Employees are offered £421 towards getting a new tattoo, piercing or haircut once they pass their probationary period with the company.
If a current employee recruits someone new, both are entitled to the tattoo money.
The company, which has hotels across Europe including London, has seen a 25% increase in applications since introducing the policy.
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Steve Herbert, wellbeing and benefits director at Partners&, said although the incentive is a clever way for Ruby Hotels to stand out from competitors, it might not have much staying power.
Speaking to HR magazine, he said: "Employers who offer something quirky or different are likely to stand out against the more vanilla offerings of their competitors. This is therefore a clever and pragmatic answer to the challenges of recruitment in 2022.
"That said, this is unlikely to become mainstream, as the appeal of this offering may be relatively short lived."
As well as offering benefits that appeal to staff, savvy employers, Herbert added, need to look at ways to provide a tangible return on their investment.
He added: "Longer term I would expect most employers to continue to focus on those benefits that support workers and improve physical, mental and financial wellbeing."
Airline Virgin Atlantic revoked its ban on cabin crew revealing their tattoos in June, becoming the first airline to do so.
Herbert added that employers could change their mind on tattoos in the future.
He added: "Tattoos – by their very nature – are fairly permanent, and have historically drifted in and out of fashion. While these employees may currently have the support of their employer in obtaining tattoos, there is no guarantee that this will be the case in five, 10, or 20 years’ time.
"So a touch of discretion around tattoo location would be strongly advised to avoid potential future problems."
