Q: Recently I referred a friend, who was hired by my company. My friend is a talented engineer, who probably commanded a six-figure compensation package. When I emailed my friend’s resume, it was submitted under our company’s new employee referral program. Our company’s employee referral program pays us $2500 for each referral who is hired by the company. The payout isn’t immediate, so I think we are supposed to see the money after 90 days.
After my friend started, I was eagerly awaiting my $2500. I called HR because I knew there was a waiting period. I find out that I am not getting the bonus. It seems that a headhunter submitted my friend’s resume and they are paying the headhunter a giant fee. My feeling is that they should pay me the giant fee.
What is your professional opinion?
A: Employee referral programs can be successful recruiting tools for many roles across many industries. Most employees are eligible for these types of programs, unless they are a senior leader, the hiring manager of the vacant role, or involved in the recruitment of talent. Sometimes all of HR is excluded from this type of program too.
Most employee referral programs have “fine print” that helps employees better understand who is eligible for the bonus and what a valid referral might be under the program. I don’t know this for sure, but my guess is that the search firm submitted your friend’s resume first. If a search firm submitted your friend’s resume first, then they should be paid the fee. Of course, your employer would prefer to pay you the employee referral fee as opposed to paying a placement firm a fee. It might be worth asking your friend if they were working with any search firms. Companies prefer not to pay these fees, which is why they launch employee referral programs.
Sometimes employee referral programs will only specify certain roles as being eligible for the program. Typically, these roles are “hard to fill” and require specialized skills. The waiting period that you mention is fairly common; the company wants to make sure that you are still an employee at the 90-day mark and that your referred employee looks like they will be a strong addition to the company.
Before you refer your next friend, read the “fine print” that shares the rules of the program. Additionally, before referring a friend, ask them if they are working with any placement firms. There may be another opportunity at your company to still earn the $2500.