Employee Referrals Fill Jobs But Hurt Diversity
The hiring practice helps managers find workers but tends to benefit White men most.
Employee referral programs can lead to less diversity.
Photographer: Narisara Nami/Moment RF/Getty Images
After the Supreme Court struck down affirmative action in college admissions, attention shifted quickly to legacy admissions, which give an edge to children of alumni and disproportionately benefit White applicants. The practice is widespread at elite schools despite being opposed by most Americans. Yet an analogous practice in corporate America — employee referrals of job candidates — draws little scrutiny. A reckoning is long overdue.
A referral program encourages employees to recommend people they know — friends, former colleagues, old school chums — for open roles. If the candidate is hired, the referrer receives a reward, usually a cash bonus in the low four figures. About three-quarters of companies offer referral programs.