Employee referral programs

One of the main tasks of Human Resources is personnel recruitment, but precisely finding suitable candidates can be a long and complicated process. Companies have several alternatives for finding this talent, such as job boards, social media, and the business's own website, and in recent years we can see more and more how referral programs or, in simpler terms, recommendations from acquaintances, friends, and even family, have become one of the strategies that are gaining the most ground when it comes to 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 look for work are 34% web portals, 28% LinkedIn, and 16% referrals. But despite these numbers, when asked how they got 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 own website with 8%.

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

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

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

• Better adaptation: By knowing someone who is already in the company, candidates can learn about it beforehand and have someone to guide them as they learn the work systems, the relationships with colleagues, and the environment in general. This makes adapting easier.

• 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 people who join through these programs are more likely to stay for more than one year, which means that in the long term there would be lower turnover in work teams. This helps 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 it gives prospects the security of knowing what kind of work environment they are entering, what its 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 kept up to date on the job openings the company offers.

• 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 employees 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 Human Resources'. 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 drawbacks that we must be aware of in order to prevent them and handle them in the best possible way. These recommendations can carry an emotional weight, especially when they involve candidates who are family or friends, and this can hinder the process. For this reason, it is always recommended not to hire any referral directly, a problem that usually occurs in small companies that do not have a Human Resources department or where it is very limited. It is recommended that every candidate first go through the complete process of tests and interviews that a traditional recruitment involves, regardless of their origin (referred or not), in order to determine with greater certainty whether they fit the desired profile and avoid bigger problems in the future.

In short, referral programs are a great way to speed up the selection of qualified personnel, providing great economic, social, and emotional benefits to everyone involved, but they do not replace the traditional selection process, they only make it more efficient.