Referral recruitment is a recruitment strategy that encourages employees to refer contacts for specific positions. It performs better than regular recruiting:
There are disadvantages to putting too much emphasis on referral schemes, such as reduced workforce diversity and unfairness regarding other prospective candidates. To combat these disadvantages some companies are opening up their referral schemes to external contributors. Not only does this help to combat the aforementioned issues, but it also increases the size of the network of potential referrers.
Referral recruitment programs rely on the principle of co-option while allowing people in the company referral network including employees to refer candidates to fill job openings. Online, they can be implemented by leveraging social networks like LinkedIn, Facebook, Google+, etc.
Some companies offer cash incentives or other perks for when successful hires are made by the company through this program.