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Best of the Human Factor

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Refer, Track, Earn
Issue Date - 01/04/2014

Employee referrals refer to an internal recruitment method employed by organisations to identify potential candidates from the existing employees’ social network. It gives an opportunity to existing employees to recommend their friends, family members, peers for the vacancy existing in organisation.

The employee referral scheme is a preferred method of recruitment today, because it involves less cost and there are monetary as well as non-monetary benefits for an employee.

The Process

At Motilal Oswal Financial Services Limited, all employees can access the referral program webpage on company intranet, through which the data is collected and made available to the recruiters. The benefits of program extend to organisation, employees and the referred candidates.

The Organisation

The data of prospective candidates is sourced from popular job sites and through recruitment consultants. The task is tedious and involves the cost of recruiters. Also, organisation incurs cost in undertaking a contract with consultancy to source candidates.

Both the activities are costly. The manager’s job is to adopt the most cost-effective strategy to obtain the organisational goals. The most feasible and economical method then is through referrals. The only expenditure incurred here is in marketing and communicating the requirement.

The adoption of referral scheme leads to many other benefits to company. It motivates employees and increases their commitment. It leads to the development of ‘Organisational Citizenship’ – a term that refers to the positive behaviour of employees towards organisation.

The Employees

The benefits of referral scheme to employee are both monetary as well as non-monetary. The monetary benefits include referral bonus and cash reward. The non-monetary rewards include gifts, awards, holiday trips, etc. With such incentives in place, employee is motivated to give the referral.

Normally, the benefits are conferred on the candidate after he has completed a certain amount of time in the organisation – mostly two to three months.


Employee referral is one of the ideal ways to earn extra income and also assist a friend or a peer to get a job, thus being a dual benefit scheme. It also helps in substantially reducing the recruitment cost and in obtaining a vast pool of talented candidates

Sudhir Dhar           

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