Hiring: that's what friends are for

Sunday's NYT ran a story about how companies increasingly are relying on employee referrals to make hiring decisions.  From a company perspective, the challenge is how to find the optimal employee for a position and make the decision regarding that hire in a cost-effective fashion.  Large firms literally receive thousands of resumes per week, more than they could ever hope to carefully review one by one. 

So what sources of information can simultaneously best identify the applicants who will be the best fit and be inexpensive to collect?  Whether backed up by research or their own gut feel, more and more companies have concluded that employee referrals are the way to go.

The downside: referrals will tend to be very much like the people already on payroll, not a great move if a company is looking to develop true intellectual and social diversity.  That is why some companies are capping the number of openings they fill through referrals.