Referral Programs: The Best Recruitment Win-Win Deal

One of the best ways for a company to grow it's workforce in a reliable and healthy way is through the use of employee referral programs! This article will be all about exploring this concept, and exposing just why your company should really just start doing it as well.

What are we talking about?

An employee referral program is an organized and structured program that employers can use to ask existing employees to recommend candidates for open positions.

And truly, these types of programs operate making full use of a win-win philosophy. Famous Author?Franklin Covey?includes it in his Seven Habits (It’s Habit #4). He defines it as:?a character-based code for human interaction and collaboration

And that’s the name of it, collaboration. Through collaboration, the company can incentivize employers to win alongside the company by helping it hire a new workforce. By changing the chipset from competition to cooperation, we ensure that a friendly, collaborative space is created, a space that invites people to join, where everyone gains something—a much more fertile space, than the ambiance of dog-eat-dog that competitiveness would create.

A win-win environment is not easy to create. There must be a balance of interests, of giving and receiving to the point that we achieve that perfect equilibrium point in which both parties profit the most.

Now, how does this apply to Referral Programs?

Easy. There is truly one area that employees really care about. Fringe benefits are all right. An amiable and nicely decorated office space? That’s all right too. But as good as those things are, they simply do not put food on the table, fuel your dreams or help take care of your loved ones, pets included.

Financial gain, however, is the sure-fire benefit that any employee will seek. And that’s why referral programs work. If the existing employee stands to profit from helping the company gain new employees, and at the same time, they might help someone in their social sphere get a job, then there’s absolutely nothing to lose and everything to gain.?

A common format is to provide a standing bonus to the existing employee for each referred employee that is hired. This bonus would come from the perceived earnings the company would receive from the new employee’s work. This works perfectly for freelancing agencies or businesses that have a hand in sales and commissions. This does, obviously, suppose that the company stands to cede a (small) percentage of their earnings to that existing employee. But that is not a negative, at all.

See, by incentivizing referrals, not only does the company grow, but also it makes the existing workforce more loyal. The fact that there is a standing, passive monetary gain only helps the idea of the employee who garnered the referrals to stay with the company. Not only this, but since their name is attached to that of the new employee, they won’t allow just anyone to be referred. As professionals, we have a subconscious need to be associated with positive, productive, and successful things, and therefore, existing employees will tend to refer good talent consistently.

Another positive of this way of hiring is that it accepts diversity. Each employee in your company belongs to a different social circle. And each new employee referred does so as well. In the end, a chain is created, in which you will always have potential hires from, basically, all walks of life. These employees will have contact will people that know the company from the inside, so new hires will take less time in induction and onboarding, since they will already have knowledge of the company.

Overall, I truly believe employee referral programs are the way to be. As much as I believe in win-win situations. But it doesn’t stop there; imagine a win-win-win.?

That’s what Dutch consulting and IT firm?Accenture?managed to achieve. An idea that I absolutely love. The company’s employee referral program is based on the fact that referring people makes you feel good; either because you helped out a friend by getting him or her a job and/or because you helped the company by finding a brilliant new hire. To maximize this feeling of ‘doing good’ Accenture gave its employees the possibility to donate a part of their referral bonus to a charity of their choice. To top things off, the firm matched that amount. And as we know, there is no chemical more addictive than the dopamine your brain releases when you’ve done something that makes you feel good; thus creating positive feedback of… goodness.

I only have good things to say about these types of programs. They benefit the company, they benefit the employee (Which is the true main way to ensure success for everyone) and they can even benefit the community when done right. If your company hasn’t started implementing this, then right now would be the perfect time to start doing so.

–?Haward Méndez