Ask Barb: Should I Offer Referral Fees?

Dear Barb:

I recently listened to a podcast you did and want to thank you or all your good work. I believe I heard you mention something about referral fees becoming difficult due to recent regulations and therefore you might have suggested to stay away from offering them, or you might have suggested an alternative, but I didn’t quite catch the entire point of your statement.

Can you expand for me on what you said about referral fees? Or alternatively, can you direct me to some documentation I can read to get a better understanding of how I can or cannot engage in offering/paying referral fees?

Katie W., Paramus, NJ

Dear Katie:

I mentioned that many “clients/hiring authorities” cannot accept gifts from customers. This is due to many new regulations established after numerous scandals. Often, that eliminates our referral fees since they might be considered a gift. An alternative is a donation to their favorite charity in their name.

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We offer clients three options if they refer another client to us that hires from us.

  1. Donation to their favorite charity
  2. Gift certificate to a place of their choice
  3. Reduction of $500 toward their next placement (good for 12 months)

The amount you donate depends on your average fee. This donation is only made after the new client hires someone from you and pays your fee. We also print up a plaque and have the charity present the plaque to the client.  This idea resonated with our clients and our client referrals increased greatly in the first six months after we implemented this program.

Barb Bruno, CPC, CTS


Would you like to Ask Barb a question? Email her at support@staffingandrecruiting.com. Each month in The Fordyce Letter print edition, Barbara Bruno answers questions from individuals in the Recruiting Profession. We will bring you some of these Q&A responses from Barb each week on FordyceLetter.com.

Barb Bruno, CPC, CTS, is one of the most trusted experts, speakers, and trainers in the Staffing and Recruiting Professions. If you want to receive FREE training articles from Barb, sign up for her NO BS Newsletter! Barb has spent the last twenty years focused on helping Owners, Managers, and Recruiters increase their sales, profits, and income.

Her Top Producer Tutor web-based training program jumps-starts new hires and takes experienced recruiters to their next level of production. Barb's cutting-edge program, Happy Candidates, provides you with a Customized Career Portal in less than 10 minutes. Happy Candidates allows you to help the 95% of candidates you don?t place and eliminates the greatest time waster in your business.

If you'd like to contact Barb, call (219) 663-9609 or email support@staffingandrecruiting.com.

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