Referrals in recruitment


When recruitment is outsourced a single, entry level hire costs a minimum of Rs. 20,000, while this can go over Rs. 50,000 in those with 1-3 years’ experience and even a couple lakhs of rupees in case of senior-level recruits. When the same hiring is routed through employee referrals, the cost comes down by 80%. That’s where referrals – getting employees to recommend their friends—make great financial sense to enterprises.

With the cost of hiring starting to burn deep holes in their pockets, Indian tech corporates are betting high on the ‘Bring your Buddy’ policy.

Indian companies started looking at employee referrals from the end 2001. However, no one was really active till recently. On an average employee referrals account for over 40% of India’s IT hiring and it’s likely to cross 60% in the next couple of years.

Many companies have already put a 40% bar on outsourced hiring, and are busy dishing out attractive bonuses and cash incentives for employees to encourage referrals. Bringing buddies to work fetch employees between Rs. 10,000 to Rs. 50,000 depending on the position, profile and package, of the recruit.

SAP Labs India hired 60% of its 3,000 fresh recruits through referrals as against 30% the previous year. Cisco hires 55% to 60% of employees through referrals in India. Employees are the best means to attract new talent because they understand the culture and psyche of the organization.

HR-global head of TCS says the number of those hired through the employee referral channel has increased in the last two years by almost 175% in the company and expect this to increase further by 50% this year despite a higher recruitment base.

Employee referrals account for around 40% of lateral hiring in Infosys. It’s quality and cost-effective way of hiring said the VP & Head of HR Infosys Technologies.

Referrals reduce costs by over 60% and brought in around 2,000 of Patni’s recruits, of the total recruitment of 4,400.

Wipro Technologies, said employee referrals are also an effective tool to stem the tide of attrition. When friends work together, they are seen to be less likely to leave a company soon. Referrals help culture adaptation and tech familiarity

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