Q: My company is hiring. They are offering employees a referral bonus if we refer qualified candidates for open jobs within my company. I referred my neighbor, who was just hired by my employer. I was told he had applied several months ago online so my “finder’s fee” will be zero. Is this a common practice? I feel like I should be paid the money!
A: Employee referral programs are often used by employers to source a wider pool of candidates. Some companies only use them for “hard to fill” positions like developers, engineers or similar roles. Employees, like you, may have professional and personal colleagues who would be well-qualified for opportunities within the company. Further, employees often “screen out” candidates who might not be a good fit, because of commute, experience or other job-related factors.
Most companies do have good intentions when an employee referral program is introduced. They would prefer to reward their employees, rather than pay a fee to a recruiter or place a costly advertisement. However, usually there are some basic guidelines for a successful referral. One of the most common rules for a successful referral is that your introduction between your referral (or your neighbor) must represent the first contact with the company. In other words, the candidate should not have applied before through another source (e.g., a placement firm, an advertisement, a referral by another employee, etc.). It sounds like your neighbor should have notified you that he had applied online to your company several months ago. This information would have likely re-set your expectations. Some companies also have rules like excluding executives, hiring managers or members of the HR/Recruiting teams from receiving a bonus based on an employee referral.
I can understand your frustration but I also understand why you were excluded from receiving the bonus. Keep looking for qualified candidates. Your next referral could be a lucrative one.