Cameron Herold explains why offering employees a 50% first-year salary bonus for referrals, paid over five years, beats small one-time payments. A $100k hire nets the referrer $10k annually for five years if both stay. This approach attracts better candidates and improves retention.
Questions this video answers
50% of the new hire's first-year salary.
Paid in five equal installments at months 12, 24, 36, 48, and 60, contingent on both referrer and new hire remaining employed.
$50,000 total bonus paid as $10,000 per year at months 12, 24, 36, 48, and 60.
$30,000 total bonus paid as $6,000 per year for five years.
Chapters
So have you ever struggled at finding really good new employees and are you sometimes tired with using an executive recruiting firm or posting job ads that just aren't getting results? So I've got a ton of really good ideas on how to generate good employees. But I'll give you what has turned out to be the top employee recruiting program or referral program for current employees. So this is how you take current employees that you have and, and generate referrals from them for new employees that you're going to be hiring. This has been tested across multiple companies in multiple countries. Always gets huge results. It sounds a little weird at the beginning, but if you work with me and run through the numbers, it's actually quite powerful and kind of game changing for you. So the reality is it's a pretty competitive environment for a players. Your top employee prospects are never looking for a job. They have jobs. They're not out there looking, they're not on indeed or Craigslist or anywhere on industry job boards looking at your job posting. They're working somewhere and we have to go and poach them. So what you want to do is put in place a bonus for all of your current employees and you give them some clickable links, some shareable links and postings that they can send out to their network, email to their list, post on social media, etc. Send to their friends. And it's going to be a link to the job posting and the application for, for your job that you're hiring for. So let's say you're hiring a hundred thousand dollar person. The bonus that you're going to be putting in place, and again, just stick with me, is a $50,000 recruiting bonus. So if any of your current employees introduce you to someone that you end up hiring, they're going to get a $50,000 bonus, but it's paid out at $10,000 a year for the next five years and it's paid at month 12, month 24, month 36, month 48 and month 60, providing both people are still working with your company. So, so let's say that Fred works for you right now and you give Fred a link that he sends out to his network and somebody applies on that link and ends up joining your company. Fred is going to get paid 10 grand in 12 months. Nothing up front, provided he and that new person that joined you are both still with you for that first year, second year, et cetera. So it's a retention program, a built in bonus program. It often removes the necessity to pay people more because they're making more from having recruited a couple people for you, it becomes a really good retention program for both your current employees employee and your new employee as well. Because the person who recruited them is going to want to make sure that they stay for at least the 12 months as well. Again, it sounds expensive, but when you run the math, the reality is most Gen Y only stay with the company for two to three years at most. So your maximum exposure is probably two to three years times that multiple. I always set IT up for 50% of the salary the person is getting paid in their first year. So if you're hiring a sixty thousand dollar person, put in place a $30,000 recruiting bonus, six thousand dollars a year paid for five years. If they're getting paid two hundred thousand, make it $100,000 bonus, twenty thousand a year for five years. Again, it sounds kind of wackadoodle, but it's huge. I encourage you to try it out. If you've done anything similar and you're only paying like a thousand dollar bonus or fifteen hundred dollar bonus, the reason it's not working is it's not meaningful enough, it's not enough money to make such a huge difference. And you're often wasting that money because you pay it out and then the employee quits or gets fired. Three to six months in and you really haven't gotten a return on your money. Try it out, guarantee it works.
