This era has witnessed the changing yardsticks in the employment market and this has affected the traditional modes of hiring. Employing the right candidate for the right job is now a tedious task and contains various predicaments. The hiring costs due to the associated issues and vital requirements have also seen an enormous increase.

These continual challenges have motivated human resource managers to look out for new ways to hire. Hiring through referrals has become popular. The means of hiring was prevalent earlier and it is now acknowledged as an important enabler of recruitment.

Pros And Cons Of Referrals

Hiring through referrals refers to hiring candidates introduced or recommended by the already existing employees of an organization.

This system of hiring is considered as quite beneficial to the organization. Candidates introduced through employee referrals are already tested on the technical aspect of their skills and in this case, existing employees have their own image at stake, which prompts better results.

Another motivating factor in this arrangement is the increasing employee engagement and their positive perceptions, which improve the overall working environment. This mode of hiring also substantially reduces the hiring costs spent in advertising, organizing interviews, or consultant commissions.

Employee referral programs are also considered as good filter in terms of judging a candidate's background for any personal or job related issues before hiring.

However, a major concern hovering around this mode of hiring is the fear of favoritism. A school of thought fears that such hiring practices could lead to the creation of smaller informal groups within the overall organizations and might lead to unnecessary politics or unionism, thereby negatively affecting the working climate.

Considering the positives this problem could be catered to by not referring direct relatives. Another way out could be to ensure appointment of such candidates in different departments from the employee who referred them. In any eventuality, make sure that even the referred candidates are screened thoroughly and have to appear for the normal selection process. The only advantage is that they secure themselves an interview slot.

Hiring thorough referrals is certainly a helpful tool, especially if compared with other modes that encompass huge hiring costs and time. However to cover up the associated threats like nepotism you must administer the entire process closely. Any mismanagement or relaxation on the part of ineffective managers, while hiring, could certainly far surpass the positives and lead to huge losses.