I am continually amazed and confused when I come across business owners who willingly pay $80,000 or even more on a headhunter to place someone, but offer their employees $1,000, or a fraction of that, to perform the same service. What I recommend to my clients is to offer a more significant employee referral award, depending upon the position, of say $25K which can be paid over a set time period. A payout schedule may be: $5,000 upon placement, and $5,000 every six months to follow if the new hire is still working out.
As you can imagine, many of my clients initially balk at this idea, as paying a 3rd party a significant fee for their expertise seems easier to get their heads around than paying an employee for referring a friend or acquaintance. Perhaps they think it is the employee’s duty to do so.The ones who implement this strategy - however - Get Results! Click To Tweet
One of my clients actually printed out a large, I mean huge, cheque – 12 square feet, in fact, like the ones you see lottery winners presented with, and awarded it to the employee who made the successful referral in front of the entire company. It went over extremely well.
Don’t forget that if you have a healthy culture that you are basing business decisions on, including hiring and firing, your employees know, and are living, your core values. They are talking to your suppliers, customers, and competitors all the time. They hang out with like-minded people. Who has a better chance of finding talent that is a fit for your company: your employees or a headhunting firm that is not immersed in your culture?
Don’t get me wrong. There are many great placement firms out there, even a few that make a point of getting to know their clients and candidates well and care about the right fit.If you have found a good placement firm, then why not get them and your employees working for you? Click To Tweet
As we all know, we are in the middle of a labor crisis when it comes to finding talent, but that doesn’t mean you should be hiring out of desperation. The cost of a bad hire is significant. You need the right people on your bus, as Jim Collins writes, and if your competition is paying substantial sums to their employees for finding the right people, and you aren’t, who has the advantage?