Employee referrals may have negative consequences: U.S. study

Lack of diversity, pay gaps among considerations
By Marcel Vander Wier
|Canadian HR Reporter|Last Updated: 01/31/2018

Canadian recruiters say they will continue to promote employee referral programs, even as a study out of the United States suggests there may be negative consequences to this approach.

One-third of new job offers go to recruits who had a referral, according to PayScale’s recent survey of 53,200 U.S. workers.

But alongside the benefits of increased employee engagement and retention, referrals can negatively affect diversity and lead to pay gaps, said Chris Martin, director of research at PayScale, a compensation data and software company in Seattle.