Dr John Sullivan Talent Management Thought Leadership

“Recruiting is just sales with a crummy budget.” So why haven’t recruiting leaders learned a lesson about incentives from their company’s sales function? Because sales leaders consistently operate under the proven idiom of “what you reward gets done.” So at least to me, everyone in the talent world should be questioning why corporate recruiters get the very same compensation each year, regardless of whether they have produced exceptional, mediocre, or barely acceptable recruiting results.

Performance Incentives Have An Amazing ROI

Because performance incentives have been around for so long (outside of corporate recruiting), there is already an abundance of research on their effectiveness. For example, the latest research reveals that incentives will increase employee performance by a minimum of 25%. And up to a whopping 44% return. That means that with the typical recruiter bonus of 15%. The recruiting function that begins offering incentives might receive a nearly triple return on its initial investment… “drug-dealing level of ROI.” Leaders should be actively considering adding any recruiting practice that returns this multiple over its costs.

The Many Benefits Of Corporate Recruiter Incentives

Since I last wrote about the value of corporate recruiter incentives back in 2007, the corporate cycle of offering and then dropping recruiter incentives is once again on its downward leg. That means it’s become quite rare for corporate recruiters to be under a bonus system. So, in case you’ve forgotten them, here are some of the many benefits that emanate from a program that offers corporate recruiters a performance incentive.

1. The assumption that every recruiter is “acting professionally” was never true – after years of research, I have concluded that the primary reason why corporations fail to incentivize their recruiters is that recruiting leaders simply assume (falsely) that, as professionals, each of their recruiters is automatically putting out their maximum effort and they are also using the latest tools. Unfortunately, most leaders make that assumption without data to back it up. And even if each recruiter were putting in their expected effort. Offering rewards has still proven to further increase employee performance by a minimum of 25%. In addition to increasing effort, these incentives have the added benefit of continually pushing each recruiter to improve their tools, skills, and capabilities at the fastest possible rate. 
2. We already know that incentives work in other areas of recruiting – obviously, incentives have been effective for years at agencies and executive search firms. Within the corporate recruiting function, we already know that incentives have had a positive impact on performance because we have long used incentives in order to increase our employee referrals. And on sign-on bonuses to improve our offer acceptance rates.
3. Recruiter incentives will have an impact right away – long before you actually begin to pay out any performance bonuses. The fact that everyone will begin talking about, measuring, and rewarding exceptional hiring will cause your recruiters to immediately begin changing their work behaviors. So almost immediately you will begin to see a gradual improvement in your hiring results. 
4. Eventually your company will recruit and hire better-performing hires – once your rewards kick in, everyone will begin to focus on whatever is being rewarded. So the implementation of a recruiter incentive program will certainly cause everyone to shift their focus away from “just putting in effort” and toward producing exceptional hires. This new result might not be possible unless everyone contributes to improving each of their recruiting sub-processes (i.e., job posting, resume screening, interviewing, and effective closing). I have found that combining individual rewards with improvements in each recruiting sub-process will eventually increase on-the-job performance (i.e., the quality of hire).
5. Offering incentives will improve recruiter retention – as an added benefit. The combination of emphasizing recruiter excellence and giving your top-performing recruiters extra money. You will likely reduce voluntary turnover among your recruiters by up to 40%. And when your other top-performing employees see this emphasis and the offering of incentives as a company trend, it may also reduce the turnover of the other employees who are not recruiters.
6. Offering incentives will likely impress your top candidates – top candidates almost uniformly expect to work in a performance culture. So when your candidates for other jobs learn that you incentivize your recruiters (which is unusual), many candidates will take that practice as an exciting indication that they will be joining a performance culture. And not only will that thought improve your current candidate offer-acceptance rate. The fact that your company clearly has a performance culture will likely attract other top performers (across all jobs) in the future.
7. Offering incentives will attract the very best recruiters to your company – the very best performing recruiters also prefer a performance culture and a performance-based recruiting function. So, once the word spreads among the recruiting community that your recruiting function is performance-based. The best recruiters in your industry will take notice. Many will put your company on their “someday I’d like to work there list. As a small side benefit, offering these incentives will likely also cause some of your poorest-performing recruiters to be paid less than others. And will likely cause them to look elsewhere for a job. Over time, together, these factors will dramatically improve the overall strength of your recruiting team.
8. These incentives will also improve the behavior of your hiring managers – without recruiter incentives. In too many cases, hiring managers tend to get everything that they want. However, your incentivized recruiters will now have multiple reasons to push back against hiring managers that act outside your function’s established rules and practices. That strong recruiter pushback against noncompliant hiring managers will eventually improve hiring manager behaviors and their overall results. 
9.  Adding “pay at risk” will build recruiting’s internal reputation – because the recruiting function’s reputation among executives has not always been the strongest. The fact that executives love risk-takers will impress your executives. And that, coupled with the fact that you are reporting significantly better recruiting results. Will likely boost recruiting’s internal image, as well as your total budget.
10. Collaborating with the sales function may lead to additional learning – by all accounts. The corporate sales function (from the management perspective) is much more advanced and data-driven than the recruiting function. So, building an alliance with sales will likely also lead to additional learning on shared problems. This includes how to attract better prospects, how to train recruiters, how to get the most from candidate research, and how to close difficult deals. As a final benefit, this close collaboration with sales may also lead both parties to hire better salespeople and, eventually, increase sales revenue.

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Why Incentives Are So Effective, Fully Explained

We know that recruiter incentives are highly effective. In part, because executive search firms and agencies have used them successfully for years. In addition, there is also a great deal of science supporting why paying incentives have such a powerful impact. They work because incentives are a form of goal setting. And as another form of communication, this reward structure will remind everyone that producing extraordinary results is a priority goal. Incentives also work because they unambiguously connect employee effort to rewarded outcomes.

Because they are talked about frequently, performance incentives also increase employee engagement and focus. Next, publicly paying out incentives is an additional form of recognition that every employee will notice. Finally, remember that you will be giving your top recruiters more money, which will likely improve retention. I would also note that, outside of dramatically improving your employee referral program and rewarding hiring managers for great hiring. It’s hard to think of any other change in the recruiting function that would come close to improving your recruiting results by such a huge margin. 

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Implementation Tips For A Recruiter Incentive Program

If you wish to move forward with developing and implementing a formal program that offers bonuses for exceptional recruiter performance. Here are a handful of implementation tips.

• A benchmark organization to study is the U.S. Navy – a hiring organization that excels at recruiter incentives is the U.S. Navy. 
• Prioritize the jobs that qualify for an incentive – rather than rolling out bonuses for every open job. I recommend that you start slow by rewarding recruiters who produce excellent results only in mission-critical jobs. And as you learn, add other jobs.
• Assigning your best recruiters to difficult jobs is a critical step – the odds of paying a performance bonus are greatly reduced when you assign a difficult job to a recruiter with mediocre skills. Make it a critical first step in your process to ensure the recruiter assigned to a difficult open job has a reasonable chance of producing exceptional results.
• Design your incentive process by benchmarking against other internal incentive systems – when you are designing any new incentive program, don’t start from scratch. Instead, ask for help directly from your own sales function. Other functions are also known to provide strong incentives to their employees, including customer service, safety, finance, and supply chain. You might also seek incentive advice from your external recruiting agencies and executive search firms that your company uses.
• What should you reward – you should only be rewarding extraordinary results, and not intermediate steps. And it’s also a wise idea to place a quality standard on each of your incentivized results (i.e., quality of hire).
• Make sure that your reward process is transparent – you can avoid a lot of internal criticism, turmoil, and gossip if you make your reward process totally transparent. It’s also a smart idea to involve everyone in the program’s design. Widely distribute information on who actually receives recruiting incentives.
• Offering too high of a bonus can create unintended disruptions – putting too large of an incentive on the table can cause recruiters to go beyond the norm. To the point where they no longer collaborate, follow rules, or share best practices. In extreme cases, they may even sabotage each other. And if you experience disruption, you can expect it in the areas of candidate experience, customer service, documentation, branding, and legal issues.
• Be aware of potential cheating – be aware that most recruiters are highly competitive. It won’t be unusual for some of them to attempt to “game” the incentive process. So, it’s critical that the recruiting function has a method for identifying and punishing cheaters within its own ranks.
• If there is no bonus money in the budget, be creative with your rewards – if you don’t have enough upfront money to pay for bonuses. Consider borrowing some budget funds from your agency or advertising budgets. Alternatively, start by rewarding top performers with “first choice” options, like preference for their next recruiting assignment or first choice of vacation time.

Final Thoughts

Although offering incentives to corporate recruiters has always been an excellent idea, in reality, this practice tends to gain support in the corporate world when recruiting is a number one priority and recruiting budgets are flush with cash. Unfortunately, I have found that these incentives are among the first to fade away when recruiting budgets are cut. In fact, sadly, it is quite common for powerful recruiting functions to dismantle themselves during these extended budget cuts. Unfortunately, that permanently weakens a corporation’s employment brand and its recruiting team’s capabilities at least once each decade. 

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Notes for the reader

This is the latest article from Dr. Sullivan, who was called “the Michael Jordan of Hiring” by Fast Company.

Please help spread his ideas by sharing this with your team/network and posting it on your favorite social media.

Dr John Sullivan is its author – it first appeared in the 9/15/26 issue of Aggressive Talent Management.