Israeli startup Zao has launched a new service for job referral rewards. It allows employers to pay cash rewards to employees (and others outside the company) who refer a successful candidate to the employer. The service is similar to that of JobFox, whose legal woes we wrote about earlier today. What’s interesting for referrers in the Zao model (and different from Jobfox) is that they can ask others to suggest a candidate, and if they do so successfully, the Zao system will split the reward accordingly. Think of it as LinkedIn (you are connected to this person via…) with a cash incentive.

Zao is also similar to the much larger Jobvite, which manages referrals but doesn’t offer the option to pay referees or the referral splitting functionality.

Zao plays well with social media sites – you can easily forward job postings to Facebook and LinkedIn – although recipients must sign up with Zao to forward the posting. That makes for a glass half full or empty conundrum: it puts the recipient into the Zao system, which can lead to more customers for the startup, but forces users to create a new account, and that might constitute for some a slight disincentive to continue with the referral process. The company makes money when a job is filled, taking a 30 percent cut of the reward amount.

Zao isn’t looking for partnerships with classified ad sites – at least not yet – but it’s still worthwhile keeping on the recruitment radar.

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