With roughly 1,100 tech startups in the greater L.A. area, competition for talented engineers is stiff. And that’s not even counting established tech enterprises and giants – such as Google Inc., which has a large presence in Santa Monica – that are looking to hire the area’s best talent.
So when a friend of RadPad Inc. co-founder and Chief Executive Jonathan Eppers offered to refer him to a great engineer in exchange for $5,000, he didn’t bat an eye.
In fact, he decided to up the ante.
Last week, RadPad began offering $10,000 to anyone who introduces the company to an engineer that’s hired on and stays for at least 90 days. So far, the company has already made one job offer based on a referral, though the candidate has yet to make a decision, Eppers said.
When you consider that recruiters typically take a fee equivalent to 20 percent of a placed employee’s annual salary, which can run from $125,000 to $150,000 for a mobile or software developer, RadPad could actually wind up saving tens of thousands of dollars depending on how many they hire.
“Spending $50,000 in referral fees to hire five amazingly talented people is a good investment,” said Eppers, who noted his company is growing rapidly and trying to implement a host of new features.
The company, whose app facilitates apartment rental transactions, in April raised a $9 million Series A round led by West Hollywood’s Altpoint Ventures. Next month, RadPad will move its 29-person team, which includes 14 engineers, out of its miniscule 1,100-square-foot Santa Monica headquarters and into a Culver City office about six times as big.
“We’ve been aggressively trying to hire more engineering on our team, both back end and front end, for the last six months,” said Eppers.
While this is the first time RadPad has offered referral fees, the practice is becoming increasingly common among local tech firms.
“In general, $1,000 or $1,500 is what I’ve seen,” said Joe Devon, co-founder and chief operating officer of Venice digital consultancy Diamond, who has also organized a number of local tech industry mixers among developers.
“Ten thousand dollars is the highest I’ve ever heard,” he added. “It’s worth it.”
Devon is also a co-founder of LA Media Lab, a nonprofit launched earlier this year with the goal of helping local engineers stay in Los Angeles. The group plans to foster communication and innovation among the area’s universities, tech companies, venture capital firms and government officials. The group held its first event at Cross Campus in Santa Monica last week.
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