meet diversity goals with employee referrals

Recruiting & Diversity Hiring Goals

As the percentage of women employees fell for the second year in a row, Microsoft announced the decision to tie executive bonuses to organizational diversity goals. With “modest gains” in the hiring percentage of racial minorities, it is safe to say that Microsoft is unsatisfied with the results of their recent diversity and inclusion efforts. Tech companies and Silicon Valley startups seem to be making lots of news around hiring diverse teams, but this goal is certainly not limited to new industries.

Can we just require teams to interview and hire more diverse candidates?

The Rooney Rule was created for the NFL and as of 2009 requires teams with a vacant senior operations position to interview at least one minority candidate. According to football coaching legend Tony Dungy, the Rooney Rule has become, “Just let me talk to a couple minority coaches very quickly, so I can go about the business of hiring the person I really want to hire anyway.” The same ESPN article states that the gap in minority hiring (in the NFL) is identical to what it was almost 20 years ago. Requiring that hiring managers interview a more diverse group of candidates, just doesn’t work.

Does tying executive and recruiter bonuses to diversity increase hiring ratios?

In 2014 Facebook (who uses a point system for recruiters) increased the point value for African-American, Hispanic, and female engineers. Recruiters who earn more points benefit from better performance reviews and presumably a larger paycheck. The initial 50% increase didn’t see the desired gains, so it was decided to double the number of points awarded for a minority hire. After 2 years of increased focus and attention on minority employees, the number of Hispanic and African-American engineers didn’t budge. The female workforce grew by a marginal 2%. While it seems promising, simply tying executive bonuses to hiring goals has not been the diversity catalyst most companies have been hoping for.

How can employee referrals increase diversity?

Intel increased the employee referral bonus for team members who refer women and minorities in 2015, and Accenture is also doling out bigger referral bonuses for “African-American, Hispanic-American, female, and veteran” referrals. Employee referrals are already the #1 hiring source for Accenture, and now they have developed a strategy to increase diversity while maintaining a strong referral program. Pinterest is also increasing the diversity of new hires through employee referrals, but they aren’t even offering an increased incentive. Pinterest has simply put a renewed focus on reaching out and asking employees to be mindful of diverse candidates, and encourages everyone to take a role in helping to diversify the team. This simple solution has increased female referrals by 24% and referrals of “underrepresented ethnic backgrounds” by 55 times. Dr. Sullivan and the team at ERE Media even go as far as to say, “focus your referral program on diversity and offer a significantly higher referral bonus for diversity hires.”

Citing companies like Glowforge who do not offer a referral bonus, except in the case of diversity hires, ERE suggests that increasing referral bonuses for diverse hires is a solid and effective strategy. Referring women, underrepresented minorities, or people with disabilities can earn you a cool $5,000.

The fact of the matter is that employee referrals are less expensive to hire, reduce employee attrition, and in general provide the highest return in recruitment investment. However, if your employee referral program (ERP) still relies on paper forms and doesn’t offer a mobile referral platform, your competitor will most likely end up hiring the team you’ve been looking for. To effectively recruit with employee referrals, you must have a simple, intuitive, mobile friendly process that allows current employees to share jobs via digital and social channels. Visit Lingo.careers to learn more about next-generation employee referral programs.