Outsourcing: India's army of bounty hunters fill jobs

Staff cash in on employee referrals to plug skills gaps...

...thousands each quarter. So, newer freebies like laptops, high-end cell phones and shopping vouchers have replaced the old thank-you note and dinner on the house.

Cost-effective and credible
"Employee referrals are a cost-effective and credible means of hiring for large companies," says Pratik Kumar, executive vice president in charge of human resources at Wipro. Placement consultancies and advertising jobs come at exorbitant costs, especially to fill positions by the hundreds. "Employee referrals are the way to do it without busting hiring budgets," says Kumar.

Companies are looking at employee-referral programmes with fresh eyes, says Krishnakumar Natarajan, CEO of Bangalore-based mid-sized IT firm MindTree - as a way of tapping into the passive talent pool in the market, sourcing niche skills and bringing back ex-employees fired during the recession some quarters ago.

"Typically, companies say, the talent sourced through the referrals are distinctly superior, better aligned with the company's culture and tend to stay longer with the company," says Natarajan. The programme becomes a surrogate metric for employee satisfaction.

There are benefits for all concerned - including the organisation, Kumar of Wipro says. At Wipro, employee referrals bring in 30 per cent of the company's lateral hires, job sites another 30 per cent, with a further 30 per cent hired from the CVs the company receives direct from the candidates. The remainder are hired through a pool of consultants.

Issue of indiscriminate referrals
The referral trend has acquired an aggressive dimension recently. HR consultancies see the trend of younger employees indiscriminately referring friends and peers, as a way to earn a quick buck. "There are integrity issues when such attractive incentives are offered," says Bhanushree R, director of TMG Executive Consulting.

Employees should refer because they are happy with the organisation and feel convinced about referring and not just for the incentives, she says.

New referral channels such as social media are making employee-referral programmes more relevant than ever before. The tech-savvy workforce of India's IT sector has a natural affinity with social networks such as Facebook and LinkedIn. "Social media is huge for referrals and has fast replaced traditional channels such as bulletin boards of alumni associations," says Bhanushree.

At the employee level, the referral programmes could serendipitously turn out to be the buddy system that large companies do not have. "In a challenging job and a stressful industry, it is great to have somebody you know working alongside," says Munnoorpillil.