Referral incentives are a great way to encourage your employees to engage with your employee referral program and ultimately increase the number of hires you make from referrals.
Staffing Industry Analysts’ most recent report predicts that agency spend will hit $8B in 2014, more than double what was spent as recently as five years ago. The biggest problem with this is that often there is little visibility into agency performance and no workflow around communicating with agencies. It is an unsettling fact that many staffing firms would be challenged to even tell you how much money they spent on agency fees last year, despite the fact that this figure can reach millions of dollars.
It is unsurprising then that staffing firms are increasingly looking to new ways to recruit without the costly reliance on headhunters. Oftentimes, one of the most effective ways for a staffing firm to grow its contractor base is to leverage the social capital already available to them in the form of existing contractors.
Recent research concluded that the average American has 634 social connections in their network, which consists of friends, family, coworkers, and other acquaintances. On top of that, technology users have even greater networks, meaning that technical contractors such as IT specialists often have many more connections within their networks. Many of these social connections are likely to share similar skills, values and experience. What this means for staffing firms is that great candidates are often right at their fingertips- but they lack the means to reach them effectively. One of the best ways to unlock this pool of potential candidates is to find ways to incentivize your contractor base to make external referrals.
Although some well-designed referral programs produce great results without any monetary rewards, the majority of research shows that offering a monetary reward increases both the number and quality of referrals. This doesn’t mean that you should offer a lot of money, but it does mean that you should vary their rewards and change them periodically to keep people excited. Many firms also successfully use non-monetary rewards such as vacations or gadgets like iPhones and iPads. Whether monetary or not, the key is to vary the rewards and see what best incentivizes your contractor base to make external referrals.