Key Disadvantages of Referral Programs at the Work Place

Hiring is normally involving and requires a lot of time getting the right candidate. Most companies prefer referral program as it has higher retention.

Disadvantages of referral programs

Hiring is normally involving and requires a lot of time getting the right candidate. Most companies prefer referral program as it has higher retention and is a fast recruiting process.

It is definitely a process to consider for your organization when your recruitment is time bound.

It is however, imperative to note that there are several downsides to consider when embarking on this. Any decision that impacts your business needs to be carefully considered and discussed to avoid tainting of the company image or lack of attainment of company goals.

While hiring always ensure that your process has the following traits:

  • Fair & Open
  • Clear for the candidates – Hiding sensitive information can lead to quick attrition
  • Punctual and considerate – Stick to interview times and communicate in advance in case there are changes. Do not assume that all candidates are free and can accommodate anything just to get the job. It is paramount for one to respect people’s time and treat them well. Whether a candidate gets the role or not, the first impression sticks.

Key Disadvantages of Referral Programs at the Work Place:

1. Lack of Diversity

People of the same circle normally have the same traits. What this means is when employees refer people, you will find that most of their characters will resemble. For example, an employee who is hardworking and proactive will refer the same kind of candidate while one who is lazy and unmotivated will refer a similar candidate.

It is however important to note that there are isolated cases where people refer candidates that do not depict the same characteristics.

People from the same demographic also tend to reason in the same way. This means that there will be a limitation and lack of an array of ideas. The best solution is to balance and hire from referrals as well as open advertisements on job sites so as to have a balance.

2. Entitlement, Favoritism and Nepotism:

Without your knowledge as the HR practitioner, you may end up hiring people’s close – knit family. Of course, this will lead to resentment from other employees in the company and lack of fairness. For example, an employee may be wrong but will not be reprimanded because their friend or relative is a manager.

It is therefore important to inform employees to disclose any relationship that they may have with any of the candidates. Alternatively, you may include clear guidelines stating that family members are not allowed to apply for the roles.

3. Incompetence:

When you hire someone on referral you may not vet them properly as you will base it on the trust you have on the referee. With this in mind, you may end up highly disappointed by the candidate as they may not meet up to the pomp and praises that the employee shared.

In conclusion, always vet candidates effectively before hiring and also ensure that you have an open discussion with your employees so that they understand the mission and vision of the company.

Ask for feedback from employees in your company about your hiring process so that you can tighten loose ends and provide a great experience for candidates as well. Most of all maintain ethical standards and fairness.

Roselinda Olenyo
Notification Bell