More proof that when it comes to hiring, it’s who you know that matters

Time to rub shoulders.
Time to rub shoulders.
Image: AP Photo/M. Spencer Green
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There are a number of reason why white men dominate the technology industry, including the fact they tend to invest in or hire others that look like them. Paul Graham, the venture capitalist who founded tech accelerator Y Combinator, received his share of backlash in 2013 when he told the New York Times magazine about an investment that went sour: “I can be tricked by anyone who looks like Mark Zuckerberg. There was a guy once who we funded who was terrible. I said: ‘How could he be bad? He looks like Zuckerberg!’”

Job referrals undoubtedly feed into this less-than-virtuous cycle, and a new report from Jobvite, which makes software for tracking job applications, shows this is the method recruiters primarily rely on when filling open roles. According to the firm, 78% of recruiters hiring across all industries say they find their best candidates through internal referrals. Many companies incentivize their employees to tap their networks for potential job candidates, rewarding them with bonuses if their referrals are hired.

Having informally polled tech companies about their referral rates, Quartz has found that as many as three-quarters of new hires come in through referrals, as is the case with social media platform Hootsuite. CEO Ryan Holes told Quartz in December that referrals are a way to find employees aligned with the company’s values—but the company does not offer referral bonuses to its employees.

It’s understandable why companies rely so heavily on the method. Studies have found referred employees are more productive and stay with their firms longer. And they also come pre-vetted by someone at the company. Effective or not, though, it’s a tactic that largely overlooks underrepresented minorities and helps perpetuate a homogenous workforce.

Some companies are trying to find interesting ways around the problem. Intel, for example, said it would double referral bonuses, up to $4,000, for minority candidates.

But for now, Silicon Valley, which bills itself as a meritocracy, is still a place with a startling lack of diversity, suggesting not everyone has an equal opportunity to succeed there.