Lasting Effects? Hiring Through Referrals and the Post-Entry Career Outcomes of African Americans and Women

Abstract

The authors examine the effects of referral-based hiring on the number of promotions employees receive after entering organizations and the differences in this effect across demographic groups using a two-study multi-method approach. The first study uses data collected from a single organization on approximately 16,000 employees hired over an eleven-year period, while a second study uses data collected from two experiments. The authors theorize that referral-based hiring will disproportionately increase African American’s and women’s number of promotions because it legitimates otherwise traditionally illegitimate employees within organizations. Consistent with this expectation, the authors find evidence that referral-based hiring has a positive effect on promotions for African Americans compared to Caucasians but no disparate effect on the promotions of women compared to men in the first study. In the second study, and in line with their theorizing, they find evidence that the positive benefits of referrals that accrue to African Americans stem from legitimation benefits that affect careers.

Keywords: organizations, referrals, careers

JEL Classification: J60, J62, J15