How Your Employees Can Help You Find the Right Candidates.
It’s no secret that sourcing candidates is one of the most difficult challenges you face as an agency leader. Between luring passive job seekers and wading through a daunting stack of applications, this process can feel like a full-time endeavor. But luckily, it doesn’t have to be. There are many people who could be a great fit for your open positions. In order to gain awareness, they just need to hear about the opportunity from a trusted source: your employees!
In reality, this can be harder said than done. I know many of you have asked employees for referrals in the past without much luck. With this in mind, I’ve listed a few different ways to motivate employees to access their network. Below, you’ll find the secret to this challenge: employee referral bonuses.
Employee Referral Bonuses
An employee referral bonus is an incentive that an agency offers to its employees. The formula is simple: refer qualified candidates to open positions, and receive a bonus. The purpose of these programs is to increase the number of qualified candidates in your hiring pipeline. Referral programs are especially useful for identifying prospects who are not currently looking for a new opportunity.
Monetary bonuses are by far the most common type of referral bonus. Some agencies have experimented with huge cash bounties, offering $10k — $20k for referrals. In these situations, you will typically make milestone payments. For instance, you can reward the employee with $4K after the candidate makes it through your agency’s probationary period, which is probably 3 or 6 months. Then, you can break the rest of the payments out over four or five years, contingent on both the referring and referred employees still being at your agency. Conceptually, I like the idea of cash bounties to motivate employees to access their network. But in practice, I have not seen this approach bring in higher quality candidates.
Based on your agency culture, there are other awards that may motivate your employees to refer candidates for open positions. These bonuses include:
Increase number of PTO days
Additional money toward an education stipend
Recognition at an all-staff meeting
Donation to a charity of the employee’s choice
Dinner at a fancy restaurant
Let the employees vote on what type of award they want
And if you’ve had success with other referral bonuses, please share as I like to stay up to date on what’s working for different agencies.
Important Considerations for Referral Bonuses
Diverse workforce. Birds of a feather flock together. In other words, people tend to refer folks who are similar to them — a factor that can negatively impact any goals you may have for a diverse workforce.
Referral bounty. You must decide how much cash will motivate employees to access their network. Keep in mind that you may want to offer different bounties based on how hard it is to fill a particular position. As I listed above, there are other options to motivate employee referrals.
Transparency. It is important to keep referring employees up to date on the process. In fact, I would shorten the timeline for referred employees, since you have someone vouching for them. This could mean skipping the initial phone screen and speaking directly to the hiring manager. Fast tracking a candidate is contingent on them having the required experience to perform the job.
Bonus eligibility. Some companies don’t provide bonuses to senior leaders who refer candidates. I have not seen any evidence to push you one way or another. Based on the level of the position that you are recruiting for, you might want to reward your senior team members for actively accessing their professional network.
Paying out bonuses. During the process, you can offer lump sum payments or break out the bounty and offer milestone payments. No matter how you do it, the import part is communicating when payments will be made and honoring that commitment.
Agency alumni. Connect with former employees who left your agency on good terms to widen the search network. During your exit interview with departing employees, find out if they’ll be willing to refer candidates for employment opportunities.
Are Employee Referral Programs Worth the Extra Effort?
Easy answer — yes.
In addition to identifying candidates who are not actively looking for work (something impossible to do with job postings), well-designed referral programs are highly beneficial. They dictate that employees evaluate potential hires for abilities and fit, while simultaneously selling them on the organization and the position. Above all else, referrals are a great recruitment tool because of the identification and evaluation conducted by someone who knows what it takes to be successful in your organization.