Do you rely too much on staff referrals? Beware legal risk — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Do you rely too much on staff referrals? Beware legal risk

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in Employment Background Check,Hiring,Human Resources

Issue: Employees tend to refer people with similar characteristics to themselves.

Risk: Overrelying on employee referrals can create a homogeneous work force and spark discrimination complaints.

Action: Limit referrals to 40 percent of your new hires, and follow these other seven tips for a legally safe referral program.

Employee-referral programs can be a reliable, inexpensive way to find great talent. But you probably don't realize that they carry a hidden legal risk, too.

As recent court rulings have shown, relying too much on employee referrals can place your organization at risk of a hiring-discrimination charge. Why? Employees tend to refer people like themselves, which may eliminate any chance of work force diversity. Consider these two examples:

Case 1: Carl Buddig & Co., a meat processing company, agreed to pay $2.5 million and change its hiring practices to end a two-year spat with the EEOC. Th...(register to read more)

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