Employee referrals dominate IT/ITeS hiring

WHILE campus recruitment continues to be the dominant mode of recruitment, IT/ITeS companies have substantially ramped up hiring through employee referrals and internal promotions. This could be the fallout of cautious and slow hiring phase that most companies are going through.
The global slowdown, which has adversely affected most sectors, has also led organisations to take stock of the situation and restructure their working conditions. The hiring plans across the IT/ITeS have been attracting much attention, since they are associated with massive hiring of fresh talent. “Now almost 40% hiring is through employee referrals and 80% of our promotions are internal,” says Piyush Mehta, Senior vice-president and HR head at Genpact.
“We are more inclined towards it, as apart from saving time on comprehensive background checks and scanning, it also helps in better camaraderie among employees.” When a candidate is employed through a referral programme, there is a less probability of the candidate leaving the organisation in a small span of time.
This fact is well established at Genpact, which has a low attrition rate of 25%. That apart, hiring through referral route also saves time searching, headhunting and calling candidates. Recruiting people and retaining them is becoming a challenge, faced by the HR departments across sectors. In such a scenario, IT/ITeS industry has chosen this mode to ensure effective hiring.
“There has been an increase in hiring through employee referrals by 50% across sectors, and at all levels,” says A Sudarshan, vice-president sales and marketing, Expertus, a talent management and recruitment firm. “The IT/ITeS sector takes the lead in it. At a time when most companies are looking at cost-optimisation, it is a definite tool of cutting on expenses, But it has an adverse impact on head-hunting and recruiting firms like us.”
Employee referral schemes are popular in most Indian IT companies. There are monetary and intangible benefits for employees in case the referred candidate is finally selected. To ensure a successful referral system, it is important to suitably reward those employees who are bringing suitable candidates to the organisation.
This is a strong motivating factor. MindTree Consulting, for instance, has an employee referral scheme ‘Each One Bring One.’ Currently, Infosys BPO is also focusing at maximum recruitment and promotions happening internally. “It also helps in developing employee relations as the employee’s social needs are met and they have a feeling of belongingness towards the organisation,” says Shailesh Mehta, CEO of Gurukulonline Learning Solutions.
However, headhunting and recruitment firms, which have created a good base in the market since long, should not be affected to a major extent as there is always a skill gap or difference between the goals of the organisation and the personal goals of an employee.
“Although there is rampant internal hiring, especially in the IT/ITeS, there would always be a need for specific talent and even cross-border appointments. In such cases, it is necessary to leverage on expert recruitment and hiring firms,” said E Balaji, CEO of Mafoi Management Consultants.