We are all aware of Referral Rewards to hire the right talent, but its usage varies a lot, company by company. Many times its because we are not aware of its effectiveness or ignorance.
While many companies’ experience already proves that it is such a great booster to accelerate the speed and enhance the quality and productivity of hiring. Referrals can be a great way to get talent.
They generate 70% more quality hires than those who don’t refer and make it easier to fill more positions in a shorter time. What better way to spend your agency’s recruitment budget than to pay people you already know (your ambassadors) to recommend candidates?
Referrals can be a Great way to Get Started.
Investigate your competition.
Referrals should always prove profitable. When deciding the amount to pay ambassadors, consider your bill rate, gross profit margin, and the point when your agency makes money.
Referring should be fun because you know that you are getting your money back. It is important to understand how your referral rewards compare with others in your industry to stop ambassadors from sending referrals to competitors.
Staffing agencies that hire in the IT sector typically offer higher rewards, while industrial referrals are more affordable.
However, when you look at the bonuses as ranges, it becomes clear that some agencies will pay ambassadors a lot more than the average. When designing it, it is important to know where your agency fits in the program.
Make sure you choose Referral Rewards that ambassadors are interested in.
Referrals can be rewarded in many ways. Gift cards, extra perks for employees, and charitable donations are just a few examples. Sometimes, all that is needed is to recognize an ambassador in a company newsletter.
If you ask ambassadors for their preferred rewards, they will likely say cash or equivalent cash (such as a gift card that they can redeem at any place they choose).
This is the easiest and most popular way to encourage program participation. 96% of LinkedIn employees surveyed believed cash bonuses were the best reward for successful referrals. Our survey showed that more than 80% of respondents preferred a monetary reward to non-monetary options.
These are some other tips to optimize your referral rewards.
You can use a dual-sided referral system. While most agencies offer a referral bonus to only ambassadors, we have found that leads increase when there are bonuses for both the ambassadors and applicants who refer.
Uber, Airbnb, and others popularize this referral program. Dual-sided referrals increase the trustworthiness and credibility of ambassadors. They also strengthen the bonds between applicants and agencies. It’s a win/win situation.
Instead of receiving ongoing or tiered bonuses, use a one-time bonus. Many firms offer ongoing bonuses, such as $1 per hour that the ambassador works, or tiered bonuses, such as 50% when the referee is hired and 50% after three to six months.
These bonuses are not as effective at generating new referrals as those paid in one lump sum. They can also complicate the process and increase the amount of administrative work.
It is best to pay ambassadors and applicants a flat fee based on a specific milestone (e.g., after 30 days of work).
In the Last
Reward payments should always be made when promised. People who do not receive their bonuses on time are the biggest complaint about referral programs. It would help if you did what you promised.
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