Referrals and Representation: How One Beloved Hiring Practice May Be Holding Your Diversity Goals Back
We’ve all heard it: “Good people know good people.” And in many ways, it’s true. Referral programs have long been heralded as a gold standard in hiring. They can reduce time-to-fill, improve retention, and even enhance cultural fit. But here’s the harder truth—without careful design, employee referrals can quietly undermine one of the most urgent priorities in today’s workplace: building a more diverse and inclusive team.
Referrals Can Be Efficient—but Not Always Equitable
Let’s start with the good. Referred candidates are often hired faster and stay longer. According to Jobvite, they’re 15 times more likely to be hired than someone who applied through a job board. Referral hires also have higher one-year retention rates and tend to onboard with smoother transitions. This makes sense because referral hires already have both insight and allies.
But here’s the potential wrinkle: most people refer other people who may look like them, think like them, and share similar experiences. That’s just human nature—and when your workforce is already lacking in diversity, this tendency can reinforce the very imbalance you may be trying to fix. I remember as a new immigrant being told to “activate my network to help me get into a job.” I didn’t have a network. I now know that many first generation college students barely have a professional network as well.
As an illustration, a PayScale study found that women of color were 35% less likely to receive a referral than white men. White men made up nearly 44% of referred candidates, though they account for only about 34% of the labor force. This disparity is not just anecdotal—it reflects existing leadership structures. According to HR Dive, as of 2022, about 55% of Fortune 500 board seats were held by white men so it seems reasonable that this group would be the beneficiary of higher referral rates as well. The share of women and underrepresented racial and ethnic groups in these board seats is also steadily rising, probably due to specific efforts.
The Myth of “Network Neutrality”
Referral systems are built on social networks.
But let’s not pretend that everyone has the same access to those networks.
Underrepresented professionals may have smaller or less connected professional networks within an organization. And so, even high-performing employees from diverse backgrounds may be overlooked—simply because no one is in the room advocating for them. No one may be calling their names.
Research by economist Chika Okafor shows that minorities may receive fewer job referrals and thus lower wages—even if all else is equal—because their social connections are smaller or they are just less connected to people in positions of professional leverage. This mechanism, called “social network discrimination,” can lead to a welfare gap of over 4%, hampering employment outcomes for Black workers.
Designing Referral Programs with Inclusion in Mind
It’s not enough to ask employees to “send great people our way.” Recruiters have to ask:
How are we defining great?
Connected through whose networks?
If your organization is serious about diversity, equity, and inclusion, your referral program must reflect that.
Here are some suggestions:
Educate employees on inclusive networking. Teach staff how to expand their professional circles, especially across identity lines.
Use tools that prompt for diversity. Some platforms suggest a broader range of connections to reduce bias in who gets referred.
Democratize job announcements and distribute broadly.
Final Thought
Referrals are not inherently bad or biased—but they do mirror the networks we build.
And those networks are not always as diverse as we’d like to believe.
If you want to cultivate a workplace that reflects the world around us—one rich with different perspectives, cultures, and lived experiences—then your hiring strategies, including referrals, must be built with intention.
Otherwise, we risk reinforcing sameness under the guise of speed and familiarity.
Let’s be bold enough to ask some new questions, evaluate your referral programs, talk to managers who routinely hire the “same” and just build more diverse pipelines.