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[aa_subtitle_display]As we discussed in a recent post, there are an array of benefits to using an employee referral program in your office. From increased employee retention to a faster recruiting process, it is certainly something to consider for your organization. However, there are disadvantages to consider as well. Like any other decision that involves your business, it is important to consider both sides of the issue. Here, we will take you through the disadvantages of these programs to give you a well-rounded view in order to assist in making your choice. The Disadvantages of Employee Referral ProgramsIt could lead to hard feelingsWhen you are relying on employees to refer candidates to you, when their referrals do not get hired, it could lead to hard feelings in the office. This could create an awkward situation between hiring managers and employees, leading to strained relationships. Because their referrals are important to them and they obviously want to see them onboarded to the team, conflicts could arise if interviews do not go as planned. This scenario will need to be handled with sensitivity and thought to avoid inter-office issues.  It could lead to employees being isolatedIf an employee refers a friend as a candidate, and they eventually get hired, it could lead to these individuals being “isolated” from the rest of the team. It is likely that if people are friends outside of the office, once they work together they will be friendly and socialize inside of the office. These relationships could lead to “cliques” forming among a team, strained relationships among employees, or to people feeling left out. In turn, that could be damaging to your office culture, morale, and environment. Putting together these programs takes time and resourcesDeciding how an employee referral program will work initially will take time and resources. After all, there are a lot of decisions to make and questions to be deciphered from the start. These questions include, What will incentivize employees to refer candidates? What are the policies and procedures around referrals? And, there are many more. As a leader, you must weigh whether or not the initial expenses of this program will be outweighed by employees referring great, long-lasting candidates to your business. If not, it may not be worth investing the resources. Decreased workplace ideasWhen people refer candidates, it is likely that their referrals will be similar to them, their ways of thinking, and their ideals. This could lead to a decreased diversity of ideas and innovation in your workplace, which could certainly have a negative effect on your business. It is important to have a diverse group of employees that bring an array of ideas to the table. How a PEO Can HelpYour PEO can be helpful in weighing whether an employee referral program is right for your business. While this could be a tough issue to navigate, a PEO has the skills and resources to make your decision easier and to answer all of your questions. Let us place you with the best PEO for your business to help your organization thrive. Hiring is normally involving and requires a lot of time getting the right candidate. Most companies prefer referral program as it has higher retention and is a fast recruiting process. It is definitely a process to consider for your organization when your recruitment is time bound. It is however, imperative to note that there are several downsides to consider when embarking on this. Any decision that impacts your business needs to be carefully considered and discussed to avoid tainting of the company image or lack of attainment of company goals. While hiring always ensure that your process has the following traits:
Key Disadvantages of Referral Programs at the Work Place: 1. Lack of DiversityPeople of the same circle normally have the same traits. What this means is when employees refer people, you will find that most of their characters will resemble. For example, an employee who is hardworking and proactive will refer the same kind of candidate while one who is lazy and unmotivated will refer a similar candidate. It is however important to note that there are isolated cases where people refer candidates that do not depict the same characteristics. People from the same demographic also tend to reason in the same way. This means that there will be a limitation and lack of an array of ideas. The best solution is to balance and hire from referrals as well as open advertisements on job sites so as to have a balance. 2. Entitlement, Favoritism and Nepotism:Without your knowledge as the HR practitioner, you may end up hiring people’s close – knit family. Of course, this will lead to resentment from other employees in the company and lack of fairness. For example, an employee may be wrong but will not be reprimanded because their friend or relative is a manager. It is therefore important to inform employees to disclose any relationship that they may have with any of the candidates. Alternatively, you may include clear guidelines stating that family members are not allowed to apply for the roles. 3. Incompetence:When you hire someone on referral you may not vet them properly as you will base it on the trust you have on the referee. With this in mind, you may end up highly disappointed by the candidate as they may not meet up to the pomp and praises that the employee shared. In conclusion, always vet candidates effectively before hiring and also ensure that you have an open discussion with your employees so that they understand the mission and vision of the company. Ask for feedback from employees in your company about your hiring process so that you can tighten loose ends and provide a great experience for candidates as well. Most of all maintain ethical standards and fairness. Which of the following is the most important disadvantage of using employee referrals for recruitment?Applicants who find employment through an employee referral tend to be a problem because they tend to quit more often.
Which of the following is a typical disadvantage associated with employee referral?You could lack diversity and ideas when hiring via referrals only. One disadvantage of relying on employee referrals is that you could end up with a less diverse team. Diversity and inclusion are essential in any business model in 2022 and beyond, and they're also good for business.
Which of the following is the most effective source of recruitment?The top five most popular recruitment sources used by employers include (indicated by percentage of employers): General online job boards and websites (89%) Employee referrals (81%) Staffing agency or third-party recruiter (58%)
Which of the following is the most important advantage of using internal sources to hire from within?Internal recruitment is when a business chooses only to advertise a job within their company or only make it available to current employees. The main advantage is that it can save time and money, but it can also serve as a way to develop and motivate employees within your organization.
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Which of the following is a key disadvantage to recruiting through employee referrals?
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