Companies offer substantial "finder's fees" to staff who recommend a successful new hire.
Companies offer substantial "finder's fees" to staff who recommend a successful new hire.
Thousands of people could be missing out on a lucrative boost to their pay packets, thanks to an incentive used by increasing numbers of businesses.
Wage growth may be stagnant across much of the economy, but a scheme run by some top employers offers the chance to nab as muchas $10,000 in extra cash - without lifting a finger.
Banks, accounting and insurance firms, tech giants, energy retailers, pub barons and even charities offer substantial "finder's fees" to staff who recommend a successful new hire, with bounties in the thousands of dollars common.
Harris Farm Markets co-founder Catherine Harris noted the rise of the practice at a recent business lunch, citing a board meeting where she noted that "every person at the table actually pays their staff to find new recruits".
She vowed to follow their lead at her family's grocery chain, saying the "single biggest inhibitor" to its growth was the challenge of finding "fabulous people".
Hefty finder's fees might sound like a lot of money for nothing, but HR experts say the approach ultimately saves money, bypassing the costly and time-comsuming process of recruiting the old-fashioned way.
This spells good news for well-connected workers looking to line their pockets- while complicating matters for those looking for work, who would be well advised to hone their networking skills.
One of the most generous employee referral programs around can be found at Atlassian, the A$7 billion software development company founded by university mates Scott Farquhar and Mike Cannon-Brookes.
The Australian tech giant offers a whopping $10,000 bonus to staffers who recommend a new hire for one of the industry's notoriously-hard-to-fill roles.
The only catch is that the cash is paid over four years, and the payments stop if one of the parties leaves the company.
Atlassian's global head of talent acquisition Robert Allen said about one in ten new recruits came through the program, which helped ensure new hires were "the right cultural fit".
That means ascribing to the "open company, no bulls***" ethos, or be unceremoniously shown the door.
HR experts say the approach of offering finder's fees ultimately saves money. Photo / 123RF
"If we treat the entire workforce as recruiters, we are widening the net and really improving our chance of getting people who are a fit for Atlassian through the door," Mr Allen told news.com.au.
"They are often people who are already living and breathing our culture."
Most vacancies at the fast-growing company were highly skilled and specialised roles, and candidates were often interviewing at several different companies.
"Referred candidates are often only interviewing with us because we've approached them, so the process is a lot quicker," he said.
"The cost of paying the bonus is far outweighed by the benefits, and there is often a longer lifetime of employment."
Once an experimental HR practice, employee referral bonuses have been embraced by major employers from Bankwest, PwC and Energy Australia to Sony, Medibank, Merivale and Crown Resorts.
Deloitte has previously said referrals accounted for about 40 per cent of its new hires, saving millions of dollars in recruitment costs.
The cost of paying the bonus is far outweighed by the benefits, and there is often a longer lifetime of employment.
Incentives range from gift cards and raffle tickets up to cash payments in the thousands of dollars, with bigger bonuses paid for hard-to-fill roles.
Reward Gateway employee engagement specialist Kylie Green recommends the practice to the more than 1500 companies she works with, saying it "makes business sense" and gives recruitment managers confidence in their new hires.
With external recruitment typically costing up to 20 per cent of the new hire's salary, she said, employee referrals often cost less, while giving "more insight into the candidate's cultural fit".
"You get much more insight this way than you would in an interview environment," she said, adding that staffers would only recommend someone who they felt would reflect well on them.
"A lot of the time it's someone they've experienced in a previous working life; they've seen them in action and they know the motivation and drive of the individual and what they can contribute."
The rise of employee referrals is yet another reason to milk your network and increase your chance of being head hunted - something many job hunters neglect to do.
A recent survey by LinkedIn revealed that less than half of Australian professionals were likely to reach out to their wider contacts when contemplating their next career move, despite saying it was "a good idea".
LinkedIn spokesman Shiva Kumar said staying in touch with ex-colleagues was a simple but powerful way to increase future job opportunities.
"While you may find it hard to stay in touch, don't underestimate the incredible power of your professional network," Mr Kumar said.
"These connections can be your way in to finding your next job or career opportunity."
The numbers suggest that shying away from networking could mean missed opportunities to progress up the career ladder, with more than one-third of people surveyed reporting that a "casual conversation" led them to a new job.
