Question

In staffing their offices, some firms encourage in-house referrals (recommendations of their present employees). What are some possible objections to this practice as a means of obtaining job applicants? What advantages may be realized by the firm that uses in-house referrals?

Answer 1

Objections for In House Referrals :

• As most of the companies have incentive plans related to in house referrals which include monetary incentives to the employees who refer the prospective candidates. Due to this employees refer people just to earn the incentive and do not care about the quality of the new employee they are referring. This may lead to inefficient staff and non trustworthy staff at workplace as the employees do not have the best interests of the company when they are looking forward to a monetary incentive.
• A lot of chances are that employees refer there spouses, children, relatives and friends which creates a homely atmosphere at the workplace and this leads to inefficiency at work. Also, in most of the companies this is considered as a conflict of interest.
• Their is a lack of diversity and new ideas.

Advantages of In House Referrals :

• It saves a lot of money to the company as finding employees and conducting recruitment drives cost more than paying the referral incentives.
• Like minded staff is attracted and efficiency is increased when like minded people work together.
• It saves a lot of time as the company has to make lesser efforts and employees are the ones who make efforts to find suitable employees.
• It also increases employee engagement with the firm and they feel more attached and engaged with the decisons.

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