Black unemployment

The Surprising Effect of Referral on Promotions for African-American Employees

The Surprising Effect of Referral on Promotions for African-American Employees

By Victor Ochieng

Searching for a job isn’t easy; it involves knocking doors and presenting oneself in the best way possible. In several cases, a job search hits a false start or fails miserably. Although there are many who succeed through their own searches, many others land jobs through referrals.

A study conducted by Tufts and Stony Brook University give credence to the old saying that “it’s not what you know, it’s who you know.” The study report reveals that Facebook friends, particularly those not very close to you, could be the avenue to a job opportunity. The study found out that up to 90% of these friends, referred to as “weak-ties,” helped friends get jobs.

This very fact has been seen by Adina Sterling, an assistant professor at Stanford’s Graduate School of Business. “Knowing somebody in a company prior to joining—someone coming through, for instance, a referral—helps people develop more robust networks inside firms,” she said to Stategy+Business. She added that employees who land a job through a referral are more likely to stay longer in the job. Moreover, employees with friends within their company tend not to do so much search for better offers as it’s likely to negatively impact on these friends.

These results inspired Sterling to further explore the long term effect of referrals, especially on an employee’s upward mobility. She, together with Jennifer Merluzzi of Tulane, scrutinized data relating to hiring and employment of 15,382 workers of a large, private company over a period of 11 years. To their surprise, they found out that, among African American workers, referrals accounted for more cases of upward progression.

The team chose that particular company because referrals rank among its most dominant approaches when it comes to hiring, accounting for 36% of the total number of employees hired over the 11-year study period.

All the employees join the company at the entry level and go through the same kind of training, with most of them joining aged around 25. Besides the training, they all get similar incentive structure. The said company prefers issuing promotions internally, allowing employees to experience different jobs and responsibilities at higher levels. The company’s demographics are; 38.6% women; 55.5% white; 18.2% black; 16.2% Hispanic; and 7.5% Asian-American.

Sterling and Merluzzi argue that in most cases, using the traditional hiring methods leads to the documented cases of racism and gender discrimination thus interfering with equality at the workplace. Through a referral, however, the new employee gets the opportunity to be treated well and get access to resources, mentorship, and training that eventually spark their upward mobility.

From the study, they found that African Americans are the biggest beneficiaries of referrals. To be sure, particularly among African-Americans, they broke it down further to educational background, regional geography, and level of education and ended up with the same results.



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