Recruitment Chain
A sequence of recruits where each person's primary financial incentive is to bring in the next recruit, creating a chain structure whose growth is mathematically unsustainable.
Also known as: referral chain, recruitment tree, chain recruiting
Last reviewed: 10 June 2026
A recruitment chain describes the relational sequence in any scheme where income flows from recruiting rather than from product sales or services rendered. Participant A recruits B who recruits C, and so on; each link generates fees or commissions that flow upward through the chain. The term is used analytically to describe the structural dependency on perpetual recruitment that characterises pyramid schemes.
The unsustainability of recruitment chains is mathematical: if each person recruits five others, after just thirteen rounds the required number of participants exceeds the world's population. In practice the chain collapses far sooner when the local pool of recruitable individuals is exhausted.
Recognising a recruitment chain is key to identifying pyramid structures in apparently legitimate businesses. When the compensation plan primarily rewards adding new distributors rather than driving retail sales to external consumers, a recruitment chain is the economic engine of the business.