global hiring

5 Ways Employee Referrals Help To Build A Strong Workplace

Employee referrals and diversity are tightly linked and can help boost your organization’s success. Discover how to create a diverse referral program here.

Gabriele Culot
Written by Gabriele Culot
January 24, 2023
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Key Takeaways

  1. Diversity in the workplace correlates with increased success.
  2. Referral programs are an important tool in securing top-quality candidates.
  3. Designing a referral program that promotes diversity is key to effectively hiring the best candidates while fostering a diverse workplace.

With the rapid growth of remote work, many companies are hiring worldwide to take advantage of an expanded talent pool of diverse candidates and live up to their diversity, equity, inclusion, and belonging (DEIB) initiatives. 

Access to global hiring offers considerable benefits to organizations, helping them overcome the practical challenges of modern hiring and building a diverse workplace.

Among the benefits of workplace diversity, we find: 

How can employee referral programs help with diversity challenges in the workplace?

Research has found that talent acquisition through referrals draws candidates of higher quality than applicants from the general public. Referred candidates are also more likely to receive and accept an offer, stay at the job longer, and perform better. Referrals also reduce the time to hire, making them a great tool for cost saving when hiring.

These factors correlate with a faster recruitment process, improved employee retention, and increased productivity. However, employee referral programs have received criticism regarding whether they are effective in building diverse workforces compared to other recruiting strategies. 

Whatever your feelings on the matter are, here are five ways you can rethink your employee referral program to overcome diversity challenges in the workplace.

Make your referral program diversity-focused with data

Before you can overcome diversity challenges, you need to understand where your organization is falling short. The first step is to collect demographic data to identify diversity gaps so you can set clear diversity recruiting goals. 

Use an HR system to collect your workforce’s diversity data upon hiring or conduct an annual diversity survey. A sensitively designed survey can capture information such as gender identity, sexuality, ethnicity, disability, education level, neurodiversity, parenthood, and more. When collecting this data, ensure it is voluntary and anonymous. Depending on where you operate, you should also make sure that collecting this kind of data is legal.

Once you’ve collected the data, it’s time to identify where your diversity gaps exist. In an ideal world, your company would have a balanced workforce with a fair representation of different groups at every level.

Use analytics to examine your current employee population and benchmark the data against industry standards and local legislation. With this information, you can set realistic and specific diversity goals.

Top tips: 

  • Be transparent about the intentions of the data to ensure every employee understands why you need it and how you intend to use it
  • Use insights and tools from external resources like Paradigm, CultureAmp, and Project Include

Report diversity data and goals to your entire organization

Now that you have goals, it’s time to share them with your team, so everyone’s on the same page. You should share and promote the importance of diversity among your workforce with case studies and statistics. 

Using internal and external communication channels, explain to all managers and employees that a positive correlation exists between higher diversity percentages in a team and improved business results. When employees understand the positive impact diverse talent can have on team results, they’ll be more inclined to participate in the employee referral program once it’s launched. 

Clearly state in your announcements where the company lacks diversity and how you want to see it improve. For example, you want to increase the number of women in technical roles to 40% and achieve a 30% increase in the number of people of color in leadership positions over the next five years.

Ask your workforce for diverse referrals 

Once your team is well-versed in the company’s diversity data, goals, and reasoning, ask them for diverse referrals and provide a simple way to submit them. A tool like Referrals by Deel HR will help streamline your referral process.

Encourage employees to expand their network and reach out to individuals outside their usual professional and social circles. For example, employees may connect with people who belong to underrepresented groups on Linkedin or Facebook.

Explain that it’s okay if the employee is not a close friend or acquaintance and that all leads are welcome. According to a 2016 article by Abby Maldonado, Global Head of Inclusion & Diversity at Pinterest, the company asked employees in their engineering department to refer qualified candidates from underrepresented groups. The company saw a 24% increase in the percentage of women referred and a 55x increase in the percentage of candidates from underrepresented ethnic backgrounds.

Incentivize diversity referrals with rewards

If you want your team to source more diverse hires, offer an increased referral bonus or reward for each successful referral hire. Intel is one big-name company that did this by providing double the referral compensation if their employees recruit women or candidates of racial minorities. 

Other firms have included a charity donation option as an indirect reward for those less concerned about monetary benefits. Whatever your choice, incentives are a great way to make your referral program even more successful.

Launch employee resource groups (ERGs) in Slack

ERGs are online communities that provide companies with direct access to marginalized groups, often part of wider underrepresented minorities outside the work environment. Also known as affinity groups or diversity groups, ERGs are led and participated in by employees who share a characteristic, whether it’s gender, ethnicity, religious affiliation, lifestyle, or interest.

These groups provide a safe space where employees can have open conversations and share experiences, knowledge, and support. For example, Reddit, the social news website and forum, has many ERGs. Hiring managers can reach out to administrators of these groups to promote and request diversity referrals among group participants who can source candidates consistent with the group. 

Build a diverse employee referral program with Deel

Referrals by Deel HR is a seamless HR Slack plugin that lets businesses create automated job announcements in Slack to drive diverse referrals. The tool gives you complete control over which channels receive these announcements, and you can send “job boosts” to specific ERGs or affinity groups to obtain diverse referrals and streamline your hiring process. 

The app also allows your team to search and filter through open positions, submit referrals easily, and track the status of their referral candidates, all from the comfort of your Slack workspace.

Book a demo today to discover more solutions from Deel HR and start building more diverse human resources processes right away.

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