Is referral hiring the best way to hire freelancers?

In the vast world of freelancing, where choices can seem overwhelming, there’s a well-trodden path that often catches our eye: referrals. But do these trusted recommendations truly hold the secret to finding the best freelancers?

Referral hiring, also known as employee-referral hiring or network hiring, is a recruitment method where employers or organisations rely on recommendations from their current employees, colleagues, or professional network to identify and hire new talent. In this approach, existing employees or contacts within the organisation’s network refer to individuals they believe would be a good fit for open job positions.

“When we talk about the concept of advocacy and how employees recommend someone to join their company or refer someone for a job, there seems to be a mutual trust at play”

Mangesh Bhide, senior vice president and HR head, Reliance Jio Infocomm

Why is referral hiring the best way?

Referral hiring for freelancers offers several benefits, including quality recommendations from trusted sources, quicker recruitment processes due to familiarity with contacts, cost savings, improved cultural fit and a sense of trust and accountability among referred freelancers.

People tend to be cautious about vouching for someone they have doubts about, which often leads them to prefer working with well-established professionals. Such situations can be avoided with referrals, as they act as a sieve that sifts out the gems from the gravel. Moreover, the referral process is an efficient way to uncover freelancers, bypassing the tedious chore of sorting through endless applications and often resulting in smoother negotiations.

It also promotes cultural harmony by ensuring that recommended freelancers align with the organisation’s values and work style. Additionally, referrals serve as an informal quality-assurance mechanism, vouching for the freelancer’s skills, professionalism and reliability, offering peace of mind throughout the hiring process.

Receipt of a referral can provide a sense of assurance when assigning work, especially in the context of freelancing, feels Mangesh Bhide, senior vice president and HR head, Reliance Jio Infocomm, “When we talk about the concept of advocacy and how employees recommend someone to join their company or refer someone for a job, there seems to be a mutual trust at play,” enunciates Bhide.

“When considering freelancers and gig workers, relying solely on a referral should be supplemented with thorough due diligence. Blindly accepting a reference check without further investigation isn’t advisable”

Rajorshi Ganguly, president and global HR head, Alkem Laboratories

Drawbacks of relying on referrals

While referrals offer numerous advantages, they also come with their share of challenges. Relying solely on referrals can confine employers to a shallow talent pool, potentially causing them to miss out on the unique skills and fresh perspectives available in the vast world of freelancers. Additionally, the spectre of bias can creep in as referrals may unintentionally favour candidates with backgrounds or networks similar to their own, limiting diversity and novel ideas.

In addition to this, Bhide points out, “One potential concern is that some individuals may take advantage of the referral system. This can lead to issues such as data rights and imbalances.”

Rajorshi Ganguly, president and global HR head, Alkem Laboratories, warns, “When considering freelancers and gig workers, relying solely on a referral should be supplemented with thorough due diligence. Blindly accepting a reference check without further investigation isn’t advisable.’

It’s essential to evaluate whether the referred individual possesses the necessary skills and qualifications for the specific role. While there can be advantages to hiring someone who is known to the referrer, we must be cautious not to overlook any shortcomings in the candidate’s abilities.

When it comes to evaluating these referred candidates, Samir Bhiwapurkar, head of HR and general administration, Japfa Comfeed, believes that the process involves multiple key considerations. First, it’s crucial to assess the credibility of those making the recommendation to ensure their credentials are reliable. Second, avoiding conflicts of interest within the organisation is vital, such as refraining from referring friends or acquaintances for roles even if their services may not meet standards, to maintain the integrity of the hiring process.

“To evaluate candidate quality, collaborate with the hiring manager to define role-specific competencies, perform background checks, tap into social networks for insights from previous employers, and check for past complaints or performance issues with candidates referred by the same source”

Samir Bhiwapurkar, head of HR and general administration, Japfa Comfeed

Overdependence on referrals can lead to a restricted hiring ecosystem, especially if the network lacks the precise skills needed for certain projects. Furthermore, conflicts of interest may arise when referrers have personal or financial stakes in freelancers’ success, potentially blurring objectivity in the selection process. Lastly, when facing large-scale or ongoing hiring needs, referrals may not scale efficiently, making the task of maintaining a consistent flow of referrals challenging. Balancing the benefits and limitations of referrals is key to making an informed choice in your freelance hiring strategy.

Nonetheless, by implementing proper policies and procedures, organisations can reduce the chances of misplacement or misuse of referrals, according to Bhide.

“To evaluate candidate quality, collaborate with the hiring manager to define role-specific competencies, perform background checks, tap into social networks for insights from previous employers, and check for past complaints or performance issues with candidates referred by the same source. These strategies collectively help in making informed and unbiased hiring decisions,” suggests Bhiwapurkur.

He underscores the importance of ensuring the productivity of referral hiring by making sure to investigate any prior complaints or performance problems associated with candidates recommended by the same referrer.

On whether referral-based hiring is the best approach for recruiting freelancers or gig workers, Ganguli feels it’s challenging to definitively say that it is the absolute best method, but it is undoubtedly effective.

A hybrid approach, blending referrals with other methods such as job boards, freelancing platforms and agencies, can offer a broader talent horizon while still capitalising on the reliability and quality of referrals.