As revival takes roots, IT pays to refer your friend for a job

Written by Goutam Das | Goutam Das | Bangalore | Updated: May 2 2010, 06:24am hrs
The upturn in the IT-ITES industry is leading to a windfall for employees. With the clich war for talent a reality again, companies are doling out cars, bikes, game consoles, iPods, plasma TVs, gold biscuits and even foreign trips to employees who refer candidates successfully. These incentives are accompanied by hefty cash rewards as well.

Internet infrastructure services firm VeriSign, which is accelerating hiring for a new product team, is offering one of the highest payouts in form of a whopping cash reward Rs 1.5 lakh for one successful referral and a cruise trip or a three-day vacation in Malaysia for any employee who refers three candidates.

IT services firm Cognizant is running a special referral campaign where employees can walk away with a Hyundai i10 car, Kinetic bike, Samsung laptop and holiday packages to Singapore and Malaysia.

MphasiS recently concluded a special referral campaign because of increased resource demands. Called the Great MphasiS Treasure Hunt, employees with the highest number of referral joinees were awarded Rs 10,000 per candidate and a car, among other things. Employees with lesser number of referrals walked away with Mac books, iPods, plasma TV, and gift vouchers.

Sapient India has doubled the cash incentive for some positions and is giving out spa coupons. The firm was toying with the idea of gifting IPL tickets not long ago and is now planning to send employees on a European tour. Services firm Collabera last week hiked the referral bonus paid to its employees ranging from Rs 10,000 at the lowest level to over Rs 75,000 for critical positions.

Referrals are particularly useful in sourcing mid-level managers technical leads, architects, and project managers who are often hard to find. These people, with 8 to 12 years of experience, dont usually apply directly. It is also difficult to dislodge them from existing jobs.

Referral schemes are a way out, says Sanjay Shelvankar, CEO of ScaleneWorks People Solutions, a human capital management firm.

Companies say employees hired through the referral channel often tend to stay longer and have higher productivity. Although the incentives bestowed look ostentatious, they come at a much lower price than what is paid to recruitment agencies between two and five times higher.

Convergys, which is running a campaign where employees can win bikes, laptops, and iPods, is targeting to up its referral mix to 30-35% from about 25% currently in the next six months. We have had a good experience and people tend to stay longer because they make an informed decision to join. They have a clear view of the role and the company when they join, director of India recruitment at Convergys Ashutosh Sinha says. The firm is mulling setting up a referral call centre to aid speedy conversion and keep employees updated on the recruitment process of their referrals.

The employee source mix varies depending on the company, but the percentage of hires through the referral channel in niche product firms can be as high as 50%. Philips Innovation Campus (PIC) hires 35% of its employees through the referral route. Its internal campaigns are branded I want my friend! We have used mails, posters and the intranet as channels of communication in the organisation. We have observed that quite a few senior management positions in both technical as well as people management profiles have been closed through our employee referral programmes, says Jonas Prasanna, staffing lead at PIC.