As companies enter the ScaleUp stage, recruiters and staffing firms are a critical part of a good talent acquisition strategy. The cost for recruiting services start at 25% of each new hire’s annual compensation, including commission and incentives. With this approach, fees can add up fast.
We recently worked with a firm that was trying to fill 35 new hires in this manner, which would have resulted in $700,000 in fees. The question is: are there other ways to attract strong candidates to fuel your company’s growth, but with less cost?
The answer: of course. Too often, we see companies that think once you hand your searches over to the recruiters or staffing firm, you just sit back and wait for the candidates to roll in. But the most successful companies we work with aren’t passive – they GO AFTER IT. Recruiting is everyone’s job when it comes to finding the right people, not just the job of your recruiter or staffing firms. The ability to use all possible weapons to bring on talent, and do it quickly and cost-effectively, can be the difference between meeting your aggressive objectives and falling short.
If you’re the kind of person that thinks scrappiness is a key to ScaleUp success, you might like to know the scrappiest ways we’ve used to land high-quality hires– for practically FREE:
1. Get referrals from the networks of your top employees:
Not only are these referrals cost effective, they are higher quality than other hires according to this article.
- The average employee will have 150 contacts on social media networks – 100 employees means around 15,000 contacts (and possible candidates).
- Employee referrals have the highest applicant to hire conversion rate – only 7% apply but this accounts for 40% of all hires.
- Applicants hired from a referral begin their position quicker than applicants found via job boards and career sites (after 29 days compared with 39 days via job boards and 55 via career sites).
- Referral hires have greater job satisfaction and stay longer at companies – 46% stay over 1 year, 45% over 2 years and 47% over 3 years.
- Salespeople are the most hired position from employee referrals.
- 67% of employers and recruiters said the recruiting process was shorter from referrals, and 51% said it was less expensive.
The key that many companies ignore is that you want your best employees to refer, not those “hanging by a thread”. “Top” employees know strong performers. They know what “good” means – beyond just skills, but also attitude, energy and fit with the cultural norms. Find ways to encourage your best to convince their friends and colleagues to apply. Emphasize this after review season by targeting the top reviewed people, or after awards are given and after service anniversaries.
Your newest employees love you: companies we work with see every new hire as a referral source for one of their much-needed frontline openings. One of our company’s asked new people to make referrals in their first 30 days. Another came out and asked for them right in orientation on Day 1!
Get your shiny new people to refer while they are still excited and have emotionally “sold” themselves on your company. Besides, everyone likes to look like a big shot and get a friend hired at their new company, right? Bonus: people who have referred a friend who got hired into their company are also less likely to leave that company themselves out of loyalty to the friend.
Finally, the question is should you pay employees for their referrals? We have seen it done many ways. Some examples of the approaches we have seen:
- All referrals qualify for a “referral” bonus. Usually paid after 90 days of the new employee’s tenure, or ½ at 90 days and ½ at 1 year, or a similar combination of short- and long- retention. Often companies step their referral bonuses: $500 for first one, $750 for 2nd, $1,000 for 3rd and $1,500 for the 4th, for a total of $2,750
- All referrals qualify for a “referral” bonus, but amounts vary based on difficulty to fill the role. These often pay a lower bonus for easy-to-fill positions with a healthy pipeline, and a higher bonus for harder-to-fill positions that require a special skill set or in high demand.
- Referrals are considered doing your network—and your company—a “favor.” If you think your employees have this kind of passion for your company, a simple “thank you” might be enough
Obviously, you can get creative here. We have heard of companies offering some audacious prizes (raffle off a Tesla anyone?) if the company reaches a referral goal, with one entry for each employee referred. One thing we know for sure: referral bonuses are always a cheaper source than paying a staffing firm.
2. Post on your social media, especially LinkedIn.
LinkedIn is the go-to site for both active and passive jobseekers. While there are LinkedIn “recruiter seats” that cost $7,500, meant for both internal and external recruiters, hiring leaders and their teams can post jobs to their entire network on their LinkedIn for free. Because your network tends to be closer to what you do professionally, this has the added benefit of naturally targeting a more relevant audience.
A simple cover note and link to your careers page is all that you need. Here is a good example.
Speaking of your network: do you connect with EVERYONE you meet? If you are constantly hiring, this is a must. If you hire for frontline, hourly roles, connect with great service staff you meet in stores, hotels or in restaurants so you can find them again. Yes, we are saying to add that great waiter as a LinkedIn contact. We were at lunch with a client recently and got chatting with an outgoing waiter, who mentioned that he had just graduated college. We asked him why he was waiting tables and he said he had just earned a degree in a field that our client was in and hadn’t found a related job, yet. With one conversation, we were able to make a perfect match. You never know who is waiting tables and why.
If you are a seasoned professional, connect with people you meet at industry events, so you don’t lose their business card, or lose touch altogether. Needless to say, your LinkedIn network should be in the hundreds, if not thousands.
3. Make it easy for your team and colleagues to share your opening(s) on their social media, too.
How? Give your colleagues or team a soft copy of the job description and a short cover note about why their network might be interested in this job at this company, along with that all-important link to the online job posting. Perhaps even cut-and-paste what you posted on your own feed and share with them. Ask them to share it on their LinkedIn feed for you or share your post to their own network. People are usually happy to help you and the company grow in any way they can, and their network is a huge multiplier of your own.
4. Reach out to your professional network with a job description and self-made “pitch.”
If this sounds like LinkedIn, it’s not. This is a targeted email sent to key people with whom you have a strong relationship, asking for their personal referrals and recommendations. This is especially helpful if you are seeking expertise that can be found within your network of colleagues at companies in your industry or who know what you are looking for. Because this is time-consuming, you will only do a few of these, but each one is carefully crafted. A phone call or face-to-face ask is even more powerful version of this.
Most people are happy to help others with career opportunities, knowing that they may need it themselves (or needed it) someday. People in your network know other people in your field.
Include the job description and a link to your company’s careers page in an email, with clear instructions for how and to whom to apply. This method never fails to turn up 4-6 qualified and interested candidates for us. The more specific we are in our pitch, the closer the fit to what we are looking for. A personal endorsement from colleagues often pushes some candidates over the top to apply.
5. Touch base with good candidates you didn't hire before; they may be your future stars.
We once had two equally compelling candidates for a job, but one of them didn’t meet the GPA minimum we had for this job, so we went with the person who had the higher grades. 3 months later we had another opening for a related role, but one without a GPA minimum and reached out to the “B” candidate, who was excited to hear from us and was soon hired for the new role.
Fast forward a couple of years: our “B” candidate is considered highly successful, hard-working, totally engaged and, if we’re honest, a better fit for our culture than the “A” candidate was. “A” is already gone and “B” has been promoted.
Keep the resumes of the people you almost hire. When we are lucky enough to get two (or more) good people, we know to keep tabs on the ones we didn’t hire (this time). We guarantee you will eventually have a place for them and, when you do, they will be so appreciative that you actually “kept their resume for future opportunities” and called them that you will have a loyal employee for a long time.
Cultivating your pipeline of talent happens long before you post an opening. It’s not what you post, it’s who you know. Keep track of the people who impress you and who have that special something – and ask everyone in your company to do the same. After all, we still believe that at heart, everyone is a recruiter, including you.