways to use incentives in your referral program. Don’t be afraid to get creative, the more effort you put in, the more you will be rewarded. The key to keeping participation levels high is creating different incentive programs that quickly recognize efforts. Giving your employees the satisfaction of ongoing rewards and different incentives will keep your referrals at an ultimate high level!



 Ziv Eliraz is the Founder and CEO of, a software that supercharges referrals. Want to learn more about incentives in employee referral programs? Download our Ebook on Gamification for Employee Referral Engagement.

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Ziv Eliraz

Ziv Eliraz is the Founder and CEO of, a software that supercharges referrals. Want to learn more about incentives in employee referral programs? Download our Ebook on Gamification for Employee Referral Engagement.