While referrals can help employers find candidates, their excessive influence on entry-level hiring creates inequality, making it necessary for companies to limit their impact and prioritize skills and qualifications. Throughout the years referrals have been quietly gaining power in the job industry, facilitating and accelerating the hiring process for many candidates... but lately the power referrals have, goes beyond what it should go.

As a student entering the workforce for the first time, I recently experienced this dilemma firsthand. When my father mentioned a job opening, his first piece of advice wasn't about my skills, but about a friend who could provide a referral. 

Referrals are a good tool for both the employer and the employee, but when overuse, it becomes something that creates inequality for the people applying for that job. This is something I would like to change because it’s something that affects most new graduates. Many people in the entire world are affected by this issue, a lot of talented and qualified students and people who are losing opportunities before they even get a chance to show off their skills and what they are capable of just because another person has better connections than they do.

How Referrals Dominate Hiring: Companies now strongly rely on referrals instead of open evaluations as it should be; this is more common in entry level positions. According to LinkedIn, employee referrals are one of the fastest and most common ways companies fill positions. The National Public Radio (NPR) similarly reports an article highlighting how hiring decisions are made and often influenced by referrals, where “who you know” helps you more than “what you know” and what you can do. According to NPR "At least 70 percent, if not 80 percent, of jobs are not published... the vast majority of hiring is friends and acquaintances hiring other trusted friends and acquaintances." This means that many qualified candidates that are prepared get filtered out before they even get a chance to demonstrate what they can do. If companies use fair, structured hiring and widen their applicant pool, they can reduce turnover and hiring mistakes, saving money while getting stronger, and new talents that improve their overall performance.

Referrals Create Inequality: The overuse of referrals actively reinforces inequality. Research discussed by Brookings institution shows that referral-based hiring tends to favor candidates from similar economic and social backgrounds. Most professional and personal networks mirror an individual’s demographics, experiences, and interests... Without intervention, this can perpetuate inequality and restrict diversity in the workplace.

When employers prioritize referrals, they unintentionally exclude capable and talented candidates that may be more qualified than referred individuals, but less connected to networks with important people. Although referrals can be very helpful, their advantages do not outweigh their negative impact when overused. While referrals should remain a tool in hiring, relying on them too heavily undermines fairness and limits equal opportunity for new graduates and candidates looking for entry-level positions.

Bibliography and sources:

NPR- https://www.npr.org/2011/02/08/133474431/a-successful-job-search-its-all-about-networking

Boon- https://www.goboon.co/post/the-diversity-challenge-in-referral-hiring-breaking-the-proximity-bias#:~:text=People%20naturally%20gravitate%20toward%20familiarity,close%20professional%20or%20social%20circles

CNBC- https://www.cnbc.com/2019/12/27/how-to-get-a-job-often-comes-down-to-one-elite-personal-asset.html