Thoughts On Referral Bonuses

My personal thoughts on referral bonuses is that I prefer to avoid them. I’ve referred in probably four or five people on my own. Some of those companies paid referral bonuses, but I either split them with the candidate or just turned the whole thing over to them. Personally I only referred in someone if I had faith they were a good fit and the company was a good place to work. Considering I worked for at least one dotbomb I may have misestimated on that one, but I was up front about the risks.

As a manager now with an option to offer a referral bonus, I’ve turned avoided them. My theory is that if someone’s isn’t willing to recommend an acquaintance unless there’s a referral bonus, then they probably won’t make that great of an employee. Much of my bias against them stems from a past company where I saw referrals badly abused so that a few employees could make $10,000 or more referring in some dubious hires.

Given the number of resumes and interviews I had to go through for our last developer hire, I’m considering rethinking my approach to this. Since I’m going to be pretty thoroughly vetting everyone, maybe it’s worth seeing if adding a $3000-$5000 referral bonus. If we end up hiring without a referral again nothing’s really lost in the experiment. And if it ends up being a referral I make, I’ll try to convince HR to nix it since that’s just a bit unethical.