Tech workers earn thousands recommending strangers for jobs

TL;DR: A time-honored practice in corporate recruitment has been tapping into the networks of current employees for new talent. Now, a new trend is emerging, one that is shaking up this traditional approach while giving rise to an underground market where job seekers connect with anonymous company insiders willing to provide that coveted foot in the door.

Why would an employee risk their reputation by participating in such a scheme? Simple. Bloomberg tells of one resourceful tech worker who, over the course of 18 months, managed to recommend more than a thousand job candidates to his employer, resulting in several successful hires and approximately $30,000 in referral bonuses. Nearly every person he endorsed was a complete stranger.

It is easy to understand how this trend caught on. With job searches becoming increasingly prolonged and resumes seemingly disappearing into the void, applicants are seeking any advantage they can find.

The power of a referral cannot be overstated. According to hiring platform Greenhouse, external applicants face a daunting 1 in 200 chance of being hired, while those with referrals see their odds improve significantly to 1 in 25. Internal applicants, though rare, enjoy the best odds at 1 in 5.

Several platforms have emerged to facilitate these anonymous referrals. Blind, a free app used by millions of tech workers, hosts forums where job seekers can post about specific roles or companies. Verified employees can then offer to provide referrals, typically through direct messages. Glassdoor's referrals forum operates similarly, catering to finance and consulting roles in addition to tech.

For those willing to pay, platforms like Refer Me and Refermarket offer more structured services. Refer Me charges $12 a month for unlimited referral requests, while Refermarket charges between $3 and $50 per request, depending on the user's plan. ReferralHub takes a different approach, allowing insiders to set their own prices. Current listings range from $10 for a ServiceNow referral to $50 for ByteDance, with companies like BlackRock, Goldman Sachs, Microsoft, Nvidia, and Spotify falling in the $20 to $25 range.

The popularity of these services is evident, with Microsoft referrals on ReferralHub reportedly being sold over 200 times at $25 each. Refermarket, founded by a laid-off California tech worker in 2023, has amassed 10,000 users, with about a third opting for premium subscriptions. The platform's user base is about 60 percent based in India, with the remainder mainly based in the US.

While these platforms claim their practices are legitimate and call them as "courtesy referrals," some companies disagree. Goldman Sachs explicitly stated that such unapproved referral activity violates their code of conduct. Google emphasized that referrals must be based on personal knowledge of candidates from immediate networks and are subject to the same vetting process as other applicants.

Human resources professionals are taking notice. Jenny Dearborn, chief people strategy officer at BTS, recounted to Bloomberg how a previous employer simply began ignoring referrals from an employee who was submitting hundreds per quarter. Nolan Church, CEO of FairComp, warned that while job seekers have little to lose, employees risk damaging their most valuable asset: their reputation.