I remember the first time I worked at a company that did referral hiring that skipped the interview process.
The first few hires were amazing. Everyone thought we had struck gold: Just find people your employees can vouch for, and hire them! Why didn't anyone else think of this?
Then we got a referral hire who turned out to be rather bad at everything, from coding to getting along with people. And another who was really entry-level, but their friend had referred them as being much more competent. Then we started screening more, and caught a referral candidate who barely knew anything about the things their friend had vouched for them having had done.
So we went back to using referrals as an additional signal, but they still had to go through the interview process.
That's the problem: Some people will only refer truly excellent candidates. Other people will just refer their friends regardless of their skills.
It very quickly becomes a "you scratch my back, I'll scratch your back" networking game, where people refer all of their friends with hopes that those friends will return the favor in the future.
Referral bonuses led to this being gamed too. Tech companies giving ~$5k out for a hired referral - people would bring in literal strangers and claimed they worked with them. There is/was even a market for referrals on blind and suchlike.
The first few hires were amazing. Everyone thought we had struck gold: Just find people your employees can vouch for, and hire them! Why didn't anyone else think of this?
Then we got a referral hire who turned out to be rather bad at everything, from coding to getting along with people. And another who was really entry-level, but their friend had referred them as being much more competent. Then we started screening more, and caught a referral candidate who barely knew anything about the things their friend had vouched for them having had done.
So we went back to using referrals as an additional signal, but they still had to go through the interview process.
That's the problem: Some people will only refer truly excellent candidates. Other people will just refer their friends regardless of their skills.
It very quickly becomes a "you scratch my back, I'll scratch your back" networking game, where people refer all of their friends with hopes that those friends will return the favor in the future.