This is a guest post from David Folwell, founder of Staffing Referrals, an automated referral management platform and BHN Rewards partner.
If you’re a staffing agency tapping into referrals to source high-quality job candidates, you’ve no doubt encountered one of the most common challenges — deciding how to reward your ambassadors. Choose incorrectly, and those ambassadors might send their referrals to your competitors instead.
There are many ways to incentivize referrals — from cash bonuses to charitable donations to extra employee perks — but the vast majority of people who participate in referral programs prefer monetary rewards (80%, according to our research). And with the slow, tedious delivery of check payments, gift cards stand out as one of the best ways to reward referrals.
Here are a few reasons to incentivize referrals with gift cards, as well as some tips for making the most of this type of reward.
Sure, you could just add a little extra money to your employee’s paycheck to reward their referrals — but would they even notice? That money goes straight into their bank account, meaning they’re likely to spend it out on everyday things like rent, bills, and groceries.
A gift card, on the other hand, creates a memorable experience that people will associate with your brand. That money is set aside so ambassadors can treat themselves to something special, rather than use it to cover expenses.
If you’ve been struggling to decide what type of referral bonuses to give, gift cards can be a great way to present your ambassadors with options. With digital gift cards, they can choose from a list of retailers, restaurants, or services, so they can spend their reward at their favorite places. Or you can expand their options even more with Visa and Mastercard prepaid cards.
There are a lot of factors that go into finding the perfect amount for your referral bonuses. But the good news is, if your recruiters have put in the time to build positive relationships with the talent they work with, those contractors will be happy to refer their friends to your open jobs. And a $100 gift card may be enough to motivate them.
Gift cards make it easy to experiment with different values and find the ideal amount for your agency and your ambassadors. So if you start with smaller rewards and aren’t getting enough referrals, you’ll know it’s time to bump up the value of your gift cards till you find the sweet spot.
Timing is everything in referral rewards. Your ambassadors aren’t going to want to keep referring candidates to your agency if they aren’t getting rewards on time. On the other hand, if they’re paid as soon as all conditions have been met, they’ll want to send more referrals and keep earning.
Delivery of digital gift cards is instantaneous. Ambassadors won’t be waiting for a check — they can accept the gift card and use it right away. And each on-time delivery is a deposit in the bank of trust, building loyalty among your ambassadors and keeping the referrals flowing in.
If you’re getting referrals only from current employees, it might not seem like much to cut them an extra bonus check. But things get complicated if you have referrals coming in from former employees, candidates still in the hiring process, or other people who aren’t on your payroll.
In this case, digital gift cards offer the best of both worlds — they provide the spending flexibility of a cash payment without the hassle of setting up a direct deposit or processing, printing, and mailing a check.
With checks and deposits, ambassadors who aren’t on your payroll might feel uncomfortable providing their personal and financial information to receive their payment. This is especially true for non-employee ambassadors receiving less than $600 in a calendar year, who won’t need to report it as taxable income.
With virtual gift cards, you won’t need to gather much information from ambassadors for these smaller amounts. An email address is usually all that’s required for a smooth transaction.
Once your referral program takes off and you have more and more ambassadors waiting on rewards, it can become time-consuming to keep track of who’s met the criteria to receive their gift card, who’s accepted their reward, and who’s left their reward unclaimed.