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Employee referral schemes: the IRS survey

Author: Neil Rankin

Key points

  • This report analyses the findings of an IRS survey of organisations' employee referral schemes, otherwise known as refer a friend schemes, refer a friend bonuses and bounty schemes. These schemes offer a reward to employees who successfully recommend someone who is recruited.
  • Schemes are mainly used by private sector employers, primarily because of the public sector's concerns about their impact on equal opportunities.
  • The typical scheme fills 10% of its employer's vacancies annually and pays a cash reward, but does so only when a nominated recruit has been employed for a specified period. Managers involved in recruitment and those responsible for the vacant post are usually ineligible for a reward.
  • Schemes usually cover all types of vacancies, but tend to offer different levels of reward according to the nature of the post.
  • The reward is usually paid as a single sum; the median amount is £700.
  • Many employers expect their schemes to play a greater role in recruitment in the future.