The big debate about the referral fee.

I have seen a lot of discussions recently about the referral fee offered in the recruitment industry. But the big question is, is it even necessary?

It has become a bit of an industry standard that most recruitment agencies will now offer candidates some kind of reward (whether that is monetary or another incentive), for referring a friend/colleague to them that they end up placing. But why do we do this?

Some people make this into a question of morals…if you’ve had a good experience with an agency then why would you not refer someone to them? And even more to the point, why wouldn’t you want to help out a friend to find their dream job? This is exactly the attitude of a lot of people I’ve spoken to; not everyone needs to be rewarded in order to help another person out, however, is it really so bad to help someone AND get rewarded at the same time?

Let’s not forget it isn’t just recruitment agencies that offer employment referral incentives these days…a lot of employers offer this to their staff now too. Is this to bribe their own employees? Or to simply incentivise and reward their people for introducing good candidates to help grow their business.

It’s no secret that most recruiters get paid commission, through introducing a candidate to one of their clients and charging a fee. This includes on site recruitment companies too. So rather than thinking of it as a bribe, why shouldn’t we consider it as a token of appreciation for helping recruiters out? As a company who works in quite niche and specialist areas, candidate pools can be small. We’re lucky enough to get a lot of candidates through referrals. Sometimes, we know it can be a little cheeky to ask a candidate to take some time out of their day to think of anyone they know who may be a good fit for a role of ours, or even someone who is just looking in general…especially if they are a candidate we haven’t successfully found a role for yet. So we like to thank them for helping us out by offering an incentive. We aren’t sharks who just want names and to make money, we work in a relationship industry and we know that building good relationships takes time. It’s important that our candidates feel appreciated. Doesn’t offering a referral fee help to do this?

by on February 11th, 2017
posted in Advice, Sector News