Finding the right recruit is becoming increasingly difficult for companies, but how do you reach the appropriate candidate if he or she isn't even looking for a new job.

Quaggo.com, a new online recruitment service, is aiming to locate potential recruits through referrals by their friends, with cash rewards of up €10,000 (£7,880)for people referring suitable candidates.

The Internet service is the progression of the internal referral systems that US companies have used successfully for a number of years, by paying their employees for referring suitable recruits.

If the person who instigates the referral is of a philanthropic persuasion the reward can also be donated by Quaggo to a charity.

For companies advertising with Quaggo.com there are no up front fees and the start-up believes that its model offers a more subtle way of finding the right recruit.

Mr Brien Corcoran, founder of Quaggo, said that the service will provide a way for companies to reach candidates who may not have the time to look through pages of weekly job adverts and listings.

The service, he added, combined the best of traditional headhunting and internal referral programmes and that 20 companies including Intel, Eircom and Siebel Systems, had already signed up to the service.

The company is looking at second round funding from a number of sources and the service is to be launched this month.

Jobs are advertised for free by companies on Quaggo with an associated reward for the successful referrer.

If a user decides to refer a friend to a job they email their friend with the link.

The friend then decides whether they want to apply or not. If they do apply, Quaggo checks the application and, assuming it is appropriate, sends it on to the recruiter.

If the person is hired and the recruit stays for three months, Quaggo is paid a fee and the cash reward is passed on.

Mr Corcoran said that the service does not replace traditional recruitment models but rather is complementary to them, providing a novel new way of reaching people.