Sticky HQ did a survey to find out what motivates employees to participate in your Employee Referral Program, and found that the highest ranked incentive was a simple public recognition. As a close second, money was considered of equal value to a simple thank you. Next were days off and reward in product.
It may make sense to do a similar survey internally, to find out what will encourage people to refer quality candidates to your organization. Just make sure to equate the value of the reward to the value of the hire. For example, if you’re spending thousands of dollars on agency fees to fill the role, but are only paying out a couple hundred dollars for referrals, you can't expect to see great results. It’s common practice to pay between $1000-2500 per hired referral.
I’ve recently also heard about companies giving a smaller monetary reward for just referring a qualified candidate - whether they were hired or not. This gives your employees immediate gratification, and doesn't punish them if the person they hired was qualified, but just not hired for a reason outside of their control. This amount is usually around $25, and equals out to the same amount of referral bonuses as the larger rewards.
Some companies have gotten creative with their rewards, and use different giveaways including cars, boats, home renovations and vacations. A company called Quintiles gives cash rewards and also enters referring employees into a drawing for a once-in-a-lifetime trip. One reward was a trip to the 2012 Summer Olympics in London, which drives home the idea that they are looking for the world’s best talent — just like the Olympics attracts. This unique employee referral program reward heightened engagement, and employee referrals kept rising.
Regardless of the rewards, if you want your employees to participate, you have to make it simple and keep your employees involved in the process. That means laying out the process, including what to expect. Let your employees know when you plan to start interviews, what your interview process will look like, and if their candidate makes it to each step of the process. Keeping your employees in the know will help encourage them to keep referring candidates, because they'll know you're not ignoring them.