Recruitment Bonus

lam · August 2002

I work for a technology company in the Northeast with about 240 employees. We are currently revising some of our policies and I wanted to get a sense of what other companies are offering in terms of a recruitment bonus these days.

Don D · August 2002

We have what we call a "Referral Rewards Program". The payout is as follows: Sales and Engineering $500. All other salaried positions $300. All hourly positions $50. We explain that the variance has nothing to do with the degree of value of the job to the company, rather its based on degree of difficulty recruiting excellent replacements. All staff may participate with the exception of officers of the company AND HUMAN RESOURCES STAFF. I intentionally excluded us to add credibility to the program. The rules are simple; the application has a space to identify who one knows at the company and who might have referred the applicant. If the individual is hired and is still in the position six months later, the payout is made, less taxes. Here's a strange, unexpected twist: One hourly ee has successfully referred nine candidates. Rather than accept the rewards himself, he tells H.R. to give the reward to his recruit. His statement was, "Give it to them. I do this because I want to work beside good people, not for the reward, the fifty bucks will make their day."

Pork · August 2002

Our company is 200 strong and located in 15 locations and rural communities. It is the recruiting bonus program that brings to us our strongest candidate of friends and relatives of those that are current quality employees. We have a 60 day orientation/training period in which we pay the referring employee $100.00 after the referred employee has completed his/her 60 day training period. After the referred employee is on-board for 6 months we will pay the referring employee another $100.00. It works and it is unlimited in the number an employee can refer. We pay it to management and labor regardless of their position. We encourage the management team to recruit their own candidates when ever possible. We have a referral form for our employees to fill out and we reach for these first when we start to recruit. The referral also has a portion at the bottom to keep the suspense information posted and the form moving through a suspense date file system. Good Luck, Please post your system so we two can have the value of your responses. Your program may be better and of greater value than ours!

KDowney · August 2002

My company is also located in the Northeast, and is an engineering/hi-tech company with approximately 600 world wide employees, with about 400 of them located in the U.S. From what I have seen, we offer one of the more aggressive referral bonus programs. During any 12-month period (from the first referral's hire date), any full time or part time employee who refers a candidate who is subsequently hired for a full time position (either exempt or non-exempt) receives:

$3000 bonus for the 1st referral hired
$6000 bonus for the 2nd referral hired
$9000 bonus for the 3rd referral hired
$12000 bonus for the 4th referral hired, and so on....

The bonus is paid out when the referred employee completes 90 days of service, and only if the referring employee is still an active employee.

Currently, no bonus is paid to employees who refer immediate family members. We consider immediate family members to be: spouse, child, parent, grandparent, grandchild, sibling, in-laws, and domestic partners. The executives (Director level and above), Human Resources staff, and managers filling positions reporting to them are not eligible to receive referral bonuses.

Right now, since the company isn't hiring much, not many bonuses are going out. But back in the late 90's, with the hiring frenzy and competion for candidates, we actually had one employee earn $18,000 over 12 months because 3 individuals he referred were hired!

That was a nice chunk of change, but as of right now I don't see that happening again any time soon... x:-)

Don D · August 2002

That sounds indeed like an agressive program. But, I'm wondering if that large bonus potential invites any sort of corruption of the program. How do you ensure it's integrity?

KDowney · August 2002

I said it was aggressive....I never said it had integrity x;-)

There are some aspects of it that I feel do indeed need to change, but for the most part we haven't had too many issues.

The applicants that are referred go through several rounds of interviews with HR and the management chain of their particular department. If someone doesn't make the cut, then they don't make it back for the next round of interviews.

The only major problem I have run into with it was one Director who referred an employee, but then told him to tell HR that another employee referred him, and then both the Director and the other employee would split the bonus. This was discovered after both the Director and the other employee had already left the company (one on his own accord and one who was "helped" out the door so to speak). Beyond that their haven't been a lot of issues surrounding the program.

I think when the program started the company felt it was a good alternative to paying high commission fees to outside recruitment agencies. The largest population of our workforce are engineers in a very specialized field, so I think management thought they would be the best resource to find others of similar abilities. Rather than have separate bonuses based on position level, or exemption status, they made it an across the board program; which in my opinion helped eliminate some of the "why is he "worth" more than me...etc." mentality that was here before.

Recruitment Bonus

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