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Employee referral programs

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One of the main tasks of Human Resources is personnel recruitment, but precisely finding suitable candidates can be a long and complicated process. There are several alternatives for companies to find these talents, such as job boards, social media, and the business’ website. Nevertheless, in recent years, we can see how referral programs or, in simpler terms, the recommendation of acquaintances, friends, and even family have increasingly become one of the strategies that are positioning themselves more and more at the time of finding the right talent for an organization.

This referral system is gaining more and more ground, as evidenced by the survey conducted by the company FirstJob in 2020, which shows that the channels most used by young people to seek employment are 34% web portals, 28% LinkedIn, and 16% referrals. But despite these numbers, when asked about how they got to the position they currently hold, 38% said it was through a referral program, leaving behind portals with 24%, LinkedIn with 12%, and the company’s website with 8%.

The war for talent has led organizations to diversify their search strategies. With referral programs, there are many benefits for both parties, from the economic to the social point of view. Some of these are:

Best Talent: Being professionals who are already known by someone within the company or organization indicates that they have earned the trust to be recommended, which usually makes them very talented and responsible people.

Shorter search time and lower costs: Depending on the company size, the average time to find the right candidate is 29 days from when the vacancy is posted and can extend for months. By reducing the search time, not only the time is reduced, but also the costs, since the efficiency is much higher.

Better adaptation: By meeting someone who is already in the company, candidates can get to know beforehand and have someone to guide them in learning the work systems, relationships with other colleagues, and the environment in general, making it easier to adapt.

Lower personnel turnover: With this program, stronger bonds of loyalty and trust are created between the company and its employees. It has been proven that there is a greater probability that people who enter through these programs tend to stay for more than one year, which means that, in the long term, there will be a lower turnover in the work teams. It helps to increase the productivity of the business in general.

The best references for a business are its employees. That is why this program is so successful; it gives the employer confidence in getting the right talent and gives prospects the security of knowing what kind of work environment they are entering, what their systems and relationships are like, even before their first day on the job.

In order to implement a good referral system there are a few things to keep in mind:

– Workers must be updated with the job offers provided by the company.

– Offer rewards to those employees who successfully refer a contact. This reward can be monetary (with a bonus) or not (with an extra vacation day, for example). The most important thing about this is to create a safe place for the employee to have the confidence to recommend an acquaintance because no matter how good the reward is if we blame or shame the employee for a wrong recommendation, no more recommendations will be obtained.

– Make it easy and part of the business philosophy. Building a good work team is everyone’s job, not just HR’s. Employees who feel part of the company will be more motivated to see it grow and improve.

As we can see, this program has many advantages for everyone involved in the process, but there are also some disadvantages that we must be aware of to prevent them and manage them in the best possible way. These recommendations can be emotionally charged, especially when they refer to candidates who are family or friends, which can hinder the process. For this reason, it is always recommended not to hire directly any referral, a problem that usually occurs in small companies that do not have a Human Resources department or where this department is limited. It is recommended that all candidates first go through the process of tests and interviews that involve traditional job recruitment, regardless of their origin (referred or not), to determine with greater certainty whether it fits the desired profile and avoid major problems in the future.

In conclusion, referral programs are a great way to speed up the selection of qualified personnel, providing good economic, social, and emotional benefits to all involved. It does not replace the traditional selection process but makes it more efficient.