It's widely recognised that employee referrals can be vital recruitment channel - delivering candidates at a lower cost who are likely to stay with the organisation longer and reinforce the referring employee's commitment and therefore retention.
But many organisations steer away from referrals through fear of them cloning the existing workforce and - if it's not as representative as the employer would like - impacting on diversity. Whilst this is clearly the case, it can be mitigated through ensuring job opportunities are visible across other channels or upweighting referral payments for under-represented groups - as Intel do.
More than a third of U.S. workers landed their current job via an employee referral. In a tight talent market, it’s tempting for organizations to rely even more heavily on employee referrals to fill open positions, but a new study from PayScale shows that doing so could lead to pay inequities and a less-diverse workforce. Between April and August 2017, PayScale asked approximately 53,000 U.S. workers how they came to apply to their current job and if they had landed their job based on an employee referral. Other demographic, job, and employer details were also collected as part of the survey.