Should You Use Your Employees to Recruit New Employees?

In this video, Matt reacts to a video of a person talking about the benefits of having current employees recruit new employees. While this may work for some industries, Matt doesn’t think it works for all or even most industries. Watch this video to get his thoughts. 

There are tons of people out on social media giving business advice. Some of it is good advice, but most of it isn’t good. In this series watch CapForge’s owner react to different advice videos. He’s an expert in all things business and has 20+ years of experience under his belt. Some of the things he reacts to might even surprise you!

Video Transcript: 

Business Advice Video:

This one secret can literally make you millions of dollars. We turn all of our employees into recruiters. And we say “Hey, when you bring someone else onto our team through your network, we’re gonna give you a signing bonus.” The signing bonus we give them is one hundred percent of the first year salary of that employee that they brought on. But here’s the catch. You get that paid out 20% over 5 years every Christmas. What this does is it locks in all your top talent. 

Matt’s Review:

Obviously, this is very specific advice for businesses where adding a new employee is very difficult and adding a new employee brings in a high dollar amount. I also wouldn’t agree necessarily that it makes people stick around for the five years to get their full payout. I also wouldn’t say that it necessarily means they’re gonna bring all the best people. And if I can find you five people each of whom get $100,000 a year in salary and I get 20% of that to start, even if they all quit year two. I’ve still made $100,000 and I don’t care that much that they quit cause now  I’ve just become a recruiter. I don’t really care what my day job is. Now I’m just a recruiter cause I make more doing that than I do doing my day job. So I’m not sure that I really agree with this. I think it’s for very specific situations. And it’s not something that most people could put into play in their own businesses. This is very specific to the kind of business that this guy has. And the kind of people he’s trying to recruit. And the economics that work for him. But I don’t think it’s something that most people are gonna be able to take and run with.