Recruitment Market Segment LS
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Wednesday, 08 September 2010 17:37

Dosh handouts cruel headhunters

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More IT companies are turning to social networking to recruit talent, offering cash payouts of up to $10,000 for referrals, in a move that is nipping at the heels of some IT recruitment firms.  Local software house Atlassian which has been the poster child for this practice will next month launch a second wave of social networking based recruitment initiatives.

The company really upped the ante a year ago when it launched a campaign to find 32 software engineers using its staff's social networks. Atlassian staff who successfully recruited people to the firm were paid $10,000 and anyone else who referred an ultimately successful candidate scored $2,000.

Ultimately 44 people were hired through the initiative - and the company will next month run another social networking based hiring campaign global HR director Joris Luijke told iTWire today.

Information and knowledge management consultancy, UniqueWorld also announced today that it would use social networks and a $2,000 incentive for staff to try and attract talent directly, bypassing traditional recruiters.

According to Eddie Geller, Unique World CEO, online sources have provided the company with most of its new professional staff over the last year. Like Atlassian it is enlisting staff to try and find 18 more professionals to join its team of 50 people in Sydney, Melbourne and Canberra.

Salaries on offer range from $80,000 to $150,000 he said.

'Instead of paying recruiters, we've decided to enlist existing staff to help locate and attract new professionals.   We're calling on them to utilise their social networks to help identify new hires, and we're offering a cash bonus if they refer a friend or contact that is hired,' according to Mr Geller.


Richard Fischer, managing director of recruitment business Greythorn Australia, said that the use of social and other business networks was now entrenched as an IT skills recruitment tool. A survey conducted recently by the firm found that a third of IT job candidates used their networks to find new jobs.

He believed it was a feature of the changing nature of IT professionals who were no longer 'backroom technologists' but 'forward facing professionals.' He said that the change meant that recruitment companies had to learn to participate in the networks themselves in order to source good candidates.

Social network recruitment would be; 'A threat to the recruiters that aren't innovative. For the old fashioned ones that put an ad on the internet this is a threat.' It was just a fact of doing business for more innovative recruiters however.

'It's hard to find talent at the moment, we could encourage our clients to use their own networks to find people. When that's exhausted they go to recruitment specialists,' said Mr Fischer.

One of the particular benefits recruitment companies could provide was access to large networks of sectoral or technology skills which may be broader than those available to existing staff he said.

According to UniqueWorld's Eddie Geller the company has previously found most of its staff through a mix of Seek advertisements and recruitment companies. It has occasionally had internal referrals and previously paid staff $1,000 six months after they recruited someone into the firm. That's now been doubled to $2,000 - with $1,000 paid on hiring, and the remainder after six months.


While it's more expensive than Seek where costs only involved a couple of hundred dollars for the online advertisement, it's a lot cheaper than traditional recruitment. According to Mr Geller 'the fees for what they provide are somewhat exhorbitant.'

Recruitment fees were one of the issues which led Atlassian to largely forego recruiters in its last hiring drive. According to Joris Luijke recruiters were invited to put forward up to four candidates.

If any of the four was hired the recruiter would be considered for further roles, if not the relationship was over - a move that ruffled more than a few feathers.

By using this approach Mr Luijke said Atlassian tripled the number of job applications it secured, and hired 44 software engineers rather than the 32 originally sought. The process was also significantly faster than anticipated.

Atlassian paid its staff $10,000 for every successfully referred candidate, and $2,000 to anyone else (not an employee) who successfully referred a candidate. It was a lot cheaper than the $18,000 that a recruiter might have charged.

Mr Luijke doesn't think the $2,000 that UniqueWorld is offering will be enough. 'Two thousand dollars won't work,' it was 'a bit cheap almost'. 'We offered that externally to create interest.'


According to Mr Geller however; 'We wanted the fee to be meaningful but not over the top. Too low and they won't bother, too big and it's just about that.'

Beyond the size of the spotter's fee Mr Luijke said it was important to have a well thought through campaign to ensure the social networking recruitment strategy worked. Atlassian for example offered new recruits a holiday before they started work and a 'Welcome to Oz' package for the 40 per cent of recruits who came from overseas, which comprised a Harbour Bridge climb, dinner out, and a Sydney guide book.

This provided employees with the talking points they needed to engage with their networks and make them at least consider a move to Atlassian.

'You need to make sure everyone in the company is spreading the message far and wide. HR sets out the vision and the interesting message - a bit like a product launch, then you get everyone at one point to update their Facebook, Twitter and blogs,' said Mr Luijke.

'It's driven by HR but the entire organisation needs to be part of it.'






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