I spoke recently with Stephen Reddan HR Manager for over 20 years experience and currently working in a large pharmaceutical manufacturing company in Melbourne.

I asked him about his experiences with sourcing staff via referrals from internal staff. His feedback related to his experience in hiring unskilled labour for the production line.

He stated that it worked well for some business cultures, especially the cultures that promote achievement and excellence. However, for low level roles in his experience it can create a “jobs for family members” culture.  Stephan also stated that hiring staff only from internal referals can quickly lead to only hiring staff from certain nationalities.

The pros are that everyone understands what is going on faster; the cons are that change management is extremely hard as the supervisor pushes back and the team backs the supervisor instead of management. It also leads to favoritism for overtime and rewards.

He had found that when there was a disturbance in the workplace the team would clamp mouths shut and refuse to comment on the situation. When the problem did get aired it became a “he said she said” debate instead of a useful resolution.

What is your experience on this?