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Are you relying too heavily on employee referrals?

Lee Biggins, founder and managing director of CV-Library


Getting the recruitment process right is crucial for any business, and the growing skills gap means that many companies are exploring new ways to attract the most talented candidates. A growing trend in recruitment is to find candidates through employee referrals, incentivising existing staff members to put forward potential new recruits from their social network. This type of referral scheme can be very useful, not only because it cuts the cost of recruitment, but also because it helps to highlight potential new talent quickly.


But whilst it’s clear that a business can benefit from running a referral scheme, and that it’s a useful hiring tool, it shouldn’t be the only one under your belt. Becoming too reliant on employee referrals can cause problems for your company in the future – below I will explain in more detail why a broader approach to recruitment could be a more beneficial strategy.


You might miss an important candidate


Depending solely on referral schemes may actually lead to missing out on the most talented candidates, or someone who could have been a real asset to the company. Even your most connected members of staff, who may have a large list of social contacts, aren’t going to know all the emerging or existing talent in the industry. By having other recruitment processes in place, and by casting your net a little wider, you’ll open yourself up to a much bigger talent pool, which could help you to find the perfect candidate that might have otherwise gone unnoticed.


Businesses should be diverse


If you rely only on employee referrals, you run the risk of stifling social diversity within your business. Though it’s not always the case, more often than not professionals will be connected to people with similar skills or qualities as themselves, meaning that you may end up recruiting many of the same. This could lead to a lack of diversity across your workforce, as many will possess the same level of skills and possibly even similar ideas. By having a varied workforce, staff are more likely to bring innovative ideas to the table, to foster new ways of thinking, and ultimately help to grow the business.


Employees may be biased


Though it may cut recruitment costs, and you might feel safe relying on the judgement of your existing employees, they may not be in touch with the right candidates. Depending on the nature of your business, you may need highly skilled members of staff that you might not be able to find just through relying on employee referrals. There is always a risk that someone will be recommended simply because they are a friend or really in need of a job, but this doesn’t necessarily mean they’re right for the role, and it could lead to time being wasted on interviewing underqualified candidates. In the long run it is going to be more beneficial for your company to extend the search and invest more time into recruiting, if it means hiring a more talented and qualified candidate.


It could lead to employee discontent


Whilst your existing employees might enjoy being able to put forward people for a job at your company, it could lead to discontent further down the line. Feelings of nepotism could eventually arise, if some staff members become upset when their referrals aren’t hired, or they feel like there is favouritism occurring. By actively searching for and bringing in new candidates yourself, you can reduce the risk of causing any ill-feeling amongst your existing staff, and explore the huge talent pool available to you.


A strong and effective recruitment process is important and by complementing referral schemes with other methods of recruitment, you’ll be able to explore all options and not miss out on potentially important and talented candidates. You’ll also ensure that your workplace embraces diversity, and that new and innovative ideas are always being brought to the table. Don’t rule out an employee referral scheme entirely, but be sure that you’re also actively searching for candidates as part of a wider recruitment strategy.




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