CNET también está disponible en español.

Ir a español

Don't show this again

HolidayBuyer's Guide
Tech Industry

Tech bounty hunters on the rise

The red hot job market is prompting high-tech companies to adopt creative ways to recruit new employees.

The red hot job market is prompting high-tech companies to adopt creative ways to recruit new employees.

For years, many companies have paid bonuses to employees who recommend new employees. But the high-tech boom of the last few years has made such referral programs almost ubiquitous in the industry, and has given some companies cause to spice up their deals.

A case in point is Cisco Systems, of San Jose, California. The networking giant has been on a major growth binge for the last three years, and just last week, it announced that it is acquiring 230 acres in Silicon Valley to house 10,000 new employees in coming years.

To accommodate its voracious appetite for fresh blood, Cisco pays between $500 and $1,000 each time an employee recommends a new hire that stays with the company for 30 days or more. The company also has adopted other programs, including one called the "Cisco Lotto Program," which gives employees who make referrals the chance to win trips abroad, as well as other prizes.

The company also has initiated a Friends@Cisco program, which allows nonemployees interested in job possibilities to talk to Cisco employees with similar job skills about compensation issues, and discuss the culture and other aspects of the company.

Over the last three years, some 50 percent of Cisco's new employees have come through its referral program, said Ngoc Luong, Cisco's human resources representative. She noted that the company's bounty program is one of the most efficient ways to hire individuals with specialized skills.

"Engineers know other engineers," said Luong. "We're getting targeted, great people who are already employed."

Cisco is by no means alone in its efforts. A dozen or so companies--including AT&T, GTE, and Ceridian--have formed a nonprofit coalition called Talent Alliance that is charged with addressing member companies' employment needs.

Talent Alliance has set up a database that allows its members to pool résumés, help-wanted ads, and other information. Talent Alliance also is exploring ways that members can "lease" or "lend" employees in order to accommodate periodic surges or lulls in the high-tech industry. "When one company is going down, another company may be rising," said Greg Hammill, Talent Alliance's chief operating officer.

"You know the employment market is very tight and [companies] are looking to retain people," Hammill added. "If you talked to a variety of companies in the tech area two years ago, they would have said we're not going" to pay bonuses for employees. "Now it's gotten so cutthroat that they're doing that even down to the bachelor's [degree] level."

Jim Zuehlke, a recruiter for Cardinal Mark in Minneapolis, Minnesota, said that referral bonuses is still the most common recruiting technique, and noted that some companies have offered them for the last ten years.

Current employees, he added, are often in the best position to recruit new talent.

"With a referral, you have at least a little better chance that the [new] employee will have the right technology skills and will fit the company culture, because the person referring can only lose out if the employee doesn't work out."

Typically, employees get the bonus only after the recruit has stayed at the job for a given period of time. Bonuses usually fall into the $1,000 range, which results in significant savings, considering that recruiters usually charge a minimum of 20 percent of the new employee's yearly salary.

But, Zuehlke adds, "There's a real fine line" to setting the bonus amount for referrals. "You want to make it something that is worth [employees'] while to do, but something that won't distract them from their jobs."