2020 employee referral programs benchmark report

copy Copyright Drafted Inc 2021 Draftedus

2020 Employee Referral Programs Benchmark ReportAnalyzing referral programs of 200+ companies


Table of Contents

2

2 Table of Contents3 Why this Report Matters4 About the Report5 Key Takeaways

Respondents6 Respondents by Sector7 Respondents by Company Size8 Respondents by Years in Business

Applicant Tracking Systems9 Applicant Tracking Systems (ATS) Breakdown10 ATS Small Companies11 ATS Growth Stage Companies12 ATS Midsize Enterprise13 ATS Large Enterprise14 ATS and Referrals

Hires from Referrals15 Hires from Referrals

Rewards and Referrals Overview16 Rewards17 Rewards and Extra Perks18 ldquoHot Jobsrdquo Bonus19 Reward Restrictions20 Referral Rewards and Hires

External Referral Programs21 External Referral Programs

Demographics and Referrals22 Company Size and Referrals23 Company Age and Referrals

Summary24 Recap of Key Takeaways25 Recommendations from Drafted26 Additional Resources27 About Drafted28 Join the 2021 Report


Why This Report MattersReferrals have been a way to expand your network and recruit great people since the dawn of time Seriously If we look back all the way to 55 BC the first ever lsquoreferral programrsquo was created by Julius Caesar who signed a decree offering 300 sestertii to any soldier that recruited someone to join the Roman Army

88 of employers say that referrals is the most effective way to hire while 70 of employers agree that referrals also make a great culture fit 45 of referred hires stay more than 2 years which is more than any other source of hire

Source Link EREnet

3


About The Referral Programs Benchmark ReportThis is the second Employee Referral Programs Benchmark Report from Drafted We published the first one in 2017 which you can get here

Our mission was to establish a baseline for employee referral programs and share what we learn from our community of recruiting and talent teams

4


Key Takeaways The choice of an Applicant Tracking System has

minimal impact on referral hiring success

The average percentage of hires from referrals is 27with 44 being one standard deviation above In otherwords if yoursquore at 44 hires through referrals yoursquoredoing an A+ job

Most companies opt for a simple cash reward with amedian referral reward $2000

50 of the companies offering a referral reward alsooffer a ldquohot jobrdquo bonus for hard-to-fill or urgent roles

Referrals are the most popular hiring source forcompanies independent of company size and age

Emerging trends include external referral programsand experiential non-cash rewards

5


Respondents by Sector

6

We collected data 200+ organizations just over half were technology companies


Respondents by Company Size

7

Most of the companies were privately held and we split them into small (lt100) growth (101 - 500) mid-size (500-1000) and large companies (1000+ employees)


Respondents by Years in Business

8

The median age of companies was 10 years with a small number of outliers

Median age 101 years


Applicant Tracking Systems (ATS)

9

40 of respondents used Greenhouse while Lever was the second most reported with 17 We will note that this is a skewed sample and biased toward our ATS partners


ATS Breakdown for Small Companies (0 - 100 employees)

10

Roughly 36 of small companies reported to not use an ATS or were unclear on which one they use

copy Copyright Drafted Inc 2021 Draftedus 11

ATS Breakdown for Growth Companies (101 - 500 employees)Roughly 60 of companies in the growth stage reported to use Greenhouse as their ATS


ATS Breakdown for Midsize Enterprise (501 - 1000 employees)

12

Roughly 47 of midsize companies reported to use Greenhouse as their ATS


ATS Breakdown for Large Enterprise (1000+ employees)

13

Large companies had the most diversity in choice of ATS The majority roughly 30 reported to use Greenhouse as their ATS


ATS and Referrals

14

There is no conclusive evidence that the choice of ATS affects the effectiveness of employee referral programs

This graph shows median referral hiring rate reported by companies categorized by Applicant Tracking System (ATS)


Hires from Referrals

15

Less than 20

21 to 40

More than 40

On average 27 of hires came through referrals and 44 was one standard deviation above In other words if you fill 27 of your positions through referrals thatrsquos a B+ If you fill 44 or more thatrsquos an A+


Rewards

16

Over 80 of the companies that reported a reward offered a cold hard cash reward for a successful hire The median referral reward reported is $2000


Reward Types and Extra Perks

17

13 of the companies offered an experience gift or donation as a reward This is a cool way to express your company values and culture through your referral program


ldquoHot Jobrdquo Bonus

18

50 of companies offering a referral reward included a ldquohot jobrdquo bonus or reward increase based on hiring position seniority

Majority of ldquohot jobrdquo bonuses were focused on acquiring tech and engineering roles and most companies scaled the bonus level depending on seniority of the position

The most popular maximum bonus was $5000 with the highest reported ldquohot jobrdquo bonus being $30000


Reward Restrictions

19

Majority of companies have a probationary period before the referral reward is paid out

60 of the companies that offered a referral reward have some sort of terms and conditions

Out of the companies with reward restrictions over 90 included a probationary period ranging from 30 to 180 days

This has become similar to agency recruiting an industry standard


Referrals Rewards and Hires

20

Data indicates that between $3000 - $5000 is the sweet spot for getting the most for your dollar As you increase your bonus above $5000 you may get more referrals but experience diminishing returns


External Referral Programs

21

25 of companies offering a employee referral reward also opened it up to an external referral program

This is higher than our last survey which was 8 indicating that this may be a trend

Roughly 16 of the companies reported to have a sliding bonus scale based on seniority of hiring position or a ldquohot jobrdquo bonus

The median external referral reward reported is $1000


Company Demographics and Referrals

22

When comparing companies reported referral data to their age and size the data shows referrals play a major part in the hiring process



23

When comparing a companyrsquos reported referral data to their age and size the data shows referrals play a major part in the hiring process


Recap of Key Takeaways The choice of an Applicant Tracking System has


The average percentage of hires from referrals is 27 with 44 being one standard deviation above In other words if yoursquore at 44 hires through referrals yoursquore doing an A+ job

Most companies opt for a simple cash reward with a median referral reward $2000

50 of the companies offering a referral reward also offer a ldquohot jobrdquo bonus for hard-to-fill or urgent roles

Referrals are the most popular hiring source for companies independent of company size and age

Emerging trends include external referral programs and experiential non-cash rewards

24


128640 If you donrsquot have one already consider an external referral program to boost your hiring It can also help with adding some diversity in referrals

128513 Donrsquot worry too much about how your ATS is going to impact referrals - go with the workflow you like and use integrations that help you boost referrals

128202 When making a case about your referral program to your executive team bring the data Herersquos an ROI calculator template that can show you the impact that more referrals can have on your bottom line

128564 Donrsquot sleep on your referral program put it front and center of your resource planning Many talent teams are creating ldquoReferral program managerrdquo positions in their org to ensure that they are constantly innovating in this area

128075 At Drafted we help companies run best in class referral programs You can try it out for free or talk to us at wwwdraftedus

Recommendations from Drafted

25

5 tips to make the most of your referral program


Additional Resources Referral program insights and content created by the Drafted team

20 Examples of External Referral Programs

The External Referrals Playbook

How to Optimize Your Employee Referral Program

25 Referral Contest Ideas for Employees

What is a Company Network

Referral Networks and the Future of Hiring


About DraftedAt Drafted we believe that your company network is your single biggest recruiting asset We build software that helps companies run best-in-class referral programs experiment with new trends like external referrals and unlock the real power of their collective company networkYou can try our products for free at wwwdraftedus and read more on the Drafted blog

Additional free resources from the Drafted team include

Referralprogramsorg Diversityreportsorg Layoffstech

Try Drafted for free to build your employee referral program in Slack 128071

27


Join the 2021 Report Missed out on submitting your stats to the 2020 Referral Programs Benchmark Report The 2021 survey is now open

Tell us about

Your ATS Employee Referral Rewards External Referrals Diversity Metrics Your 2021 Hiring Plan

Submit your answers here 128071

28


Table of Contents

2

2 Table of Contents3 Why this Report Matters4 About the Report5 Key Takeaways

Respondents6 Respondents by Sector7 Respondents by Company Size8 Respondents by Years in Business

Applicant Tracking Systems9 Applicant Tracking Systems (ATS) Breakdown10 ATS Small Companies11 ATS Growth Stage Companies12 ATS Midsize Enterprise13 ATS Large Enterprise14 ATS and Referrals

Hires from Referrals15 Hires from Referrals

Rewards and Referrals Overview16 Rewards17 Rewards and Extra Perks18 ldquoHot Jobsrdquo Bonus19 Reward Restrictions20 Referral Rewards and Hires

External Referral Programs21 External Referral Programs

Demographics and Referrals22 Company Size and Referrals23 Company Age and Referrals

Summary24 Recap of Key Takeaways25 Recommendations from Drafted26 Additional Resources27 About Drafted28 Join the 2021 Report




Source Link EREnet

3




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9




10






12




13



ATS and Referrals

14





15

Less than 20

21 to 40

More than 40



Rewards

16




17




18





Reward Restrictions

19







20




21







22




23










24








25















27



Tell us about



28




Source Link EREnet

3




4









5



6




7




8





9




10






12




13



ATS and Referrals

14





15

Less than 20

21 to 40

More than 40



Rewards

16




17




18





Reward Restrictions

19







20




21







22




23










24








25















27



Tell us about



28




4









5



6




7




8





9




10






12




13



ATS and Referrals

14





15

Less than 20

21 to 40

More than 40



Rewards

16




17




18





Reward Restrictions

19







20




21







22




23










24








25















27



Tell us about



28









5



6




7




8





9




10






12




13



ATS and Referrals

14





15

Less than 20

21 to 40

More than 40



Rewards

16




17




18





Reward Restrictions

19







20




21







22




23










24








25















27



Tell us about



28



6




7




8





9




10






12




13



ATS and Referrals

14





15

Less than 20

21 to 40

More than 40



Rewards

16




17




18





Reward Restrictions

19







20




21







22




23










24








25















27



Tell us about



28



7




8





9




10






12




13



ATS and Referrals

14





15

Less than 20

21 to 40

More than 40



Rewards

16




17




18





Reward Restrictions

19







20




21







22




23










24








25















27



Tell us about



28



8





9




10






12




13



ATS and Referrals

14





15

Less than 20

21 to 40

More than 40



Rewards

16




17




18





Reward Restrictions

19







20




21







22




23










24








25















27



Tell us about



28



9




10






12




13



ATS and Referrals

14





15

Less than 20

21 to 40

More than 40



Rewards

16




17




18





Reward Restrictions

19







20




21







22




23










24








25















27



Tell us about



28



10






12




13



ATS and Referrals

14





15

Less than 20

21 to 40

More than 40



Rewards

16




17




18





Reward Restrictions

19







20




21







22




23










24








25















27



Tell us about



28





12




13



ATS and Referrals

14





15

Less than 20

21 to 40

More than 40



Rewards

16




17




18





Reward Restrictions

19







20




21







22




23










24








25















27



Tell us about



28



13



ATS and Referrals

14





15

Less than 20

21 to 40

More than 40



Rewards

16




17




18





Reward Restrictions

19







20




21







22




23










24








25















27



Tell us about



28


ATS and Referrals

14





15

Less than 20

21 to 40

More than 40



Rewards

16




17




18





Reward Restrictions

19







20




21







22




23










24








25















27



Tell us about



28



15

Less than 20

21 to 40

More than 40



Rewards

16




17




18





Reward Restrictions

19







20




21







22




23










24








25















27



Tell us about



28


Rewards

16




17




18





Reward Restrictions

19







20




21







22




23










24








25















27



Tell us about



28



17




18





Reward Restrictions

19







20




21







22




23










24








25















27



Tell us about



28



18





Reward Restrictions

19







20




21







22




23










24








25















27



Tell us about



28


Reward Restrictions

19







20




21







22




23










24








25















27



Tell us about



28



20




21







22




23










24








25















27



Tell us about



28



21







22




23










24








25















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Tell us about



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22




23










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23










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25















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24








25















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28








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28

2020 employee referral programs benchmark report

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