Referral bonus - to be or not to be
I think that each of you at least once met with such a concept as Referral bonus, and maybe became its happy owner. If you suddenly haven’t received such a bonus yet, just in case, I’ll remind you: Referral bonus means I (HR) and my colleagues understand the bonus that is paid to a person (both an employee of the company and any person who is not part of the company’s staff) who has been torn to pieces HR-s recommended to a friend or acquaintance, who eventually became an employee of the company.
Today, companies practice several options for paying such bonuses, the most common of which are:
The use of bonuses for recommendations, as a rule, is aimed at achieving one of the goals:
Despite the attractiveness of such bonuses, there are certain risks associated with their use.
To begin with, for good $$$$ company employees and everyone else who received information about an urgent vacancy, willingly become freelance HR-s and are sharply activated in search of a "body", including actively distracting from the main work. And so, in the end, you no longer have 2 HRs, as usual, but an entire team playing the "whose friend is cooler" lottery.
Some companies directly breed network marketing: get a percentage of the recommendations of your recommended in the future.
Now, if I were lured to another company, and I knew that the inviter would receive a box of cookies and a jar of jam for my head, I would doubt the sincerity of good intentions both on his part and on the part of the inviting company, which adds to them pluses in karma. And you think to yourself: “even if theyinvite bonuses with red cowards for interviews in this company , it’s probably people just don’t go there, hmm ... it seems their karma is not important ... I’ll go to the neighbors.”
It is also naive to think that when a tasty carrot looms in front of the scalp hunter in the form of a bonus for each head brought, the newly-minted assistants will be too picky in choosing candidates. The temptation is too great to recommend everyone in a row ("what if they take it?"), Which reduces the likelihood that the candidate will really be suitable. And it takes a lot of time to talk with such “candidates”.
In addition to all, the people atrisk of switching to the dark side of the force begin to trick in various ways and come up with various "black schemes":
On my own behalf, I’ll say: bonuses, as a tool for obtaining recommendations directly from the company’s employees, are most effective when they are used rarely, precisely, and in the case when the vacancy needs to be closed “yesterday”.
If this approach is not practiced every day, the news about the next urgent vacancy with bonuses for recommendations will be read and perceived by employees with awareness of the importance and urgency of the issue and encourage them to act. In this case, employees understand that the company really urgently needs help in closing the position and this is not another attempt by the personnel department to blame their own work on someone. In such a situation, HR freelancers are usually connected to the search and all those to whom the news has become available, which significantly expands both the search area itself and its speed (instead of two HRs, even for 2 hours, they become several times more).
Connecting external sources usually gives lower quality candidates, not because they are “bad”, but because they are less likely to “merge” with the company.
It is clear that completely different situations may arise. Somewhere bonuses for the recommendations of employees or external specialists are simply vital at certain stages of the development of the company, as they allow you to increase the rate of recruitment without hiring recruiters in the state (which in itself requires time and cost).
I know, for example, that there are companies in which, according to paid recommendations, they close about 50% of vacancies, or even more.
Regarding the company in which I work myself, I note that in her glorious history there were years of work with bonuses for recommendations and years of work without them. At the same time, the number of positions closed on the recommendation of employees was approximately the same in both cases (about 35%). So it turns out, as in advertising: "if you can’t see the difference - why pay more?" It is better to actually spend this money on modernizing the office, gifts for employees, corporate parties and other amenities. Indeed, the more pleasant the company is working, the higher the probability of attracting real mega-bison of management, development and testing to the team.
As a HR person, I am pleased to realize that when inviting a friend to a company, my colleagues often do this because they like the company and want to share a “warm place” with a friend. They are happy to recommend their friends for free. But the bonuses used only in exceptional cases help to reach the 2nd, 3rd and further circles of acquaintances of my colleagues, which increases the number of recommendations.
Summing up, I will say a few words about the pros and cons, which are characteristic of bonuses for assistance in hiring employees.
Pros:
PS I quote above, including the thoughts of colleagues expressed on this topic and passed through the prism of their own perception of HR-IT companies with 2 years of experience.
Today, companies practice several options for paying such bonuses, the most common of which are:
- 100% bonus payment immediately or after passing through. term by a new employee (usually 3 months);
- payment of a part of the bonus of 50% after going to work and 50% after passing sp. term;
- a variety of bonus payments for all who just came for an interview (usually small amounts);
- Payments to the “recommender” of oneself, usually a joining bonus or a transfer bonus.
Goals
The use of bonuses for recommendations, as a rule, is aimed at achieving one of the goals:
- close the vacancy with the deadline "yesterday";
- find a rare specialist listed in the Red Book;
- to find a competent specialist who fits perfectly into the corporate culture;
- just find the right specialist.
The risks
Despite the attractiveness of such bonuses, there are certain risks associated with their use.
To begin with, for good $$$$ company employees and everyone else who received information about an urgent vacancy, willingly become freelance HR-s and are sharply activated in search of a "body", including actively distracting from the main work. And so, in the end, you no longer have 2 HRs, as usual, but an entire team playing the "whose friend is cooler" lottery.
Some companies directly breed network marketing: get a percentage of the recommendations of your recommended in the future.
Now, if I were lured to another company, and I knew that the inviter would receive a box of cookies and a jar of jam for my head, I would doubt the sincerity of good intentions both on his part and on the part of the inviting company, which adds to them pluses in karma. And you think to yourself: “even if they
It is also naive to think that when a tasty carrot looms in front of the scalp hunter in the form of a bonus for each head brought, the newly-minted assistants will be too picky in choosing candidates. The temptation is too great to recommend everyone in a row ("what if they take it?"), Which reduces the likelihood that the candidate will really be suitable. And it takes a lot of time to talk with such “candidates”.
In addition to all, the people at
- to offer a “share” to the candidate himself;
- the candidate himself, about to send a resume to the company, is looking for acquaintances there and ... see the diagram above, etc.
Personal opinion
On my own behalf, I’ll say: bonuses, as a tool for obtaining recommendations directly from the company’s employees, are most effective when they are used rarely, precisely, and in the case when the vacancy needs to be closed “yesterday”.
If this approach is not practiced every day, the news about the next urgent vacancy with bonuses for recommendations will be read and perceived by employees with awareness of the importance and urgency of the issue and encourage them to act. In this case, employees understand that the company really urgently needs help in closing the position and this is not another attempt by the personnel department to blame their own work on someone. In such a situation, HR freelancers are usually connected to the search and all those to whom the news has become available, which significantly expands both the search area itself and its speed (instead of two HRs, even for 2 hours, they become several times more).
Connecting external sources usually gives lower quality candidates, not because they are “bad”, but because they are less likely to “merge” with the company.
It is clear that completely different situations may arise. Somewhere bonuses for the recommendations of employees or external specialists are simply vital at certain stages of the development of the company, as they allow you to increase the rate of recruitment without hiring recruiters in the state (which in itself requires time and cost).
I know, for example, that there are companies in which, according to paid recommendations, they close about 50% of vacancies, or even more.
Regarding the company in which I work myself, I note that in her glorious history there were years of work with bonuses for recommendations and years of work without them. At the same time, the number of positions closed on the recommendation of employees was approximately the same in both cases (about 35%). So it turns out, as in advertising: "if you can’t see the difference - why pay more?" It is better to actually spend this money on modernizing the office, gifts for employees, corporate parties and other amenities. Indeed, the more pleasant the company is working, the higher the probability of attracting real mega-bison of management, development and testing to the team.
As a HR person, I am pleased to realize that when inviting a friend to a company, my colleagues often do this because they like the company and want to share a “warm place” with a friend. They are happy to recommend their friends for free. But the bonuses used only in exceptional cases help to reach the 2nd, 3rd and further circles of acquaintances of my colleagues, which increases the number of recommendations.
Summary
Summing up, I will say a few words about the pros and cons, which are characteristic of bonuses for assistance in hiring employees.
Pros:
- quick search for the necessary specialist;
- access to specialists who do not conduct active job searches and are not “listed in social networks”;
- a greater likelihood of “proximity” of the candidate with the corporate policy of the company (in the case of the recommendation of an employee of the company, rather than an outside “well-wisher”);
- there is probably something else.
- considerable financial investments are required;
- the quality of candidates is deteriorating;
- incandescence of an already overheated IT market;
- and that’s probably not all.
PS I quote above, including the thoughts of colleagues expressed on this topic and passed through the prism of their own perception of HR-IT companies with 2 years of experience.