Research on Referral Bonuses

Ryan O'Donnell Updated by Ryan O'Donnell

CareerXroads Research

CareerXroads conducted a survey of 70 companies about their referral bonus amounts. Most companies payout these rewards if an employee referral gets hired and stays employed over a period of time (more on that below), but sometimes a smaller rewards paid immediately can be more attractive.

Here is what CareerXroads found as industry standard for referral bonuses paid per hire:

  • Part-Time / Contingent Positions:
    • 80% did not offer any referral bonuses
  • Non-Exempt Positions:
    • Bonuses ranged between $250 - $1,000
  • Exempt (Including Director & Executive) Positions:
    • Bonuses ranged between $1,000 - $5,000

EmployUs Research

A study conducted by EmployUs between 2015-2016 where EmployUs analyzed referral bonuses from over 100 companies and their impact on referral volume and quality discovered several interesting trends.

  1. Once referral bonuses dropped below $500, there was a sharp decline in referrals and hires for full-time roles.
  2. Increasing your referral bonus from $500 to $2,500 showed a increase in both referrals and referral hires.
  3. Once referral bonuses surpass $2,500, there was no net change in the volume of referral hires.

There are exceptions of course. Companies like HubSpot and Atlasssian are famous for offering $10,000 referral bonuses. These larger bonuses are still more cost effective than traditional recruiting fees but they are not shown to impact the quantity of referrals.

It’s important to consider which types of jobs you want to include in your referral program. Will all positions have referral bonuses associated with them? What about internships, co-ops, and part-time jobs? Do you want to approve which jobs are eligible on a case by case basis?

Non-monetary rewards can also be effective in driving success. Offering movie tickets, travel vouchers, or extra PTO can work for special initiatives or if monetary rewards have proven to be ineffective in the past. Gamification and contests, where points are awarded based on activity, is another effective strategy to keep employees engaged. 

Raffles and games can be based on activity or tiers. For example they can be tiered based on activity where your activity translates into more opportunities to earn additional rewards

  1. Advocate: Sent 3 Referrals
  2. Promotor: Sent 5 Referrals
  3. Ambassador: Made 1 Hire
  4. Super Ambassador: Made 3 Hires
  5. Mega Ambassador: Made 5 Hires

How did we do?

How to Track Referral Bonuses in EmployUs

Setting The Right Referral Bonus