SF Startup Takes on Recruiters By Upping Referral Ante

20k employee referralWith a shot over the bow at recruiters, a Silicon Valley startup looking to hire software engineers — and not just any kind, but those with special experience in search, especially those coming from Google — is offering one of the richest hiring bounties in the industry.

For referring an engineer hired by ThoughtSpot, the company will pay $20,000. The deal is available to anyone working for the company, or not, including “friends of the company” and employees’ family.

“Our thinking was people don’t listen to recruiters,” CEO Ajeet Singh told the San Francisco Chronicle. “But they listen to their friends.”

The very pricey referral fee — richer by a factor of four or five or six over what most others pay — is less than recruiters charge, Singh said.

Vibor Nanhavati, a company team leader explained the rationale to CBS: “What we have found is that a candidate is most likely to trust the word from a friend or a friend of a friend rather than a recruiter.”

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“We want the best of the best,” Singh said, adding that the bonus was big enough to attract attention, but less than a headhunter fee.“We thought $20,000 was an interesting enough number that a lot of people might actually refer people to us.”

By no means is this the first such juicy referral bonus. Writing on our sister site, ERE.net,  Dr. John Sullivan noted a similarly pricey reward for referring a software engineer in a post two years ago. Other companies, desperate to hire workers with hard to find, in-demand skills, have offered similar rewards. But for some reason, ThoughtSpot’s program caught the attention of San Francisco media, which featured the program a few days ago and the news spread rapidly across the country.

There’s an interesting question that comes up during the interview about the potential for poaching from some of the Valley’s “biggies.” “We’re too small,” the CEO says. But if the program succeeds at ThoughtSpot — and already the company has hired a few engineers through the program — it could turn employee referrals into the equivalent of en employment arms race.

John Zappe is the editor of TLNT.com and a contributing editor of ERE.net. John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.