Weekly dilemma: Employee referral schemes

A member of staff has suggested introducing an employee referral scheme, but what are the legal implications of such programmes? Are we in danger of indirectly discriminating by referring friends rather than opening up employment to a wider pool of candidates?

Many businesses have found referral schemes to be an extremely cost-effective way of attracting good applicants.

Under a referral scheme, existing staff are given an incentive, financial or otherwise, to recommend friends or former colleagues for vacancies within the business. The incentive is only given if the recommended person’s application is successful.

This process seems straightforward, but there is a downside. By relying too heavily on employee referrals, there is the danger that this could limit diversity within the workforce. For example, a largely young, white workforce is likely to recommend new recruits from their own ethnic or age group. This will do little to bring new blood and new ideas to the business.

To counter this, some businesses choose to give bigger rewards for successful referrals that help to fill any diversity gaps in the business. If this is a route that you want to go down, make sure that the policy is in line with other diversity initiatives within your business.

However, this shouldn’t be necessary, as long as you make sure that referral schemes only form a part of your recruitment strategy.

Make sure you advertise jobs using different recruitment sources and train interviewers in diversity and the effects of stereotyping. You should also make sure that all your referred candidates go through exactly the same interview and assessment process as all other candidates. All applicants should be treated in exactly the same way – whether they have been referred or not.

By Mark Higgins, head of employment, Betesh Fox


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