Why Recruiting Incentives Don’t Work

Recruiting incentives don’t work.

And by recruiting incentives, I mean financial rewards you offer your agents for helping you recruit agents from other companies.

Now, to be clear, I’m not talking about the recruiting incentives offered by companies like KW, eXp, and Exit.

Their incentive programs are national and are core to both their cultures and compensation models.

No, the recruiting incentives I’m talking about are one-off programs offered at the local brokerage level. They typically involve rewards of a few hundred dollars (or something comparable).

And they don’t work.

Sure, they might produce some results. But, you’ll generate far more referrals if you DON’T offer incentives than if you do.

And I’ll give you two reasons why that’s true.

You Don’t Have Those Agents

Companies like KW, eXp, and Exit have national-level recruiting incentives at their core. And, they devote significant resources to promoting those incentives.

They have testimonials and success stories from agents who’ve made hundreds of thousands of dollars from recruiting.

They put those agents on stage during their conventions.

They distribute pictures of massive incentive checks.

In short, they do everything possible to attract agents interested in recruiting for money.

So it’s only natural most incentive-motivated agents join one of those companies.

And that has an important implication for you.

It means, almost by definition, most of your agents are NOT incentive-motivated.

Intrinsic Vs. Extrinsic Motivation

Ok, so you know it’s unlikely you have a bunch of incentive-motivated agents on your roster.

It still can’t hurt to offer the incentive, right?

After all, even if the money motivates just a handful of your agents, it’s better than nothing.

If only that were true.

Because offering the incentive can hurt you.

Reams of research exist on the science of motivation. And we know two types of motivation exist.

The first type is intrinsic. It’s internal, self-motivation.

The second type of motivation is extrinsic. It’s the “carrot and stick” system of external rewards and punishments.

Intrinsic motivation is more powerful than extrinsic motivation.

And here’s why that matters for recruiting.

Assuming your agents are fans of your company, they want to refer agents to you.

They want to work around people they like. They want to see you succeed.

They’re intrinsically motivated to recruit on your behalf.

But when you start an incentive program, you replace that powerful intrinsic motivation with the weaker extrinsic motivation. Because now you’ve made money the reason to recruit.

And the result is agents who would normally refer to you without any incentive will no longer send you referrals.

They don’t care or don’t think about the money.

So, they don’t care or don’t think about recruiting for you.

P.S. – The best way to get your agents to recruit on your behalf is to make them fans of your company.

Provide great service. Support them. Build relationships with them.

Then, ask for referrals on a regular basis.