Don’t depend on the people you know to get you the job you want. A new PayScale survey of 53,000 workers found that personal referrals from friends and former coworkers to be mostly ineffective and costly to both employees and employers.
Survey: only 34% of job referrals resulted in job
When you send out a reference request, don’t expect it to lead to a job offer — only about one-third of employed workers surveyed said that they had been the recipient of one. The most common type of job referral — with 41% of employees being the recipient of one — came from a family member or close friend.
While it’s common for managers to reach out to personal networks of who they know for job leads, the survey’s findings challenge the fairness and efficacy of such a decision. The survey found that referrals from friends and families resulted in less engaged employees who said they were less satisfied with their employer and had worse relationships with their managers than business referrals. The finding suggests that a sign of professional investment could be in someone you don’t personally know reaching out to you on LinkedIn or cold-calling you for a job.
As a job seeker leveraging your friends and families for leads, you should also be cautious about how personal referrals can impact you once you get the job offer. You may think that being friends with the CEO can get you a better salary offer, but the survey found that personal referrals were offered an average salary that was $1,600 a year less than those who were referred by a business contact.
Job referrals disproportionately help white men
Not only are referrals found to be ineffective, they are also found to decrease diversity. At worst, they can be discriminatory. If you want a diverse workforce, you should not be relying on job referrals to find candidates.
The survey found that white men overwhelmingly benefited the most from this practice. The survey calculated that out of every 100 employees referred, “44 of them will be white men, 22 will be white women, 18 will be men of color and only 16 will be women of color, holding constant industry, location, and other relevant variables.”
The survey also found that the salary offers resulting from job referrals helped men more than women. While referred men could expect an $8,200 salary increase, the average women could only expect to receive a $3,700 salary increase.
How to combat referral hiring bias
Inclusive hiring means examining every part of the hiring process for gaps to improve. If you are not getting the range of candidates needed to get a diverse workforce, it’s up to you the manager to find the demographics being overlooked.
As journalist and managing expert Stacy-Marie Ishmael put it, “If you’re a white dude, it’s extremely likely that most of the people you know socially and professionally are also white dudes. And since so much of hiring is about referrals, guess who ends up being recommended first?”
To combat this bias, Ishmael advises employers to actively search beyond personal pipelines for new talent: “Attend job fairs that specifically target people from underrepresented groups. Sponsor the conferences that are aimed at encouraging minorities in technology and media. Be present, be sincere, and be prepared to put money and time into the work.”