The Hindu Business Line : Employee referrals popular among HR managers

ALTHOUGH companies are experimenting with a whole range of hiring options such as job fairs, recruitment agencies and online ads, HR managers would still bet their last rupee on employee referrals programmes, which they say, have given them the best results.

There are two reasons for this: Current employees have a clear idea of the required skill sets and second, the new-recruits know what to expect from the job and the company. Therefore, lesser are the chances of them exiting the company in a hurry.

Confirming this, Mr Puneet Jaitley, General Manager, HR, MindTree Consulting, says, "Yes, it's true that infant mortality is lower when employees come through referrals."

In most companies, 25-30 per cent of the new hires come through this route. And this number is growing, says Mr Mike Weston, Chief Executive, LogicaCMG Offshore Services.

Explaining the benefits of the process, Mr Vivek Tripathi, Senior HR Manager, Adobe India, says employees have contacts in the target population and therefore, the probability of a referral candidate getting selected is higher.

Mr Gautam Sinha, CEO, TVA Infotech, a Bangalore-based IT recruitment firm, feels that this works best for small and medium enterprise companies. "Because employees are better-equipped to sell the company to their friends and acquaintances."

Another reason why this model is successful in SMEs is because placement agencies prefer large recruitments (50-100 per month), which SMEs may not need, according to Mr Vikram Kumar, Director, MAQ Software.

In fact, MAQ has gone a step further and encouraged referrals from anybody, not necessarily employees. "Anyone can refer a candidate and get paid in case he or she is hired," he says. And the compensation ranges between Rs 10,000 and Rs 50,000 depending on the position being filled. Mr Kumar believes that this exercise has given them access to a larger pool of people.

Of late, HR managers are pouring their creative juices in making referral programmes as attractive as possible. For instance, Adobe is running a scheme where all employees who have successfully referred a candidate are eligible for a lucky draw where they can win a luxury car. "This is apart from a referral bonus of Rs 50,000 that they get," he explains.

But does the lure of such huge stakes affect employee performance? In other words, does networking and headhunting assume more importance at workplace? "No," says Mr Tripathi, "Most employees are already heavily-networked and they will not do this at the cost of their jobs."

But, warns, Mr Sinha, "In smaller companies, there may be a danger of some people forming groups and recommending each other to make a fast buck. They should watch out for it."

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