How your Employee Referral Program Could Be Hurting Your Diversity Goals

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A diverse workforce strengthens every level of your organization and can have a direct impact on your bottom line. Building out diversity begins during the recruitment process, so it’s important to take a look at all aspects of your hiring practices, including your employee referral program.

The Challenges with Referral Programs

According to research by Payscale, over one third of employees in the US received some type of referral to their current job. The study evaluates whether or not these numbers are helping to create a positive work environment. One of the findings indicates that employee referrals disproportionately favor white male candidates which could hurt your company’s efforts to hire a diverse workforce. This is because female candidates are 12 percent less likely to receive referrals than their white male counterparts; men of color are 26 percent less likely and women of color are 35 percent less likely to receive a referral.  

How to Make Employee Referrals More Diverse

Though these numbers clearly show the downsides, there are important benefits to employee referral programs. If you already have a diverse office with inclusive hiring practices, referrals can be a great way to continue to bring on new talent from underrepresented groups. Referrals can lower recruitment costs, increase employee engagement and retention, and help motivate existing employees through incentive programs. If, on the other hand, your company still has important Diversity and Inclusion targets to hit, you will want to ensure your referral process is inclusive. 

Ask your employees to refer more diverse hires 
It sounds simple, but plainly asking your employees to refer diverse candidates can make a difference. In fact, Pinterest saw a 24% increase in women referred and a 55X increase in candidates from underrepresented ethnic backgrounds simply by prompting engineers to refer candidates from diverse backgrounds. 

Incentivize your employees to refer more diverse hires 
If you’re already offering incentives for successful employee referrals, consider paying more for candidates who are currently underrepresented in your workplace. For example, Intel pays twice as much for diverse referrals. 

Recruitment Approaches that Can Complement Your Referral Process

Employee referrals are only one piece of any good recruitment strategy. It’s important to have processes and tools in place to build a diverse workforce.

Create an inclusive recruitment process 
It’s important to bring diverse perspectives into the recruitment process at every stage. When writing job descriptions, choosing who sits on the hiring panel, drafting interview questions and making a final decision on the successful candidate, make sure you are gathering feedback from a diverse group of advisors.

Write skills-based job descriptions 
When developing or revising job descriptions, stick to the skills required to do the work and avoid language around “culture fit” or other terms that could put marginalized groups at a disadvantage. Remember, when you’re looking to increase diversity, you are looking for candidates who don’t necessarily reflect your existing workplace culture.

Use D&I inclusive language 
When creating job postings and employee referral ads, use language that reflects your diversity goals to clearly signal that you’re prioritizing diversity and inclusion in the hiring process. 

Try referral technology to improve the relevance of candidates 
One of the top benefits of employee referrals is the reduction of time and money spent on recruitment. Leverage technology to make sure your referral process is as streamlined as possible. Teamable is HR technology designed to improve and standardize workflows, create a transparent system of record and match your employee’s connections with open positions.

Integrate a bias analyzer 
According to SAP research, unconscious bias can impact every level of recruitment and employee retention. Help navigate your way around these potential blind spots and leverage machine learning technology to identify and flag potential biases. SAP’s Job Analyzer functionality is embedded directly within the SAP recruitment management solution. This software supports hiring managers and HR professionals by scanning and flagging language that reflects gender bias during the application process.

Build referrals through mentorship 
One of the best ways to create a referral program is to first start with a strong mentorship program. Tools like Mentor Spaces enable companies to have their employees mentor emerging Black and Latinx leaders (both inside the company and prospective hires) about their career pathways as well as about the company in general. This approach creates authentic relationships and also builds a strong pipeline of qualified talent. This when, when a job becomes available, you’re not hoping to find a good candidate. You’re instead choosing from several. 

Overall, employee referrals can be helpful. But in order to create a diverse workplace, it’s important that your hiring practices reflect your D&I goals. The more diverse your office, the more diverse your employee referrals will be.