10 Secrets to Success of Employee Referrals in India

May 14, 2009

“Better late than never.”

Even though ERE Expo ’09 (Spring) ended more than a month ago, I thought of writing this piece connected to that event. Thanks to an invitation from Todd Raphael of ERE, I flew down to San Diego from India and enjoyed making a presentation on “10 Secrets-to-Success of Employee Referrals in India.” It was one of the breakout sessions and obviously many had other choices to attend. To those who I missed interacting with, I am now making an attempt to share my thoughts again through this medium.

Before I got into the main theme of my presentation I shared some thoughts about India. I assumed that most in the audience would not have experienced India and hence a small introduction helped them to appreciate the context. My PowerPoint presentation is embedded below, along with this write-up. It will be good to go through that with the following synopsis in mind:

The introductory part:

  • India is one-third the size of the U.S., but has almost four times the population. The U.S. is more than five times richer (GDP) than India, which is still largely an agricultural economy. However the Indian population is considerably younger. This is a huge opportunity — and also a challenge — for the leadership.
  • India is a land of contrasts. This is bewildering to outsiders and exasperating to Indians. Things are changing faster than ever before but not as fast as all of us want.
  • One of the reasons for the contradictions is India’s complexity.
  • The IT industry is currently the best-known face of India in many parts of the world. It has had impressive growth. Even with the general slowdown it expects to do relatively well. This means that it will continue to need skilled manpower.

The hiring environment in India and the importance of “references”:

  • Meeting manpower requirements is a major hiring challenge, given the complexity and contradictions in the country. Recruiters have to cope with problems of access, unique expectations, and the multiple influence groups. The bulk of what follows is an attempt to cope with much of this.

About my employer, Aricent:

  • Aricent is an international leader in the field of communications software. It believes in restricting its business to niche communication software development, testing, and maintenance rather than spreading thin into multiple application areas. It has operations in 19 countries worldwide. About 80% of development work happens in India.
  • Some of our top co-creations with our esteemed “who’s who” list of customers in this line of business have been amazing.
  • Aricent’s success in the field of communication software also lies in its capabilities of hiring the right people at the right time, and doing so using the most cost-effective channels and processes. One of the salient features of hiring at Aricent has been its employee referral program named “iRefer.”

iRefer: The Case Study

I presented Aricent’s iRefer program to illustrate the theme of my presentation, “10 Secrets-to-Success of Employee Referrals in India.” Let us now see what these 10 secrets are:

Inspiring Awards and Recognition:

  • A successful participant of this program can easily earn 10% to 15% of his/her annual salary through referral bonuses, plus many other special awards in kind.
  • Special monthly/quarterly/annual prizes for winning referrers have always been a big draw amongst the employees.

Adhering to Service Level Agreements:

  • The members of the recruitment team are committed to certain SLAs with the referrers as part of the program. Data showed that the adherence to SLAs have been approximately 95%. This gives the confidence to the employees to participate in such a program.

Enhancing Participation:

  • The team focuses on increasing participation in different ways. The participation has grown from 9% to 35% in the last seven to eight years.
  • Transparency in process, timeliness at every stage of process, personal engagement with individuals and groups, and effective internal communication have been the essential factors in enhancing participation.

Branding and Communication:

  • Unlike in many organizations, the internal branding and communication for an employee referral program are handled by the recruitment team itself. These activities are not outsourced to the corporate marketing or the communications teams. This helps to reduce the cycle time considerably since there is exclusive focus.
  • The essence of branding and communication has been to feel the pulse of the employees and build themes around that to inspire them to participate in all the programs under “iRefer.” In fact, the brand “iRefer” too was a result of an all-employee global contest for proposing the most appropriate name for the referral program. In the below presentation, one can see various creative uses of different communication methods.

Special Hiring Programs:

  • These are the “toppings” on the base programs. Special programs are announced over and above the regular plan to fulfill short-term requirements of either special skills or some specific levels of people within a specific period of time.
  • Two such special programs have been showcased in the presentation. One of them helped us to hire a certain number of engineering college graduates in an off-season. We did an off-campus drive and had amazing gains in a short period of time at 25% lesser cost per hire. The second program gave us great results, too, when we set out to hire people with special and specific skills which were slightly different than our usual needs.

Catching “Boomerangs”:

  • iRefer’s contribution to our multi-channel “ex-Factor” program was significant. 57% of “boomerangs” we hired through the “ex-Factor” program were through “iRefer.”

Analyzing Metrics and Success Measures:

  • We are all aware that “data without analysis is paralysis.” Like the way an immense amount of data mining is done in the whole recruitment function, “iRefer” too captures a lot of data. We have tools and processes to do so. The success of the referral program is dependent on how swiftly we can respond to different situations and requirements and how we can consistently improve our processes and systems to respond so. Correct and timely analysis of data makes us learn and improve fast.
  • One such case study showing how a change in communication methodology helped to increase the flow of resumes.

Feedback Mechanism:

  • Taking feedback from referrers and potential referrers is as important as giving feedback. While the recruitment team is committed to give timely feedback on the referred candidates to the referrer within the defined SLAs, it is also important to take feedback from the referrers at regular intervals.
  • The feedback from referrers is taken through an internal satisfaction survey and through a structured chain of escalation hierarchy. In addition to that, we have an “iRefer” help desk on our intranet.

Benchmarking Industry for Improvement:

  • Learning from good competitors and sharing with them are always great ways to improve. This is true for all industries. The recruitment team of Aricent has been benchmarking its own “iRefer” program with many big names in the industry through formal and informal sources. Some of the data given against each competitor could be estimates and are based on the best possible information available.

Overcoming the Negatives:

  • Employee referral programs also have to deal with certain negative perceptions universally. The main perceptions which we focused on are (a) possible lack of transparency in the system; (b) possible nepotism; and (c) the fear of “money” affecting relationships. The need to communicate upfront, educate employees correctly about the processes/norms, and ensure robust policies are the essential ingredients to overcome these possible negatives.

I had ended the session with two additional slides on how “iRefer” would operate in the current recessionary environment and posed some questions for the future.

I hope all, particularly the ones I left behind at San Diego, enjoy going through the presentation. If anyone wishes to connect with me, post a comment here.

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