How Much Should an Employee Referral Bonus Be in 2022?
Employee Referral Platforms are a great way to engage your employees, gamify the process, and enhance your referral policy. The question is how much should an employee referral bonus be in 2022? This past year we have seen jobs that didn’t have significant bonuses in the past double the amount you can earn, while jobs with a higher pay have stayed stagnant with the bonus they offer. Jobs that are seeing a high turnover rate are willing to pay more for an incentive with the hope of keeping employees longer. Employee referrals have been known to increase hires by 5x the amount and lead to a longer employee lifecycle. This still leaves the question of what amount should that employee referral bonus be?
How Much Should an Employee Referral Bonus Be?
- The average startup bonus is $2,000
- The average franchise / hourly part-time employee is $300
- The average manufacturing bonus is $1,000
- The average bonus for a software engineer is $5,000 (It can be as high as $10,000)
- The average healthcare bonus is $2,500
- The average bonus for a tech company is $2,000
Why is a Good Employee Referral Bonus Important?
When employers offer employee incentives, like monetary bonuses, the referrals that they get tend to be of better quality. Recruiters are facing the challenge of sourcing candidates. Take advantage of the employee referral bonuses your company offers with their referral program and help turn your employees into your best recruiters. Referral bonuses will lead to a significant impact on your hiring efforts, which is why having a good employee referral bonus is important. Employee referral bonuses can range anywhere from $1,000 to $10,000.
Employee referrals are known to improve the time to fill a position by 40%. The cost of a vacancy for a position alone can end up costing tens of thousands of dollars. If your employee referral bonus is costing between $1,000 to $5,000, the faster time to fill will be worth it. Employee referrals are known to save over $7,500 per hire, helping to fill your recruitment pipeline with the best candidates and also saving you financially in the end.
How Long Should the Waiting Period for a Bonus Be?
The average waiting period for a bonus is 90 days.
Pro Tip: Split your bonus payments into multiple tiers. Example: Have a payment set for 90 days and the next for 365 days.
The real question to ask yourself now is what should your bonus structure look like?