Imagine a long weekend sipping chardonnay in Napa. Shredding pow in Aspen. Lying out on a sandy white beach in Miami. Hanging with Mickey and pals in Disney World.
Those are vivid, real experiences you can imagine. You can situate yourself there in your imagination, turning over the possibilities.
Now instead, imagine $4000. Of course, there's a lot you can do with $4000. But it's much harder to visualize something real, something tangible, with money.
I came across a referral program I thought was pretty darn cool over at Drift. Instead of giving a cash bonus, they're going to send any employee (plus a guest) that refers a successful applicant to anywhere in the U.S. for a three-day-weekend. (Watch the full podcast where I learned about this here.)
That's pretty awesome, and it got me thinking about how companies build great organizations—the people they bring in. Here's why I think their experiment will be more successful than standard incentives:
Employee referral programs are one of the best ways to recruit top talent
It’s no question that to get the best talent, you need a referral program. Employees should have ownership over who they get to work with. Most companies only want to hire the best (of course!) so it's likely that the people you've already hired know other super-talented individuals. Building an employee referral program incentivizes the team to get their friends—and the people they respect the most—in the door.
The reason referral programs exist in the first place goes back to how recruiting works. Usually, for a hard-to-find role, an external recruiter would charge up to 20% of that person’s salary for the first year. And that’s not even guaranteed that you’ll find the right person.
That’s generally how companies justify the expense. But, here's the thing...
Cash isn’t king
Money is a natural incentive. After all, who doesn’t like a little extra cash? Standard referral programs can—and do—work. Some companies even give out as high as $30,000 bonuses (yeah, you read that right).
Whether or not it's right for your company goes back to culture. What patterns and decision-making frameworks are you putting in place for your employees? Does it make sense for them to be motivated financially, or through something deeper?
This is where a lot of people blame millennials for "ruining" traditional incentives. Millennials have learned that money doesn't buy happiness. Experiences do.
So it makes sense for Drift, which bills itself as an experiences-driven company, would go for a less-traditional incentive program. Here's a few others that might get you thinking about what you're offering and why:
- Salesforce offers free baseball tickets or other events (often as a surprise)
- InMobi switched from cash incentives to motorbikes, dive trips, or iPhones and more than doubled referrals
- Raizlabs offers a 4-day trip to one of four set destinations
Ultimately, business is about people and about the experiences you can bring. To get the best results for your business, you need to focus on people and the experiences you can provide them.