Employee-referral programs have become one of the most successful and least expensive recruiting strategies. But even with their popularity, employee-referral programs can be double-edged swords.
Relying too much on employee referrals can place your organization at risk of not only poor hiring decisions, but also discrimination charges. The problem? 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, recently agreed to pay $2.5 million and change its hiring practices to end a two-year spat with the Equal Employment Opportu-nity Commission (EEOC). The EEOC sued after its investigation showed that African-American applicants were rarely hired at Buddig, and that women were steered to the lowest-paying jobs.
The EEOC said a key factor in the company's problems was an over-reliance o...(register to read more)