Referral programs are often celebrated for bringing in top talent quickly. However, these programs can raise concerns for companies striving for diversity. Why? Referrals tend to mirror the kind of people in your current team, making it harder to break out of uniformity.

So, can referral hires and diversity coexist? Let's find out.

Are Referrals and Diversity Really at Odds?

Referrals are a powerhouse in hiring. Research shows that 30-50% of all new hires in the U.S. come from referral programs. They save time, lower costs, and bring in high-quality candidates.

However, people typically refer candidates they already know—friends, former coworkers, or acquaintances in their social circles. This often means referred candidates share similar demographics, backgrounds, or perspectives with existing employees, unintentionally stalling diversity efforts.

Referral programs don’t have to compromise diversity. With thoughtful design, they can actively support inclusivity while maintaining their efficiency.

How to Design Referral Programs That Prioritize Diversity

To tap into the power of referrals, you must design programs that actively prioritize inclusivity. Here’s how to make diversity a core focus of your referral strategy:

1. Set goals that focus on diversity

Diversity starts with intention. Take Pinterest, for example. By setting a goal to increase the hiring rate for full-time engineering roles to 30% female, they challenged their engineering team to refer twice as many female candidates over six weeks. This focused effort resulted in a 24% increase in female referrals, demonstrating how targeted goals and team-wide involvement can significantly diversify referral pipelines.

Encourage employees to look beyond their usual circles. Provide resources or tools to help them think creatively about who they know. Employees might not realize how broad their networks are until they consider connections from different schools, industries, or social groups.

2. Broaden your referral networks

Traditional referral programs often rely on existing employees’ networks, which can limit diversity. To broaden their reach, companies can look outside their immediate workforce. For example, partnering with affinity groups and professional organizations representing underrepresented communities ensures referrals come from a broader range of experiences and perspectives.

Additionally, tapping into networks beyond current employees—such as alumni or external advocates—can help diversify the talent pipeline. By engaging a broader audience, companies can ensure their referral programs reflect a variety of backgrounds and skills.

3. Offer incentives that reflect your diversity goals

While many employees refer candidates to help their friends or the company, others need a little push. Instead of sticking with standard cash bonuses, consider dynamic rewards.

For example, offer recognition for referring candidates from diverse backgrounds or create tiered rewards that grow with more referrals. Publicly celebrate employees who contribute to diversity goals through leaderboards or shoutouts.

Challenges and Solutions in Balancing Referrals and Diversity

Even with the best intentions, companies may face challenges in balancing the efficiency of referral programs with diversity goals. Here are some common hurdles—and how to overcome them:

Resistance to Change

Employees may hesitate to adjust their referral habits, especially if they’re accustomed to referring people they know well. To address this, clearly communicate the value of diverse referrals and how they contribute to the company’s success.

Unconscious Bias

One of the most significant barriers to diversity in referral programs is unconscious bias. Employees naturally refer people who remind them of themselves. While this isn’t intentional, it can exclude diverse talent.

To prevent this, training on unconscious bias should be provided. Help employees understand how personal experiences shape their recommendations and show them how to think more inclusively when identifying candidates.

Lack of Buy-In from Leadership

Diversity goals must be supported from the top down. Employees may not take them seriously if leadership doesn’t actively endorse inclusive referral practices. Hosting diversity-focused workshops or sharing success stories from other companies can help build momentum.

Tracking and Measuring Impact

It can be challenging to measure whether a referral program successfully balances diversity with efficiency. Regularly analyze participation rates, demographic data, and retention rates for diverse hires. Use this data to refine your approach and celebrate progress.

By addressing these challenges head-on, companies can ensure their referral programs are both inclusive and effective.

Building a Culture That Supports Diversity

A successful referral program doesn’t just focus on short-term hires—it builds long-term cultural benefits. That means creating an environment where diverse hires feel valued and supported.

Mentorship programs for referred hires can make a big difference. Pairing new hires with experienced employees helps them navigate their roles and grow within the company.

The benefits aren’t just internal. McKinsey report has shown that companies with more diverse leadership teams are 33% more likely to outperform those with less diverse leadership teams. Prioritizing diversity in your referral program enriches your workforce and drives better business outcomes.

Equally essential is regularly reviewing your program’s outcomes. Are your hires staying long-term? Are they advancing within the organization? Use these insights to refine your approach.

How Technology Can Make Referral Programs More Inclusive

Building an inclusive referral program isn’t easy. But with the right technology, it gets a whole lot simpler. Today’s tools can help remove barriers, keep employees engaged, and give you the insights you need to hit your diversity goals. Here’s how:

Make Referrals Easy

Referral programs work best when they’re simple. Boon lets employees refer candidates with just a few clicks, no jumping through hoops. The easier it is to refer someone, the more people will join in—giving you a bigger, more diverse talent pool.

Keep Everyone in the Loop

One of the biggest frustrations for employees is not knowing what happens after they’ve referred someone. With automated updates and notifications, referral platforms keep employees informed every step of the way. They’ll feel involved and appreciated, which makes them more likely to refer again.

Build Diversity with AI-Based Matching

Reaching diversity goals means focusing on skills and qualifications instead of personal connections. Traditional referral programs often rely on networks, which can unintentionally limit diversity. Boon changes this by using AI to match candidates based on their abilities and experience.

This approach reduces bias and opens up opportunities for a wider range of talented individuals. By letting skills and qualifications guide hiring decisions, you can create a more diverse and inclusive team while ensuring the best talent is brought on board.

Offer Flexible Incentives

Not everyone is motivated the same way, and technology lets you tailor incentives to reflect that. Whether it’s tiered rewards for multiple referrals or extra recognition for contributing to diversity goals, dynamic reward structures keep employees engaged while reinforcing your values.

You can create an effective and inclusive program using tools that make referrals easier and track progress. It’s a win-win: better hiring outcomes and a team that truly reflects your company’s commitment to diversity.

Measuring Key Metrics

To ensure your referral program is hitting the mark, track metrics like:

• The demographics of referred candidates.
• Participation rates across teams and locations.
• Retention rates for diverse hires versus others.

Analyzing these numbers shows you what’s working and where you can improve.

Referrals That Drive Diversity

Referral programs don’t have to choose between efficiency and diversity—they can do both. By setting clear goals, broadening networks, addressing unconscious bias, and leveraging technology, companies can create referral programs that attract top talent while fostering inclusivity.

The key is to treat referrals as more than just a hiring shortcut. With the right structure, these programs can drive diversity, helping your organization build an innovative, dynamic workforce that reflects the world around it.

Looking to transform your referral program into a diversity powerhouse? Boon’s platform simplifies the process, making it easy to design, track, and manage inclusive referral strategies. Take the next step—Request a demo today.

‍