Employee referral programmes and diversity strategy – can they co-exist?

Recently, when I’ve been working with clients to advise on employee referral schemes, many of them are concerned that these programmes actively go against their diversity policies.

So, are they right to be concerned, and should we be moving away from encouraging employees to refer their friends?

Companies are active in promoting diversity because highly effective teams are made up of people who have a wide range of backgrounds, beliefs, cultures and opinions.  If they’re a commercial business, diversity is also key because customer bases are similarly varied.  From a strategic point of view it therefore makes sense for businesses to attract candidates from many different sources when hiring.  A businesses concern about referral schemes is that their people tend to know and refer people like them, which does nothing to promote diversity.

My view is that a referral scheme should be one of many tools in your candidate attraction kit. If you are not relying on it as your sole source then the selling points will always outweigh the drawbacks.  Referral schemes are proven to offer up high quality employees at a reduced cost, as no one is going to refer a friend who isn’t successful at what they do and you aren’t landed with an agency fee.  These new employees are retained for longer and perform better during their time with your business than new recruits from any other source.  So in many ways, what’s not to like about referral schemes?

If you’re continuing to try new attraction sources to target people from a wide range of backgrounds, and when they start work you’re promoting your referral scheme to them as an integral part of your business, then the scheme can actually work even harder for you.  As your employee base becomes more diverse, the candidates they recommend will also come from more varied backgrounds.

So, while referral schemes don’t actively promote diversity, without them you are missing a highly effective tool in your attraction strategy which will save you time and money both with recruitment and retention.

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