In Corporate America, two out of three companies have an employee referral program in place. At the same time, referrals are the first source of new hires. According to Forbes Contributor Jeff Hyman, most companies today get introduced to superior candidates through current employees. Referred candidates are typically a better culture fit, they reduce the time-to-hire and the cost-per hire, their retention rates are higher, and they also generate the best return on investment. Without a doubt, the value that employee referral programs bring is clear and compelling.

Through the employee referral program, companies ask their existing employees to recommend candidates from their existing networks. Because it is human nature to congregate with people who are like us, we tend to cluster together based on education, race, age, professional status and more. Not every employee is going to have an extensive and diverse network.

The million-dollar question therefore is… Can an organization’s employee referral program clash with its efforts to hire more diverse candidates? Not necessarily.

One author suggests prioritizing referred candidates. When a company places referred candidates at the top of the list, however, it runs the risk of overlooking other better qualified candidates (in terms of skillset or even from a cultural fit perspective). In this situation, the referral program could clash with diversity initiatives. When a new position is posted and the applications come in, recruiters should work to educate managers about selecting candidates for interviews based on skill set and qualifications vs referral status.

Each employer has their own internal and external recruiting policies and practices. Referrals are still a good source of new hires, but not the best! Organizations should simultaneously focus on their diversity & inclusion program, as well as on the referral program. Diverse teams are stronger teams, and a high-quality workforce is key to rising above competition.

Thinking about how to make your workforce stronger? Ask us how we can help!