Employees referral means using personal contacts to locate job opportunities. It is a recommendation from a current employee regarding a job applicant. The logic behind employee referral is that it takes one to know one. Employees working in the organization, in this case are encouraged to recommend the names of their friends working in other organizations for possible vacancy in the near future. In fact, this has become a popular way of recruiting people in the highly competitive Information Technology industry nowadays.
Companies offer rich rewards also to employees whose recommendations are accepted after the routine screening and examining process is over and job offers extended to the suggested candidates. Citibank for example, offers Rs 50,000 to its employees for every vacancy filled up by the bank on the basis of their referral. Birla 3M also has an incentive based employee referral program in place. Infotech companies such as Polaris software labs, Cognizant Technology Solutions, Cisco systems etc have even discovered that the stickiness of employees joining through referral scheme is quite high.
Possible benefits and costs of employee referrals:
1) Recommender gives a realistic picture about the job. The applicant can weigh the pros and cons carefully before handing over the CV. The applicant is more likely to accept an offer if one is made and once employed , to have a higher job survival.
2) It’s excellent means of, locating potential employees in those hard to fill positions. The recommender earns a reward and the company can avoid expensive recruiting search – in case the candidate gets selected.
3) Recommenders may confuse friendship with job competence . factors such as bias, nepotism and eagerness to see their friends in the company may come in the way of hiring suitable candidates.
To obtain effective results the details of a referral scheme should percolate down to all levels using various means such as posters, e-mails , kick off parties etc. Employees should understand that they are being entrusted with a critical task. And those making a referral should get prompt feedback so that they come back with more referrals. An upper limit for the number of referrals and the rewards to be doled out could be fixed in advance to avoid any disappointment in this regard later on. Every attempt, however, should be made to ensure quality. The firm should constantly measure the quality and performance of employees recruited through the program. Finally, when the firm decides to shut down the program it should give advance notice and clearly communicate the reason for doing so.
It is a method of recruiting by visiting and participating in college campuses and their placement centers .Here the recruiters visit reputed educational institutions such as IIT, IIMs colleges and universities with a view to pick up job aspirants having requisite technical or professionals skills. Job seekers are provided information about the job and the recruiters in turn, get a snap shot of job seekers through constant interchange of information with respective institutions. A preliminary screening is done within the campus and the short listed students are then subjected to the remainder of the selection process. In view of the growing demand for young managers, most reputed organizations (such as Hindustan lever Ltd, Procter & Gamble , Citibank, State Bank of India , Tata and Birla group companies) visit IIMs and IITs regularly and even sponsor certain popular campus activities with a view to earn good will in the job markets.
Advantages of this method include: the placement center helps locate applicants and provides resumes to organizations, applicants can be prescreened, applicants will not have to be lured away from a current job and lower salary expectations.