Recruiting Strategy: 100% Bonus Over 10 Years | Hacker News Reader

Recruiting Strategy: 100% Bonus Over 10 Years

backpocketcoo.com

29 pointslionhearted28 comments

We actually have a system like this, except it involves someone creating a company and bringing in some H1-B's for 5 years while they work for a Green Card, then skim 50-70% off their rate. I guess one of the differences between our arrangement and the article is the quality isn't as high.

This could spiral out of control in both good and bad ways. The good ways are mentioned in the article, everyone wants to keep everyone else happy so they all continue earning their bonuses. But what happens when someone does leave? The person who referred them will suddenly have their compensation drop. That could destroy morale and send that person looking for other employment. The problem could then possibly ripple throughout the entire organization.

Conveniently, the first person leaving might go to work for another company that has a similar policy, and start referring their co-workers from their previous employer, who then move to the new employer, referring one another as they go.

It is not quite a Ponzi scheme or chain letter, since (presumably) only one referrer could collect the bonus, but it might produce patterns where many people in one department follow the lead of the first one to migrate.

OTOH, if the bonus is linked to the starting salary, HR may now have an incentive to low-ball the start, and then increase to retain.

Cui bono?

How many people calculate a bonus as part of their base compensation? I tend not to count my chickens before they're hatched and don't see how something like this would negatively affect the morale of anyone who understands the difference between base pay and bonuses.

Additionally, a 10% of annual compensation referral bonus is generous; even if it can only be collected once.

If you've recruited 2-3 new hires, and their salary is similar to yours, that's a 20-30% raise a year, a not-insubstantial amount.

I could easily see people coming to expect these bonuses, starting to rely upon them to pay for their holiday shopping, etc, to the point where politics and drama could result.

Of course on paper, even one 10% referral bonus would be better than most existing ones, but people don't behave rationally about money, and we quickly get used to our "bonuses"...

Not only that, but the company negotiates future salary increases knowing the bonus exists, so you can't be guaranteed that it will actually be on top of what you would otherwise get paid.

It is a great idea. I've heard of many companies that give small (~$500) bonuses for successful hires.

The unintended consequences listed here are interesting as like any system, people will learn how to game it.

Ten years at the same company sounds like a nightmare to many of us. I don't ever want to do that again (I hit nine years once), and I don't ever want to inflict that on people I like.

I'll happily take that $12k over the usual $1k, however.

Ten years at the same company sounds like a nightmare to many of us.

I'm pretty unapologetic about job hopping. Most companies just don't have enough interesting work or the right culture to make it worthwhile to stay if you're a genuine fast learner.

That said, I'd love to find a company and job where I could stay for 10 years. That would be ideal. I'm one of the first ones out of a crappy situation, but I'm also tired of this world in which one has to keep changing jobs to get a chance at the interesting work.

I don't quite understand how the work can be interesting when you start out but lose interest after a year or two, unless the project itself ends or goes into maintenance mode. To me, either something is interesting or is not, from day one.

Just to give a different perspective: personally I've only had one employer since I started working 9 years ago, so I'm nearly at that 10 year stretch. I've changed technology several times while there, usually by proposing the change myself. I've also changed what sort of product I've worked on many times. Whenever the work becomes boring because a project goes into maintenance mode, I decide I want to work on something fresh and make it happen.

"personally I've only had one employer since I started working 9 years ago"

I think your experience is an anomaly. I'm nearly 40 and I've had a couple of jobs with something like the freedom you describe (and these [eg. chumby industries] ended only because the company went out of business, not because I left willingly), but the vast majority of jobs, even the supposedly exciting start-up (non-founder) jobs are much more restricted than that.

There's a fairly predictable cycle that occurs at many employers where if you're lucky enough to find a job working on a completely new product (which is ideal for a lot of top developers), you work on that for a year or so, get the first versions out, and then go into a trickle maintenance mode where you're mostly dealing with adding small, mostly unexciting new features. If you were instrumental in helping developing that product, the company will usually be reluctant to let you off of it even if they have other cool things to work on. You tend to get trapped by your early success and become defined by the first project you worked on despite the fact that everyone would probably be better off if you were assigned to the new thing and less experienced developers were put on your maintenance tasks.

To be fair, there are companies out there that don't fall into this trap, but they are few and far between.

Like Michael, I've become pretty blase about job-hopping because of this. If I join your company, I'll give you at least a year and I won't leave you hanging between important release dates, but if you aren't giving me an environment where I am being challenged on a fairly regular basis, don't expect me to be there 3+ years down the line.

> I don't quite understand how the work can be interesting when you start out but lose interest after a year or tw

Really?

Have you ever gotten tired of an ex? DO you continue to read the same book or watch the same movie over and over again?

There is something to be said for the old saying about having 10 years of experience vs having 1 year of experience 10 times.

I've been lucky to work on some fantastic projects( compiler development, software that was sent into space, algo trading systems), all of which I was hugely interested in when i started. 3 years later on all of them I've learned that everything starts to look old after a while:)

Heck, my company's 401k becomes fully vested over 6 years, and I find even that quite awful. :)

Fortunately, it's not the only thing that's keeping me here.

In other words a system for non-ambitious dinosaurs to get in their cronies and milk the system while almost being assured of a job for the next decade

That was the first thing that sprang to mind for me too. You don't always get a referral right. I've had wonderful friends who have made lousy coworkers, if I was even more incentivized to protect them I think you'd see a pretty stagnant workforce develop over time.

I do not get it. How does the referral scheme described in the OP cause anyone to be almost assured of a job for the next decade?

The point being a referral based system incentivizes people to bring in quantity to stack the odds in their favor. Quality gets sidetracked, not necessarily maliciously.

I actually kind of like the system, but doesn't this involve publicizing other employees' salaries? A possible workaround is to just have classes of bonuses, like 5k a year for entry-level, 15k for senior-level, etc.

A workable variant of this system is to assign bounties based on the value of different roles; instead of bonusing precisely 120k, you can assign a 100k bounty to the role; the bounty doesn't have to have any direct relationship with the salary.

The core idea is to make the recruiting bonus recurring.

Similarly, I'm not sure that the 100% over 10 years rule isn't arbitrary. Someone who stays with a company for ten years is incredibly valuable. Why not pay in year 11, and year 12?

Yes role based bonuses for referrals are common in the financial services sector. For example at one firm an AVP referral that was hired would be a $5K bonus whereas a VP referral would be a $10K. Unsurprisingly there is quite a push for for VP and above as a starting title for referrals. I've never heard of a firm that offers a recurring bonus though.

AVP: Assistant Vice President

VP: Vice President

Why is it so bad to know each other's salaries? I've never understood this at all. Salary transparency is, to me, a way to keep management from being corrupt and manipulating harder working employees from getting their fair share

Salary transparency can be good for the employee, but it is worse for the company. If salaries are private, the company has a lot more freedom in how they get and keep their staff. You can offer big bucks for a key position without raising salaries across the board. You can offer targeted bonuses without making people jealous.

Some say this is a corrupt conspiracy, but I think it's just how things are traditionally done, and I don't think it's much different from not making your price lists public knowledge, etc. It's just business. That said, it's in the employees' interest to arm themselves with the going rate for their job duties, and to aggressively push to get a fair rate.

It's hard to say if one approach is "better," because every company is different, and you can't easily switch models. If you decide to go to public salaries, you may be pressured to "correct" a lot of people, some downward. If you decide to go private, everyone is going to be asking why.

Is anyone actually doing this?

Agreed, I like to see some success stories than theory on paper.

The first line of text on your post bleeds into the sidebar and is not readable.

Devide all numbers by 2 and it starts to look reasonable. 5% per year (with a fuzz factor or something) for 5 years.

This is a great idea (assuming that the budget exist), because it takes care of retention, not just recruiting.

I'd split the bonus between the two employees, and have it stop if either leave the company. This way both employees (who might have some influence on one another) have an incentive to keep each other happy at that company. This can boost the retention effect of this strategy.

I'd like to see a per-year (or even per-month) compensation scheme for recruiters, because it would give them an incentive toward more successful placement. The current system seems to encourage churn.

That said, the "both must stay" provision here will cause people to stay longer than they should. Paying people to stick around when there really isn't anywhere for them to go doesn't make a lot of sense. Perhaps that recruiting bonus should be independent of the salaried role (and therefore continue to recur) since it is a separate job.

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