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| Think Tank |
This week we focus on a complete analysis of the
 industry
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Help wanted? Hire a buddy
Manjari Raman & Anamika Rath
New Delhi & Mumbai, Oct 3: Forget headhunters, placement agencies, walk-in interviews, and databanks. There's a new network in town for hiring and this time, it's the peoplepower-intensive software industry that is writing the code for the new HR practice. It's called: referral recruitment.Strapped for the right people, and strafed by quick employee turnover, the software industry has struck upon a novel way of finding perfect employees--and retaining them. The idea is simple: get employees to refer their friends and acquaintances for job vacancies in the company, and in return, pay them a hefty reward for bringing in a dependable new employee. At the Rs 166-crore Mastek Ltd, for example, they call it the `Bring-a-buddy' scheme. A Masteker--a current employee--can introduce a friend or batchmate into Mastek, and if the person is hired, the Masteker gets an extra Rs 8,000 in the payslip--with the reward increasing as the job profile gets more complex. Remember: the employee's involvement stops at thereferral stage. Companies then strictly follow their routine hiring procedures--interviews, group discussions, psychometrics, one-on-ones, whatever--and hire the candidate only if he or she fits the job. While employees are ``rewarded'' only after the applicant joins, consider the pay-offs from the pay-out: It ensures a good fit. With the employee watching out for the interests of the candidate and the company, a referral is more likely to lead to a good match than a stranger answering your help-wanted ad. Says Mastek's group senior vice-president, human resources, K P Bhalerao: ``The Masteker knows his friend as well as the nature of the work. So the chances of getting the right person are more.'' It's cheaper. Rewarding employees costs much less than paying headhunters a fee or a commission. At Delhi-based IIS Infotech, Ipsita Kathuria, vice-president, human resources, claims that referral recruitment usually costs just one-third of the cost of other established recruitment methods. She adds:``Moreover, we are more sure of the result. We wait for three months to see how the person is performing and fitting into IIS and only then is the finder's fee given.'' It gives better results. There is much less chance of a doctored resume or inflated qualifications or cooked-up experience--because your employee already knows the truth about the applicant's work history. Says Lt. Gen. GL Bakshi, vice-president, HR at Delhi-based Metamor Global Solutions Ltd: ``Besides, consultants are only in the game to sell whoever they have on a database--and not necessarily whether that person is exactly what the client has asked for. And as senior and many middle managers are shy to present resumes, a consultant's list is not that exhaustive.'' It minimises the orientation pains. At NetAcross Communications for example, the employee is a mentor right from the time the referral is made. The NetAcross employee is expected to greet his/her friend at the office entrance on the day of the interview, coach theapplicant on what to expect, hand-hold anxieties in the waiting period, and once selected, play big-brother to the new employee. Says Manish Modi, managing director, NetAcross: ``The NetAcross employee is virtually the recruitment manager for that individual, right from doing the due diligence to being the go-between, to making the new person feel comfortable.'' Retention is higher. Bakshi insists: ``With a personal referral the person you get is more likely to be committed, more stable and reliable.'' He should know. At the two-year-old Metamor--where the manpower strength has shot up from 135 to 800 employees in 18 months--nearly 50 per cent of all hiring at the middle manager level, and 80 per cent at the senior level, is done through employee referrals. And of course, the cherry on the referral-recruitment sundae: it makes your existing employees feel good. Mastek's bring-a-buddy system was initiated to retain existing employees. The logic: people like us are more likely to be people welike, and who wants to leave a friendly workplace? Moreover, when employees induct people into the organisation, they feel `responsible' and that helps retain them too. Says Bhalerao: ``The bonding with the company is strengthened with a scheme like this.''Wanted! Reward: Rs 1 lakh Of course, it helps to sweeten the bond with a financial reward for referring the right person. Under the first reward scheme at NetAcross, the mimima for a finding a junior manager for a `normal' vacancy was Rs 15,000--and the maxima, for finding a senior person for an `urgent' vacancy: Rs 80,000. Since July '99, NetAcross has laced the lure with more lucre. In addition to cash, NetAcross employees can earn points too--filling urgent vacancies gets ten times higher points than normal vacancies. At the end of the year, all employees will be sorted into four slabs on the basis of the points accumulated by them. A lucky dip in New Year's Eve will then decide winners in each slab. The prize for the top slab: Rs 1 lakh incash. At IIS Infotech Ltd, technical vacancies draw a higher reward than getting support people. The finder's fee for the entry-level grade, M1, is Rs 7,500 for jobs requiring technical qualifications and Rs 3,500 for support function jobs. The pay-out quickly spirals to Rs 40,000 for the top slabs of M7 and M8 (technical) and Rs 25,000 for an M7 in the support function. While at Metamor, finding a candidate with two-three years experience gets the employee a bonus Rs 10,000, and for more than eight years of experience, the reward is Rs 50,000. Don't snort. If you are worried that under referral recruitment schemes, employees drop their routine jobs and rush to call friends on the phone, it doesn't really happen. In fact, all the companies insist that `the contact' is usually made after office hours and routine work is not affected. But what does change is the old HR saw: never hire members of the family or friends. In the information age, smart HR depends on networking. Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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