Increasing Diversity Hires by Modifying Your Employee Referral Program

Nearly every firm that has studied recruiting effectiveness has come to the conclusion that employee referral programs are the most effective way to find and hire high quality employees. What makes referral programs so effective is that they “multiply” the number of recruiters that a firm has available. Instead of only a few recruiters seeking out quality candidates, a referral program in effect makes every employee of the organization a 24/7 recruiter. There is, however, one area in which employee referral programs have produced only mediocre results, and that is in providing diversity referrals and eventual hires. Employee referral programs sometimes do produce an adequate number of diversity referrals. But when designed to impact diversity specifically, employee referral programs quickly become the most effective diversity recruiting tool available. It’s important to note upfront that in order to increase diversity referrals, you have to first give preference to them, and second directly reward them. Some in your organization will argue that giving preferences and providing rewards is illegal, immoral, or unfair ó but don’t listen to them. It’s important to first argue that you already give preference to the recruiting of diverse individuals by offering women or minorities scholarships, by advertising in diversity publications, and by attending diversity job fairs events. In addition, when you recruit at minority or gender-based universities you actively demonstrate a preference. We know that if you fail to measure results, or give preferences and rewards in any area of business, you get mediocre results. For the same reason that you give salespeople and CEOs bonuses and special recognition for excellent work, you need to do the same for diversity referrals. Getting results is really pretty simple: you get what you pay attention to, talk about, measure and reward. There are a variety of steps that senior managers can take to make employee referrals the top diversity recruiting source. Here are some of the many ways to improve the number of diversity referrals and hires your firm makes:

  1. Proactively seek out your diverse employees and ask them to play a major role in referrals. You can seek them out individually or through existing diversity or affinity groups (if your firm has them). Ask them specifically to seek out family members, relatives, and colleagues at other firms who are diverse. Encourage them to recruit at associations, religious groups, or social activities that have a large number of diverse members or attendees.
  2. Have the CEO make it known to all employees that increasing diversity referrals is the firm’s number one recruiting priority.
  3. Put diversity recruiting on the same level as other high-profile corporate priorities (e.g., soliciting United Way funds). Talk about it and measure results in the same public manner as other high profile corporate programs.
  4. Prioritize diversity referrals within the HR/recruiting department. Call every diversity referral within 24 hours. Also develop a process that guarantees that the best diversity referrals will get an interview within five working days. Thank the employee that made the referral in writing within 24 hours.
  5. For top referrals, where there is no current job opening, develop a system to automatically email information about any relevant job openings to them as soon as they open up.
  6. Make diversity referrals a primary focus of the referral program.
  7. Educate employees on how important the seeking out of diversity referrals is to the success of the firm. Develop the business case for diversity hiring and educate managers about the importance of diversity hiring to an individual manager’s success.
  8. Make the theme of your referral program’s marketing effort identifying potential diversity hires.
  9. Put together a diversity recruiting advisory board to advise your recruiting team on how to improve diversity referrals.
  10. Assign a diverse recruiter to exclusively handle diversity referrals.
  11. Also assign your top recruiter to handle diversity referrals and increase the pay of referral recruiters.
  12. Educate employees and managers to dispel any misunderstandings that there is a discriminatory impact from employee referral programs. In fact, the EEOC recommends referrals as a recruiting source. Continually track referrals to ensure there is no discriminatory impact.
  13. Make diversity referrals a high priority during black history month, or make it a “theme” periodically during the year.
  14. Proactively seek out your top performers and ask them to give you the names of the best diverse managers and employees they have known throughout their career. Encourage them to call them that day and to make them referrals.
  15. Target suppliers, visitors, and consultants that visit your site. Encourage employees to make them referrals.
  16. Encourage internal referrals where employees can refer current diverse employees for internal jobs that are open. Provide rewards for internal promotions.
  17. Improve or develop a diversity retention program in order to decrease the number of openings that must be filled.
  18. Have the firm apply for the Fortune “Best Companies For Minorities” and “Best Companies To Work For” lists. Placement on these lists will cause more diverse individuals to proactively approach your employees about job opportunities.
  19. Hire diversity-owned firms (or firms that specialize in diversity) to help you design your referral materials and the advertising and marketing programs that go with them.
  20. Talk to your current (and former) diverse employees in order to identify what your firm has to offer, as well as what frustrates them.
  21. Celebrate diversity in your referral brochures, communications, and events.

Events

  1. Encourage employees and provide funding for them to attend events with high diversity attendance. Track the recruiting success of each event in order to improve your overall referral results.
  2. Give conference attendees free lunch “coupons” so that they can take potential diversity referrals to lunch at the event (in order to assess the qualifications and to sell them on the firm).
  3. Assign employees who are attending seminars, trade fairs, and professional association events the “role” of diversity recruiter at the event. Tell them you expect a certain number of business cards from diverse attendees upon their return. Specifically ask them to target diverse speakers and presenters at the event.

Interviews

  1. Be honest with diversity referrals who are rejected. Make it clear to them specifically what they need to do in order to become more qualified. Periodically send them an electronic newsletter about the company in order to demonstrate your continued interest.
  2. Require managers to include one diversity referral candidate out of every five interviews for an open position.
  3. Help diversity candidates do better in their interviews by being honest with diversity referrals (and all other referrals as well) and telling them prior to the interview what specific skills you will be assessing and what areas they should be prepared to provide additional information on.
  4. Provide managers with training on how to more accurately assess and better understand diversity candidates during interviews.

College Hires

  1. Ask your recent college hires and interns to go back to school or use their contacts to identify potential diversity candidates.
  2. Call or email professors on campuses that you do not formally visit and ask them to make diversity referrals.
  3. Offer diversity scholarship programs and consider each applicant as a potential hire.
  4. Encourage your firm’s suppliers and even customers to make diversity referrals.
  5. Set aside a percentage of your corporate internships for diversity referrals.

Rewards and Measures

Article Continues Below

  1. Make diversity hiring a primary reward criteria for the CEO and all senior executives.
  2. Increase the referral bonus for diversity referrals (from 25% to 100%).
  3. Reward employees a small amount for just submitting the names and phone numbers of diversity candidates. This reward would be in addition to the normal reward that would be given when the person was actually hired.
  4. Reward departments with a high percentage of diverse referrals with a party or some other appropriate reward.
  5. Reward recruiters and HR managers for increasing the number of diversity referrals and hires.
  6. Rather than excluding them, allow all managers to participate in the diversity referral program and provide them with the same reward as other employees get.
  7. Have the CEO write a personal email to every employee referral that results in a diversity hire, or have him or her hold a dinner every six months for those that made diversity referrals that resulted in hires.
  8. Consider setting diversity referral targets for each department as part of their performance criteria.
  9. Hold a drawing every six months for a free vacation, and give a drawing ticket for every diversity referral.
  10. Reward managers with a second open position if they fill a hard-to-hire position with a diversity referral hire.
  11. Assess referral satisfaction periodically (referrers, referees, and managers) in order to identify areas of the process that restrict its success.
  12. Remove hiring freezes if the manager fills the position with a diverse hire from a referral or if they have met their diversity hiring goals.
  13. Continually track diversity referrals by every individual manager. Distribute a monthly forced ranked report listing the results (from best to worst) of every manager in order to develop friendly competition (or even embarrassment for weak performers).
  14. Eliminate the administrative delays in paying referral program rewards so that bonuses are paid immediately upon hire. The delay discourages referrals.
  15. Have the executive team add diversity metrics to the annual report and to reports to the board and the shareholders. Compare those results to those of your competitors.

Conclusion The differences between an average and a world-class referral program (one that produces extraordinary diversity results) are the specific program elements and the rewards that are included in the program. By adding a few features, modifying the rewards and expanding the focus of referral programs toward diversity candidates, your firm’s referral program can quickly become the number one source of diversity hires. If every employee constantly seeks out women, the disabled, minorities, and other diverse individuals in every part of their daily lives, over time employees themselves will begin to realize that they already have numerous opportunities to meet and interact with diverse individuals. Given the right education and incentives, these employees will soon learn how to approach diverse individuals about opportunities at the firm. By increasing that number of recruiters and the number of hours that the firm (through its employees) devotes to diversity recruiting, you in effect guarantee a dramatic increase in both diverse referrals and diverse hires. In addition, because the employees know the firm and what makes it great, their sales pitch to diverse candidates is likely to be more honest and believable than any HR recruiter’s could ever be.

Dr. John Sullivan

Dr. John Sullivan is an internationally known HR thought-leader from the Silicon Valley who specializes in providing bold and high-business impact; strategic Talent Management solutions. He’s a prolific author with over 900 articles and 10 books covering all areas of talent management. He has written over a dozen white papers, conducted over 50 webinars, dozens of workshops, and he has been featured in over 35 videos. He is an engaging corporate speaker who has excited audiences at over 300 corporations/ organizations in 30 countries on all six continents. His ideas have appeared in every major business source including the Wall Street Journal, Fortune, BusinessWeek, Fast Company, CFO, Inc., NY Times, SmartMoney, USA Today, HBR, and the Financial Times. In addition, he writes for the WSJ Experts column. He has been interviewed on CNN and the CBS and ABC nightly news, NPR, as well many local TV and radio outlets. Fast Company called him the "Michael Jordan of Hiring," Staffing.org called him “the father of HR metrics,” and SHRM called him “One of the industry's most respected strategists." He was selected among HR’s “Top 10 Leading Thinkers” and he was ranked No. 8 among the top 25 online influencers in talent management. He served as the Chief Talent Officer of Agilent Technologies, the HP spinoff with 43,000 employees, and he was the CEO of the Business Development Center, a minority business consulting firm in Bakersfield, California. He is currently a Professor of Management at San Francisco State (1982 – present). His articles can be found all over the Internet and on his popular website www.drjohnsullivan.com and on www.ERE.Net. He lives in Pacifica, California.