Recently at TRAFFIT we launched our huntoo system. It’s a system that allows you to crowdsource your next candidate, from your own network. Simply putting it, you can finally start paying people who refer you to awesome candidates who you end up hiring.
That all sounds good in theory right, but what’s next? How much do you give? What would make your network want to refer their friends to your jobs?
Today I’m going to share with you 3 types of rewards and communication you can use to find your next great refer and ultimately you new hire.
The Big Ticket!
Who wouldn’t want to earn $20,000 for simply referring their friend to a new job?
This is what I would call the big ticket number.
In this example the company is offering $20,000 as a referral bonus while searching for a Head of Talent. This sounds like a crazy number, but it actually makes sense when hiring anyone with an annual salary of $100,000 or more.
Because this big ticket is competing with a head hunting agency. Currently the success fees that agencies charge is around 20% of the candidates annual salary. So if this person’s salary is even $105,000, this company will save money going to their network for referrals over going to an agency.
So big tickets are great when you know it’s for a highly competitive position. Your network knows the worth of a Head of Talent, or a Senior IT Developer, so you can’t really afford to offer low values, it will make you look cheap.
The down side of big ticket values is they increase the expectation for some referrals. So if they have a friend who they think might not be experienced enough, they will decide it’s not a good fit and not refer them. When in fact as a recruiter you really want this kind of candidates too. So remember, high rewards will build the picture of a high standard of candidates only.
The believable number
The second method is what I call the believable number, but it basically is used when you are hiring for roles that are lower entry salaries.
I love how Venatrix does this. They offer £250 for a successful referral, and they look for SDRs and BDRs. For me as a referrer, it’s a realistic number and I also wouldn’t think too much about the expectations. I would simply fire over a few of my sales friends for consideration.
In my opinion, the reason this number is so much different than the big ticket numbers above is because the competition here is not agencies or head hunters. It’s job boards. Venatrix are considering that it’s better to pay £250 to a person in their network, rather than £300+ to a job board. Especially the referrals convert substantially better than job board candidates.
What is great to see here from Bayer, is that they explain that the bigger the position, the bigger the referral fee. It’s simple right 😀 Try to avoid the ‘We pay up to $20,000 in referral fees’. When in practice the average is $3,000.
The more transparency you offer around your program up front, the more trust your referrers will have in you.
Maybe it’s not about money.
We have to keep a constant reminder that people are motivated and triggered by different rewards. That includes none financial rewards.
Here Calcey does exactly that. They are offering a brand new iPhone12 in exchange for a successful referral. From what I understand an iPhone 12 128GB retails for around $1,000. But not everyone is excited about $1,000. They can be super excited about a brand new iPhone.
The other benefit around this approach is I’m sure it can make tax admin much much easier. Especially if you want to let people from any country refer candidates. Sending someone an iPhone is much less tax work for you and the receiver.
Why does this matter?
We rely on our network for many things. Restaurant recommendations, likes on our holiday selfies and cute pet pictures. But we shouldn’t underestimate how much they value their time, and that there is a scale of that value.
Liking your recent post about a company’s success = free. Because they also don’t think that their ‘like’ is probably going to benefit your business all that much.
Referring you a great candidate = not free. Because they believe that this candidate will add a lot of value to your business AND they know the fees headhunters charge for successful candidates.
You need to make sure that the request matches the reward. When anyone refers a candidate to you, the first important thing to do is show gratitude. Even saying thank you will go a long way. For many companies reward schemes start when a candidate is hired. But for many referrals it starts when they send a candidate your way.
I hope you found this post interesting, I really would love to hear about your experience both as companies who collect referred candidates, and also if you have ever referred a candidate to a company and how your experience was!
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Until next time. Happy recruiting!