Is a £10k referral fee driving the right outcome for your hiring?

“A company publicly offers a £10k fee as a hook to refer the right candidates for a role, is this an effective and efficient way to hire?” 

This was the question I recently posed on LinkedIn here:

49% said Yes, 24% said No, 27% said Jury’s Out, so let’s go through the Pro’s and Cons as I see it, and worth noting this is just my opinion, so contest away please! 

Also, you can assume I am talking solely about an external referral scheme, for the purposes of clarity I think it’s an excellent idea for companies to have a highly lucrative internal referral scheme. After all, if you have people in your company who know and love what you do, and you know and love what they do, then the chances are they will know others who could do the same! 


I have seen recently some start-ups in particular offering up to and in some cases more than a £10k fee for candidate referrals to be sent directly to them. We are talking about founders actively promoting a role and saying if you send me someone, we hire then we will give you £10k. 


  1. Promote to a wide audience that you’re hiring and grab their attention in a way that speaks to their money-making side. 
  1. You find the right person potentially very quickly, and if it’s a key (experienced) hire which often it is in an early-stage business then the chances are it’s cost you less than a good recruiter. 
  1. You can act as the filter of who to speak with, instead of trying to trust someone else to filter for you. 
  1. You completely control the whole process and candidate experience, it’s on to make sure everyone has a great experience which can be empowering. 
  1. You don’t need to deal with 3rd party providers often wasting your time with irrelevant candidates or interviews not happening that were scheduled (and all the other problems clients can face when choosing a poor recruitment partner)! 


  1. Zero control over the filtering of who applies 
  1. Does it drive the right behaviour, if a random person who doesn’t know your company, doesn’t know you, and doesn’t know what you’re looking to achieve can send any profile based on a job title then how can they ensure relevancy? 
  1. Moreover, even though this is a lot of money, will people stop what they’re doing and really go through their network to find the right people? Does this even matter, maybe not. 
  1. Creates a time headache – as a founder if you do suddenly get 100’s of applications, how will you possibly manage these well? Most founders I know are lacking in one key thing – time! 
  1. Create a candidate experience problem – good candidates want a great experience. Great recruiters and internal talent teams know this and can ensure every candidate who applies has a great and memorable experience. The unsuccessful candidates today might be the successful candidates of the future, but they will only apply to future roles if they remember a positive rather than a negative 
  1. If you’re really trying to utilise your network (which makes a lot of sense) then you should be able to get the best referrals without spending a £. 

So, I started by asking how effective and efficient this approach might be, in my opinion, this approach could be effective and opportunistically if you could find the right hire quickly why wouldn’t you give it a go? 

It’s efficient if you nail it quickly, but it becomes quickly inefficient if you don’t and suddenly, you’re inundated with irrelevant candidates who want a piece of you and your role. 

So, should you be maximising your own network to find the right hire? Absolutely yes! 

Do you need to pay a large referral fee to do this? No 

If you’re prepared to pay a fee to find the best person for your business, should you engage with a great recruiter to support this? 100% yes, but then I would say this! 😊 

Love to hear thoughts and comments. 

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