When implemented correctly, a finders fee can bring the best clients and top-notch future employees to your doorstep.
We are all familiar with finder’s fees in one capacity or another. If you have ever offered a reward for a lost dog, recruited a friend to live in your apartment building for the cash incentive, or found the next best candidate at your company for a bonus… then you have participated in a finders fee strategy
Finders fees or referral fees are typically thought of as a mutually profitable deal for the finder, and the party seeking assistance. Whether you are a small business looking to recruit an executive or an individual with clients they would love to refer, finders fees are a great strategy to move any business process forward.
Who uses Finders Fees?
Companies who are looking to grow their roster or client list will often implement a finders fee strategy. In most cases, finder’s fees are used as a referral program for contacts who introduce new clients or new employees to the company.
While finder fees are a generally accepted method of progressing business, they can be somewhat informal. If you find yourself paying (or getting paid!) these fees regularly, it may be time to implement a more formal strategy…. Such as hiring a headhunter or recruitment agency with a contract and formal arrangement in place.
Determining the Fee Amount
Finders fees are paid after the “finder” successfully finds a solution to the need. As you can probably guess, the more money you put behind your fee, the better your search results (after all, those who are incentivized with big paychecks tend to look a little harder!)
Budget aside, keep these items in mind when determining the fee amount:
- Price of the goods, services, or position being marketed
- When the payment is made
- How long the sales process will take
Consider this criterion and talk to similar businesses who have participated in a finders fee strategy. They will be able to point you in the right direction based on your industry, the size of your company, and the client or position you are searching for.
Why should I implement a finder’s fee?
In many cases, a finder’s fees encourage the intermediaries to go above and beyond to find a client, or prospective employee, for the company. The result? Some incredible candidates and partners at your doorstep.
Curious if a finders fee is right for your company, or if a formal headhunting service is a better fit? We would love to hear from you. Human capital is your number one asset, and we make it our top priority.