Referrals and diversity — Yes, you can have both.

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When it comes to diversity, referrals get a pretty bad rep.

It’s easy to see why. Birds of a feather do flock together. Your employees will probably refer people who are similar to them. Before you know it, you have a diversity problem.

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So you like referrals, but you also like diversity. Are you being forced to choose between your favorite children?

Maybe not.

Tons of companies are exploring ways that referral programs can improve diversity. Seattle-based company Glowforge had an all-male software engineering team. They introduced a new external referral program. Nine months later, that same team was 50 percent female.

This wasn’t just some fluke. According to Lightspeed Ventures, referral programs are one of the top, low-cost methods to increase diversity for startups. New research from Stanford also shows that referrals dismantle racial bias in the workplace. Minority employees hired through referrals have an easier time moving up in the company, closing the race gap for promotion rates.

Why should we care about diversity? Sure, it looks good on paper, but it can also be good for business. In this study, racial, gender, and ethnic diversity were shown to be positively correlated with financial returns.

So how come some companies get diverse referrals, while so many others get carbon copies of their current employees?

'To listen to these people you'd think all our partners were white middle aged men who spent all their time agreeing with each other.'

Of course, some companies have an advantage. If you’re diverse to begin with, you’re more likely to get diverse referrals. But even the most homogenous company in the world can diversify their referrals. And, it’s not as hard as you might think. Here are a few things any company can do:

Offer an increased reward for minority referrals.

You’ve asked your employees whether they know any female software engineers. They all said they couldn’t think of any.  Would some extra cash help jog their memory? Only one way to find out.

Consider an external referral program.

So no one at your company knows any female software engineers. Well, good news: someone outside of your company definitely does. Offer an external rewards program for successful diverse referrals.

Figure out what’s working.

Diversity is a complex issue, and there’s never going to be one silver bullet to walk away with. Figure out what’s working and what’s not. Track data on new hires, see what methods are improving diversity, and adjust your strategy if you have to.

 

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