While recommending a friend for a job has always been a natural way of recruiting employees, it might present a major barrier to diversity because employees tend to recommend people like themselves. The social media may compound this problem as more and more companies rely on social media as a source of internal referrals and thus save time and money in their recruitment efforts. For example both Ernst& Young and deloitte now hire about half of their employees from these internal referral source combing employee networks such as linked in and Facebook to identify potential candidate. These social site allow companies to trance connection between job candidate and their employees, facilitating the generation of internal referral and thus avoiding the use of cumbersome job search sites such as monster.com.
What are the pros and cons of organizations using incentive for current employees when new hires are social linked to them and the company uses social site to serve as a source of internal referrals?