Let’s Make a Deal: Upping the Ante on Employee Referrals

Aug 17, 2000

“Joe’s great. You’ll really like Joe.” So said your star employee and?voila!?Joe came in for an interview and you did, you really liked Joe. Naturally Joe got the job. Star employee and Joe lunched together daily, and everyone worked happily ever after. The referral process used to be easy. But today it seems that Joe isn’t interested in leaving his happy cube farm, even for greener pastures. And getting any employee, let alone a star employee, to refer candidates is like waiting for the cows to come home. Or is it? According to the Employment Management Association’s 2000 Cost Per Hire/Staffing Metrics Survey, “Employee Referral” is still the recruitment category yielding the best results. Surveyed respondents attributed 30 percent of new hires to referrals. <*SPONSORMESSAGE*> But while referrals may still be a common source of candidates, the current methods are anything but tried and true. Corporate programs now include astronomical dollar incentives and merchandise giveaways, as well as on- and off-line software programs for managing the process. And corporations are not the only ones seeing the benefits of referrals. CareerRewards and are two Web-based referral organizations based on the concept that if you pay them, they will come…with candidates, that is. CareerRewards CareerRewards offers website participants, a.k.a. “CareerRewards members,” the chance to earn between $1,500 and $10,000 when they refer friends and relatives to job postings. These financial incentives, in turn, benefit employers by enabling them to reach a larger audience of qualified individuals, many of whom are passive candidates. CareerRewards also provides a screening service whereby candidate skills and cultural fit are assessed before candidates are presented to employers. According to CEO Doug Layman, while a lot of people see money as the catalyst, CareerRewards is unique in that it also seeks to incorporate three value-added components as part of the search-and-referral process. These components are priority treatment, some assurance of quality [as far as the applicant], and that feeling of personal gratification. Layman says it is his company’s intent to understand why people refer one another and to duplicate those things on the Web. Qualification team members play an integral part in the screening and referral process, says Layman. In its first three months, CareerRewards’ activity has included 350 active searches and over 40 placements. At CareerRewards, a job search is conducted by entering a position title, by selecting a company name from a scroll menu, and/or by selecting a specific geographic location. Referral bonus amounts are listed alongside position titles. Like CareerRewards, employs the concept of employing friends. But although bonuses are also awarded for referrals,’s plan is slightly different. At, there is a communal approach to the reward system. If the hire is the result of a chain, everyone involved shares in the reward. gives the following example to explain the program: Scenario 1. If the hiring company is paying $2,000 for a referral, and you are the only person to refer the winning candidate, you get the entire reward of $2,000. Scenario 2. If you refer the job info to Pat who then sends it to Kris who then sends it to Cathy who gets the job, then Kris gets 50% of the reward (in this case $1,000) and you and Pat split the rest (in this case you each get $500). With more than 75,000 jobs on file, visitors to can search by keyword, job title, industry, or city and state. Positions are obtained by sweeping a company’s Web site and are then posted at Both CareerRewards and bill upon success, although CareerRewards does charge a subscription fee if a company wishes to list a large number of job openings. This fee, however, is deducted from the finder’s fee once a placement is made. Angami While CareerRewards and offer online job postings tied to referral incentives, Angami is an Internet-hosted employment referral system for corporate use. Carl Steffens, Angami vice president of marketing, describes the system as an online tool that complements offline programs. The online tool provides a central point of information, while the offline programs include such things as promotional incentives and internal communications. Steffens says the system, designed to be used by HR management, puts a referral program on the desktop. The goal of the system, says Steffens, is to drive a lower volume of higher quality candidates. “Better quality hires faster,” he says. Angami creates a co-branded site and hosts the system for a monthly fee. The fee is based upon a company’s size. Mutual Reward There are many ways to participate in the employee referral process. Whether you choose to dangle karats in front of your employees, or decide to utilize a referral site and/or referral system, implementing a referral program is a good use of dollars and sense. Because it remains the preferred method of obtaining candidates, there’s ample incentive for including it as part of your recruitment strategy.