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)