Here’s Why We Need to Pay Higher Referral Fees For Diverse Candidates

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I know a ton of HR Pros right now who have been charged by their organizations to go out and “diversify” their workforce.

By “diversify,” I’m not talking about diversity of thought, but to recruit a more diverse workforce in terms of ethnic, gender, and racial diversity.

Clearly by bringing in more individuals from underrepresented groups in your workforce, you’ll expand the “thought diversification.” But, for those HR Pros in the trenches and sitting in conference rooms with executives behind closed doors, diversification of thought isn’t the issue being discussed.

What is the best way to recruit diversity?

So, I have some assumptions I want to lay out before I go any further:

  1. Referred employees make the best hires (workforce studies frequently list employee referrals as the highest quality hires across all industries and positions).
  2. ERPs (Employee Referral Programs) are the major tool used to get employee referrals by HR Pros.
  3. A diverse workforce will perform better in many complex circumstances then a homogeneous workforce will.
  4. Diversity departments, if you’re lucky enough or big enough to have one in your organization, traditionally tend to do a weak job at “recruiting” diversity candidates (they’re more concerned about getting the Cinco De Mayo Taco Bar scheduled, or MLK Celebrations, etc.)

Now, keeping in mind the above assumptions, what do you think is the best way to recruit diversity candidates to your organization?

Is this what HR departments are doing behind the scenes?

I’ve yet to find a company willing to go as far as to “pay more” for a black engineer referral vs. a white engineer referral. Can you imagine how that would play out in your organization?

But behind the scenes in HR Departments across the world, this exact thing is happening in a number of ways.

First, what is your cost of hire for diverse candidates versus non-diverse candidates? Do you even measure that? If not, why not?

I’ll tell you why not; it’s because it is very hard to justify why you are paying two, three, and even four times more for a diversity candidate, with the same skill sets, versus a non-diverse candidate, in most technical and medical recruiting environments.

Second, how many diversity recruitment events do you go to versus non-diversity specific recruitment events? In organizations who are really pushing diversification of workforce, I find that this ratio is usually 2-to-1.

Paying to be more diversified

So, you will easily spend more resources of your organization to become more diversified, but you won’t reward your employees for helping you get reach your goals? I find this somewhat ironic.

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You will pay Joe, one of your best engineers, $2,000 for any referral, but you are unwilling to pay him $4,000 for referring his black engineer friends from his former company. Yet, you’ll go out and spend $50,000 attending diversity recruiting job fairs and events all over the country trying to get the same person when you know the best investment of your resources would be to put up a poster in your hallways saying “Wanted Black Engineers — $4,000 Reward!”

Here’s why you don’t do this:

Most organizations do a terrible job at communicating the importance of having a diverse workforce, and that to get to an ideal state, sometimes it means the organization might have to hire a female, or an Asian, or an African-American, or an Hispanic, over a similarly qualified white male, to ensure the organization is reaching their highest potential.

Educating workers about the positives of diversity

Work group performance by diversity is easily measured and reported to employees to demonstrate diversity successes, but we rarely do it to help us explain why we do what we are doing with talent selection.

What do we need to do?

Stop treating our employees like they won’t get it, start educating them beyond the politically correct version of diversity, and start educating them on the performance increases we get with a diversified workforce. Then, it might not seem so unheard of to pay more to an employee for referring a diverse candidate!

This was originally published on Tim Sackett’s blog, The Tim Sackett Project.

Tim Sackett, MS, SPHR is executive vice president of HRU Technical Resources, a contingent staffing firm in Lansing, MI. Tim has 20 years of HR and talent background split evenly between corporate HR gigs among the Fortune 500 and the HR vendor community ? so he gets it from both sides of the desk. A frequent contributor to the talent blog Fistful of Talent, Tim also speaks at many HR conferences and events. Contact him here.


2 Comments on “Here’s Why We Need to Pay Higher Referral Fees For Diverse Candidates

  1. I read this article twice – had to let it marinate for a moment.

    Bold(er) thinking for sure and I suspect there are companies out there that have adapted this approach. I don’t see anything wrong with it, but then again, I firmly believe in diversity.

    Not because it’s convenient, but rather because it is and has almost always been of value to those involved. Having grown up in Iowa, I learned the importance of working with others.

    Enjoyed it for the most part. I do recall one a customer on my paper route that didn’t want me to knock on his door to collect the fee for newspaper delivery. He flat out shared his racist view.

    I didn’t give a care then – I most certainly don’t care now. And to the naysayers that will most certainly surface as a result of your thinking, I welcome their opinion as well. So long as such is honest.

    Think about it.

  2. By “diversify,” I’m not talking about diversity of thought,”

    So you want people who are drones, without any kind of thinking. No new ideas, no innovation, just shut up and don’t think. “We are the borg. Resistance is futile.”

    Without diversity of thought, there is no diversity.

    “in terms of ethnic, gender, and racial diversity.”

    And to this author, whose mind is narrow minded, that is diversity, only based on certain irrelevant criteria. Wrong plumbing, wrong pigment, and they don’t want you.

    So clearly this author does not want diversity, just a bunch of brown-nosers.

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