IT cos trying to hire through employee referrals

Updated on: Monday, December 13, 2010

IT firms such as Wipro and Infosys are scrambling to attract talent and are aiming to hire at least a quarter of new staff through employee referral schemes.

Wipro doubled cash incentives for each new hire joining through staff referral from around Rs 20,000 paid earlier to Rs 40,000. Other IT giants, Infosys Technologies and Tata Consultancy Services too are shelling out more incentives to encourage those on their payroll to bring in new canditates.

For HR at tech firms, hiring through referral schemes means less trouble and an opportunity to hire ready talent.

Till 2008, even a 15% attrition rate was conservative in an industry where some firms struggled to keep it below 20-30%. However, with large customers like JP Morgan, Citibank and GE sending more projects to India and with firms such as IBM and Accenture under pressure to hire more staff in low-cost locations like India, the war for retaining and hiring talent is back.

In the next twelve months, India's IT industry is likely to hire another 2,00,000 employees, much higher than the nearly 80,000 gross employee additions the industry reported last year. Infosys, for instance, sent a mail a few weeks ago offering double the usual amount for each staff joining through employee referral. Right after that, many Infosys engineers started sifting through popular social media networks apart from reaching out to their friends in the industry.

"We had an employee referral programme at the Chennai campus and we were told that we would get 50% extra money if we manage to bring back ex-employees for senior level openings. But the truth is that this is a cost saving strategy for the company," says an Infosys employee based in Chennai, requesting anonymity.

Some employees say the cash incentives are still much lower than what companies pay to recruitment consultants. "If the person is hired through a consultancy the company has to pay at least 33% of the total CTC to them. But when we refer we are given around 15,000 to Rs 20,000. Rewarding us actually costs less than picking up talent through a consultancy," says another Infosys employee.

The referral money offered at Infosys was between Rs 10,000 and Rs 25,000, according to several staff at the company.

IT cos trying to hire through employee referrals

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