Tuesday, February 26, 2008

The Referral Bonus

No doubt there are often various attractive perks in working for a small or large company. However, for me I feel that the referral bonus has always had a great appeal. I mean the requirements seem very simple. Step 1 - find someone looking for a job (statistics show that a large percentage of people are always looking for a job even if they have one). Step 2 - sell the company that you work for to that person. Step 3 - tell your internal recruiter that you like this person and they should be hired. Step 4 - get that person hired and hope they work for 90 days or however long it takes for you to get that bonus. Easy right??

In the past 5 years in the IT/Project Management Industry, I have not been able to get 1 single person to transfer their employment to the company that I worked for. And not to be boastful, but I have a good amount of 'friends circles' and business relationships. I discovered this list of Do's and Dont's for an effective Business Referral Network and I can say honestly that I comply with every suggestion.

Part of it is most likely because I look to work for small-niche like companies that are not compelling to the mass amount of job-seekers. But there has to be more to this puzzle than that. So recently I've devised a new strategy, the referral bonus. Often times my company will raise the referral bonus to what I think is an appealing amount, for the networking effort I would have to put in to get someone interested and hired. I have begun to offer a percentage of such bonus as another incentive. Kind of like my own signing bonus for friends/contacts who are looking for a new job. So, for anyone reading and interested and looking for a job, i'll agree to an extra $500 (20% of the total) upon acceptance and employment for more than 90 days. Will pretty much try anything at this point, think it will work?

4 comments:

Javaid said...

Bryan, you may be able to promote your company and the open positions using LinkedIn or other networking sites in addition to what you are currently doing. Another thing that I noticed works well is placing ads in big bookstores like Border's or Barnes & Noble. You'd be surprised at how many IT types hang out at these stores and read the bulletin boards. Good luck!

Jasmin said...

If I weren't a full time grad student, I'd probably take you up on your offer! But with regards to your question as to why referrals don't always work out, I'm sure there's a number of different explanations. But on an intuitive level, I wonder if it isn't because of the pressure placed on both the current employee providing the reference, and the friend/potential future employee. If you refer someone, that person not only has to impress the employer, but also you to a certain extent, since there's a personal relationship there and expectations to be met. But then if you refer someone who gets the job and then messes up or quits, then that reflects poorly on you. Then again, for someone seeking employment, it's a great way to get his/her foot in the door.

Olu said...

Bryan, what positions do they have to offer. I am currently exploring new career opportunities, since the company that brought me on initially told me this was a long term position but less than a month into the position the government COTR told me that I was only funded for six months or whenever the money ran out, whichever came first. I started on this contract in December. By the end of the spring semester I will be looking for a new job. I like incentives too tell them to throw in a sign on bonus or if the benefits are good I am sold. The company I worked with prior to this one gave up to $12000 referral bonuses for prospective employees, the only problem was finding cleared people (security clearances).

Reasons why a lot of these referrals dont work is that one someone already has a person in mind for the position and they are just going through the formalities of doing the normal fob posting and employee selection process. Another reason is a lot of people dont like to interview and they stay in positions so long that they may feel like they lack the skillset to work in another position. Just a thought. Send me your email address and I will send you my resume if I see a position that I like.

Will A. said...

Sounds like a good incentive Bryan. The only question i have is whether your company will allow you to offer a percentage of the bonus to the candidate. The referral bonus incentive has also been of interest to me in the past, but like you i have not been so successful in wooing talented individuals. It always seems that i get resumes that are either not great for the position (most of the time) or when i do have a good resume we are in a slow recruiting phase. An idea just struck me as i am writing this...i should be like most executive firms and keep in touch with some of my old colleagues on a site like LinkedIn...afterall i have realized that i usually get most of my referrals from them anyway...i may as well be more aggressive in the pursuit as well as bring more clarity on what types of resumes my company is looking for.