Why is referral bonus so popular?

Compensation and benefits

Did you recommend your friend or acquaintance to your HR department for hiring? In some companies you can receive as a reward for such a service some financial or non-financial benefits. Companies begun to reward employees if they help bring new and skilled help into the firm. Referral bonuses are a good way for companies to build a community among employees. It is in the employee’s own best interests to recommend a high-quality candidate as they are personally engaged in the entire process.

The international salary portal Paylab.com, which continuously monitors employee benefits, determined the prevalence of referral benefits in the region of Central and Eastern Europe.

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Informal, relaxed and open communication gives a potential candidate insights into the inner workings of your company and their specific job description. Many such activities bring new people into an interview. A referral bonus is a reward if a recommended candidate becomes a full-fledged reinforcement and is retained by the company for longer than, for instance, one year.

Rewarding employees for their assistance in recruiting new people to a company comes across as a win-win strategy towards alleviating these issues. The employee receives a bonus and the company gains new human capital at an overall cost savings.

Overall, referral programmes are a bit more prevalent in capital cities, which have a higher concentration of head offices with more specialised requirements on employees. Referral bonuses were first employed in Central and Eastern Europe by private foreign companies. They have long identified people as capital and appreciate the untapped potential offered by the social relationships of their employees, which may spread into various social circles and groups.

Read detailed finding in Paylab Newsroom.

Communication and Market Research Specialist with focus on Compensation & Benefits