The Candidate Referral Bonus Debate

Money Grab
Several times in the past few months during a recruiting calls I’ve been asked if I would offer a referral fee. By no means is this new. Back in my recruiting hard-to-find semiconductor engineers days, this question came up all the time. And still, every time, without fail, I hang up the phone a bit more annoyed than the last time.

I question the person’s professionalism. I feel bad that the referral might not have the opportunity to hear about a career changing opportunity because his friend wants to make some cash off his name. And then I wonder if the referrer did get a recruiter to pay him for a referral if he would ever tell his friend he only recommended him for the job because he got some cash out of it. It just feels dirty.

I don’t ask the doctor, the design firm, the accountant, the babysitter, or any other professional service provider to slip me a cash bonus when I refer someone to them. I’m not their hired sales agent. I make a referral because the service provider has earned my confidence and my friend trusts that I have his best interest in mind.

I know that plenty of recruiters out there pay referral fees and that business model works for them. I also know in 13 years  of agency recruiting, I have never paid out a referral fee and a majority of our placements are candidates who have been referred to us directly or indirectly.

Maybe I’m missing something completely…

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