7 Ways Referral Tech Companies are Approaching DEI

Jake SafaneBy Jake Safane
October 20th, 2023 • 5 Minutes

Getting current employees to refer job candidates can be a great indicator of employee engagement, while also lightening your recruitment load. Using employee referrals can nearly cut the time to fill a position in half, according to data from ERIN, an employee referral software provider, based on their users’ experience.

However, without being mindful of your employee referral practices, these programs can hurt diversity, equity and inclusion (DEI) efforts.

“A key concern around referrals is that employees might tend to refer candidates who share similar ethnic/racial or other demographic backgrounds. As a result, workforces that lack diversity risk perpetuating referral candidate pools that mirror the status quo,” notes a Glassdoor report.

The Glassdoor study finds that white candidates account for 54.3% of referrals but only 47.5% of online applicants, indicating that referrals aren’t matching the diversity of talent pools.

Now, with new staffing technologies emerging that promise to make recruitment more efficient, there’s an even greater risk that DEI efforts could be systematically thwarted. Look no further than the challenges in the artificial intelligence (AI) space.

“Machines can discriminate in harmful ways,” writes Joy Buolamwini, a computer scientist and founder of the Algorithmic Justice League, in an article for Time. “I experienced this firsthand, when I was a graduate student at MIT in 2015 and discovered that some facial analysis software couldn’t detect my dark-skinned face until I put on a white mask. These systems are often trained on images of predominantly light-skinned men.”

To overcome this type of challenge, she recommends more inclusiveness when it comes to AI development and governance. 

Similarly, recruitment and HR leaders can focus on building more inclusive employee referral programs. Shifting to skills-based hiring practices, for example, rather than focusing on where a candidate graduated from, could reduce the uniformity of your workforce.

That said, you don’t have to ignore technology. In fact, many referral tech and recruiting software companies are stepping up to enable employee referrals to align with DEI efforts. Some of the ways they’re doing this include the following:

1) Facilitating Bonuses

Companies often pay bonuses to incentivize referrals. But these rewards don’t have to be one-size-fits-all. Many types of talent management software allow companies to customize their referral bonuses, including paying higher amounts for referrals that lead to diverse hires.

“Reward employees who bring diverse hires into the company. This means that diversity inclusion isn’t just the focus for talent acquisition, but now is something that everyone can think about and participate in,” explains ERIN.

Diversity referral bonuses have a long track record. Intel, for example, started paying $4,000 bonuses in 2015 to improve diversity. Now, with recruiting software that can make it easier to manage customized bonus amounts and reward types, companies can have an easier time providing these incentives.

2) Using Inclusive Language

Sourcing diverse employee referrals is only part of the challenge. If companies have shortcomings in their hiring process, that could prevent diverse referrals from progressing from job candidates to new hires. One barrier could be that prospective candidates feel excluded from applying, even if someone they know recommends that they go for it.

For example, gendered language in job descriptions could make it harder to hire more women.

“Words such as competitive, dominant or leader are associated with male stereotypes,” notes a Harvard Kennedy School analysis of research published in the Journal of Personality and Social Psychology. “Masculine-worded ads reduced perceived belongingness, which in turn lead to less job appeal, regardless of one’s perception of their personal skill to perform that job.”

Fortunately, staffing software is making it easier to avoid these types of issues. For example, Workable—a provider in areas like onboarding software and recruitment marketing software—notes that its platform “offers 1000+ gender-neutral, inclusive job descriptions, all optimized for search and job board performance and ready to copy and paste.”

AI can also make it easier to create more inclusive job descriptions.

“Generative AI tools could also help you reduce bias when it comes to creating candidate or employee-facing communications. For example, you could ask ChatGPT to add more inclusive language in a job posting,” notes SeekOut, a recruiting and talent management software company.

3) Enabling Multiple Languages

Related to providing more inclusive job descriptions, some types of staffing software also make it easier to automatically provide job descriptions and other forms of recruitment marketing content in multiple languages. In turn, that can make it easier to convert diverse referrals into diverse hires.

For example, diversity recruitment software provider Pinpoint notes that its platform enables companies to offer their “careers website, application forms and candidate emails in multiple languages,” which can help “attract more applicants, offer a better candidate experience and improve the diversity of your talent pool.”


4) Anonymizing Screening

Although getting employee referrals can be a great way to source talent, sometimes it can prevent diverse candidates who apply through other avenues from getting hired. Or, a diverse referral might get unwittingly screened out due to conscious or unconscious biases, related to factors such as name or appearance.

So, having more anonymity in the screening process can make it easier for top-quality candidates to move forward based on merit, rather than based on how they applied, what they look like, or any other factor that runs counter to inclusiveness.

“Many of the issues related to gender and race discrimination happen in the early stages, and increasing the odds of a candidate making it to the next stage gives them a better shot at displaying their capabilities and securing the job,” notes TestGorilla, a talent assessment screening software provider.

Recruiting software is making it easier to achieve this anonymization. Some offer features like anonymizing candidate names, while others hide the source of how the candidate found the job opening.

5) Removing Bias From Decision-Making

Going a step further than removing bias from the initial screening via anonymization, referral tech and other forms of recruiting software are starting to leverage technology like AI to tackle bias through more of the hiring process.

For example, Beamery offers what it calls ethical AI, where the software recommends candidates that are the best fits, which can reduce human bias and lead to more diverse hiring.

“Evaluate talent objectively based on experience, skills and potential,” Beamery claims on their website. “Ethical, explainable AI helps you make better decisions when it comes to shortlisting, hiring and redeploying talent internally, and supports” organizational DEI initiatives.

6) Leveraging Social Media

To make more diverse referrals, employees might want to turn to their social networks, which could yield access to a broader talent pool.

“Your social network can be a great place to find a wide spectrum of candidates. Allow people to refer candidates through social media, and increase outreach by making it easy for your employees to share the job posting to their social media pages,” notes a Zoho Recruit blog post.

Referral tech companies are increasingly making it easy for employees to get involved with referral programs through digital platforms. From there, employees can seamlessly share job openings on their own social networks.

That’s important because, even though most companies have employee referral programs in place, the majority of workers have not participated in them, according to a survey from HR tech provider Jobvite. So, making it easy for employees to spread the word on social media could remove a barrier to getting more diverse referrals.


7) Analyzing Hiring Processes

Lastly, HR tools ranging from employee referral software to pre-employment screening software to video interviewing software are increasingly making it easy to collect and analyze data.

This data not only helps recruitment teams find efficiencies in their workflows, but it can also be used to figure out issues like where diverse candidates tend to drop off in the hiring process or what seems to be working well in terms of getting employees engaged enough to make more diverse referrals.

For example, Jobvite notes that its DEI hiring tools aim to enable organizations to: “Track and report on the effectiveness of your DE&I hiring initiatives. Identify the best sources for diverse talent, understand the significance of DE&I content, and show the progression of diverse applicants through the recruiting process.”

Be Mindful With Tech

While these are all ways that HR and recruitment leaders can leverage technology to create more effective and diverse referral pipelines, it’s important to be aware of the risks that still remain prevalent. 

If AI isn’t used mindfully, for example, you might end up getting lookalike recommendations, similar to how your Netflix queue might be showing you more and more shows similar to what you typically watch, rather than encouraging you to branch out.

That said, there’s so much potential to use tech for good and, when used carefully, it can help you better align your employee referral program with your DEI efforts.

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