Buying friends?

Scotland's biggest financial employers have given a lukewarm reception to the growing trend for paying staff to recruit new employees.

According to a survey by the Institute of Personnel and Development, around 50% of UK employers now have such "introducer" schemes in place. A quick glance at the headline cost savings helps to explain why the practice is increasingly popular with employers.

Recruiting an employee via referral can knock as much as 50% off the cost of recruitment and employees themselves have proved keen to embrace the phenomenon as fees for introducing a new member of staff can be lucrative - from 1k to 2k for clerical workers to 7k to 10k for senior personnel.

Standard Life introduced such a scheme last year, but it is focused solely on recruiting actuarial, audit and accounting staff, and only for the group's banking, pension and insurance operations. To date, it has led to only a handful of people being employed. David Barr, head of human resources, explains why they brought in the scheme: "The people who are identified by the scheme are those who may not have come to us through other avenues. They may not have even been in the market for a new job until their friend mentioned there was one at Standard Life."

Standard Life said it had no plans to extend the scheme, but some Scottish financial firms have gone further and ruled out using such schemes altogether.

An HR director at one of Scotland's largest fund management groups tells us that she is completely against the practice. She says: "We do not do it as I have serious concerns about the type of people you end up getting. People tend to recruit their friends and that is not necessarily the best thing for our company. Yes, recruitment costs are expensive but it can be more expensive to cut corners."