Chapter 1 INTRODUCTION
Employee referral is an internal recruitment method employed by organizations to identify potential candidates from their existing employees' social networks. An employee referral scheme encourages a company's existing employees to select and recruit the suitable candidates from their social networks. As a reward, the employer typically pays the referring employee a referral bonus.
employee referrals help in cutting costs which are associated with hiring. Companies work on reducing the average cost per hire. Recruiting candidates through the referral system results in huge savings as large amounts on advertisements and placement agencies costs are saved. Companies reveal that the cost of hiring a referral candidate works out to be 60 percent to 70 percent cheaper than that of going through an external agency and recruitment advertisement.
Recruiting through referral programs help in finding the right person with right skills and that too at a nominal cost. It is the most cheapest but effective mode of recruitment. It also help foster a stronger commitment with employees.
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Recruiting
candidates
using
employee
referral
is
widely
acknowledged as being the most cost effective and efficient recruitment method to recruit candidates and as such, employers of all sizes, across all industries are trying to increases the volumes they recruit through this channel Research suggests that people hired through employee referrals tend to have longer tenure and higher job satisfaction. Yet, national surveys indicate that only 30 to 40 percent of positions are filled this way.
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About the STUDY
Title of the Study The present study is titled as ?EMPLOYEE REFERRAL? with special reference to ?TATA CONSULTANCY SERVICE?.
Objectives of Project To know about importance of Employee Referral in an organization. To acquire details about how the organization is recruiting best candidates with employee referral To acquire details of how the organization is design employee referral policy . To know how the employee referral is beneficial to the organization. To know about the advantages of employee referral in an organization.
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Data and Methodology In this project there is primary as well as secondary data. The primary data is collected through interview and telephonic conversation and secondary data is collected through Books and Internet.
Chapter Layout
Chapter 1. Introduction This chapter introduces the title and the study.
Chapter 2. Company Profile This chapter gives profile of TATA CONSULTANCY
SERVICES.
Chapter 3. Theoretical View This chapter covers view of Employee referral.
Chapter 4. Case Study This chapter covers case study of the Employee referral in TATA CONSULTANCY SERVICES
Chapter 5. Conclusion This chapter summarizes the result of the study.
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CHAPTER 2 COMPANY PROFILE TATA CONSULTANCY SERVICES
Tata Consultancy Services (TCS) is one of the world's leading information technology companies. Through its Global Network Delivery Model™, Innovation Network, and Solution Accelerators, TCS focuses on helping global organizations address their business challenges effectively.
Tata Consultancy Services Limited (TCS) is an Indian IT services, business solutions and outsourcing company
headquartered in Mumbai, India. It is the largest provider of information technology in Asia and second largest provider of business process outsourcing services in India. TCS has offices in over 47 countries with more than 142 branches across the globe and is a subsidiary of textiles and manufacturing conglomerate Tata Group.
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MISSION To help customers achieve their business objectives, by providing innovative, best-in- class consulting, IT solutions and services. To make it a joy for all stakeholders to work with us.
VALUES leading change, Integrity. Respect for the individual. Excellence by Learning and sharing.
HISTORY It began as the "Tata Computer Centre", for the company Tata Group whose main business was to provide computer services to other group companies. F C Kohli was the first general manager. J. R. D. Tata was the first chairman, followed by Pankaj Roy.
One of TCS' first assignments was to provide punched card services to a sister concern, Tata Steel (then TISCO). It later bagged the country's first software project, the Inter-Branch Reconciliation System (IBRS) for the Central Bank of India.[4] It also provided bureau services to Unit Trust of India, thus becoming one of the first companies to offer BPO services.
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In the early 1970s, Tata Consultancy Services started exporting its services. The company pioneered the global delivery model for IT services with its first offshore client in 1974. TCS's first international order came from Burroughs, one of the first business computer manufacturers. TCS was assigned to write code for the Burroughs machines for several US-based clients. This experience also helped TCS bag its first onsite project - the Institutional Group & Information Company (IGIC), a data centre for ten banks, which catered to two million customers in the US, assigned TCS the task of maintaining and upgrading its computer systems.
Bombay House, the head office of Tata Group In 1981, TCS set up India's first software research and development centre, the Tata Research Development and Design Center (TRDDC) in Pune The first client-dedicated offshore development center was set up for Compaq (then Tandem) in 1985.
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In 1979, TCS delivered an electronic depository and trading system called SECOM for SIS SegaInterSettle, Switzerland. It was by far the most complex project undertaken by an Indian IT company. TCS followed this up with System X for the Canadian Depository System and also automated the Johannesburg Stock (JSE). TCS associated with a Swiss partner, TKS Teknosoft, which it later acquired.
In the early 1990s, the Indian IT outsourcing industry grew tremendously due to the Y2K bug and the launch of a unified European currency, Euro. TCS pioneered the factory model for Y2K conversion and developed software tools which automated the conversion process and enabled third-party developers and clients to make use of it.
In 1999, TCS saw outsourcing opportunity in E-Commerce and related solutions and set up its E-Business division with ten people. By 2004, E-Business was contributing half a billion dollars (US) to TCS.
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On 9 August 2004, TCS became a publicly listed company, much later than its rivals, Infosys, Wipro and Mahindra Satyam. During 2005, TCS ventured into a new area for an Indian IT services company - Bioinformatics. In 2008, the company went through an internal restructuring exercise that executives claim would bring about agility to the organization. In 2011, the company entered the Small and medium enterprises (SME) market with cloud-based offerings. Products of TCS may be broadly classified into software solutions and services. TCS software products – TCS Bancs
is an embedded interactive software product for financial services and related activities. TCS technology products are specially designed for database integration, knowledge
management, and customer relationship management (CRM). Tax mantra integrated tax solution, TCS file authentication solution, TCS e-learning effectiveness measurement, and TCS business rules engine are some popular TCS software products.
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Natarajan Chandrasekaran ('Chandra') is the Chief Executive Officer (CEO) and Managing Director of the company.
Responsible for formulating and executing the company's global strategy, Chandra has been at helm of several key strategic transitions at TCS since 2002 when he took over the role as head of global sales. In his previous role as Chief Operating Officer, he was the architect of the new organization structure unveiled in 2008 which created multiple agile business units focused on domains and markets as well as built strategic business units in order to pursue new initiatives with the ability to invest, develop and mature new ideas.
Under his leadership, TCS has pioneered the creation of its unique Global Network Delivery Model (GNDM™) across five continents and ventured into new markets including Europe, China and Latin America. It added new business lines like BPO, Infrastructure and Assurance services. Chandra has also driven the domain diversification drive which has seen the company enter new verticals like Media and Information Services as well as Hi-tech. All of these have matured into sizeable businesses under his mentorship and guidance.
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Chandra
personifies
TCS‘
commitment
to
customer
satisfaction and high quality of deliverables. Through his experience in a variety of operating roles across TCS, he has built a reputation in the IT services industry for his exceptional ability to build and grow new businesses and nurture long-term relationships. He has also been a champion of software and business quality for the industry.
Financials Tata Consultancy Services during financial year April 2007– March 2008 held assets worth nearly US $3.03 billion. It generated profits of about US $0.97 billion from total sales of around US $4.32 billion. Awards and recognition
in 2008, Data Quest ranked TCS as #1 company among IT service providers. Business Week in 2007 placed TCS in its list of top 25 information technology companies. In 2007, TCS topped Global Services magazine's list of ?100 Best Performing IT Services?.
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Chapter 3 Theoretical View Employee Referral Program
Employee referral programs significantly lower the cost-per-hire compared to traditional corporate recruiting sources such as consultants, headhunters, newspaper advertising, Internet jobboards, college recruiting and career fairs.
The qualities of the candidates coming from employee referrals are far superiors to the candidates from other sources. Costing Payout to employees for referring their friends, contacts are much lesser than pay our to consultants.
Entire workforce is involved as compared to only the HR department, By referring, employees reinstates the faith and pride on their company. Reduction in recruitment costs, Employees does the first level of screening the selection percentage of referred candidates is very high compared to other sources.
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The offer acceptance rates are much higher, as the employees can strongly convince their friends and contacts to join the organization.
Homogenous crowd - Referred candidates stand on quality and perform better as they are with people whom they know or connect with and hence a better Cultural fit.
Right Expectations, The expectations of the company and the candidate are clearly spelt in advance by the employee to the candidate Extra Bonus; Employees see this as an extra income other than their salaries.
If you have an existing Employee Referral Program, our expertise and powerful technology enables you to expand and manage the program while energizing your employees for optimal results. If they do not currently an have Employee referral program, TCS can help you in implementing a complete web based program in few business days. In effect, our employee referral program software
communicates to your employees the importance of recruiting the best talent available to fuel growth and profitability.
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Employee Referral Saves Time, Saves Money & Delivers Quality The programs are valuable for four reasons, according to "Employee Referral Programs: Optimizing Your Most Effective Recruiting Tool," High-quality hires. Employees are unlikely to recommend people who they think are unqualified or unreliable.
A smoother approach (and one that Referral Networks provides) is to allow employees to see the jobs that are available and, with one click, send the information to several friends who might be potential candidates. The candidates can respond to the job site directly.
The employee spends a minimal amount of time in the process, and lets the friend decide, by reading about the job and its criteria for hiring, if it's right for him. "It takes a huge burden off the HR managers."
Employee referral programs are an outstanding way to attract potential hires to join your company at the least possible costs. In fact, it‘s the most cost-effective way to deal
with recruitment procedures in any company. The basic principle of friends helping friends get in the company just makes this an absolute choice to recruit people.
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The referrers supply quality candidates who are expected to perform better. This is because they want to make an impact on the organization by when showing their commitment to the organization.
Improved Candidate Quality The one-to-one direct relationship between the candidate and the referring employee and the exchange of knowledge that takes place allows the candidate to develop a strong understanding of the company, its business and the application and recruitment process. With this information the candidate is ideally placed to assess their own suitability and likelihood of success at the company and make an informed decision, with the support of the referring employee as to whether to apply. This is the start of the company‘s recruitment process where, at no cost to the employer, candidates and employees remove unsuitable and poor quality candidates, from the recruitment applications. process ensuring a consistently high quality of
Candidates who are interviewed are thoroughly prepared resulting in superior interview to job offer conversion rates. In addition, successful candidates get up to speed faster compared to other recruitment methods. Candidate ?fit‘ to the company‘s culture, departments and teams is improved as the expectations of candidate and employer match. This significantly increases the level of staff retention and
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builds a loyal and committed workforce - ultimately reducing the company‘s future recruitment requirements.
Reduction in Recruitment Expenditure Employee referral scheme‘s allows existing employees to screen, select and refer only the best candidates to the recruitment process. This eliminates the often considerable cost of third parties service providers who would have previously conducted the screening and selection process.
The costs of operating an employee referral scheme extends to the cash bonus‘ paid to employees and internal promotion and administration, the total of which is considerably lower than the expense of recruiting using traditional recruitment consultants, headhunters and online recruitment methods As candidate quality improves and interview to job offer conversion rates increase the amount of time spent interviewing decreases meaning the company‘s Human Resources headcount can be streamlined and be used more efficiently. Marketing and advertising spend decreases as existing employee‘s source potential candidates from the existing personal networks of friends, family, acquaintances and associates. An employee referral scheme is only as good as the volume and quality of candidates applying through the channel.
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Referrals from existing employees have been shown to be some of the best employees. Study after study has shown that employees referred by existing employees perform better and last longer on average.
There are many benefits from a well designed and implemented employee referral program in addition to getting better employees. The first area of improvement is a significantly reduced cost per hire for brings on new employees. Employee recruiting is expensive. Running ads, posting on-line and using headhunters all cost money. In many cases multiple sources will be used to build a candidate pool and the costs add up. But giving existing employees a referral bonus can be much more cost effective. There is only one payment. Calculate an amount that is both attractive to your employees and cost effective for the business. A good recommendation is 20-25% of the normal cost per hire number.
The good referral program is the program can be a significant morale booster for existing employees. They are much happier when the money spent on recruiting "stays in the family" instead of being spent on outside sources. Existing employees appreciate the opportunity to make more money while helping the company at the same time.
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4 steps of employee referral program:-
Step 1 Motivate.
This is easy and many companies are already doing this. First, ensure that every employee understands that helping a friend to get a job should be motivation enough. Additionally a monetary incentive, to compensate for the time and to make things interesting, can go some way in enthusing employees to participate.
Step 2 Make easy or facilitate. Let‘s face it - most employees believe/feel/are over-worked. On top of all their work, to actively keep track of job openings in their company and to match that with their friends‘ profiles can be quite taxing. Once identified, to liaison, to hand-hold, to
introduce the right parties, and set the ball rolling between the candidate and the right HR person can be quite time consuming. This is where JobsByRef.com helps in making the match-making process a lot easier on the employee.
a.
Dissemination
of
job
opening
detail:
JobsByRef.com
automatically informs all your employees about all the currently open job postings in a single page.
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b. Finding the right candidate from among the friends: The first step for an employee is to inform his/her friends circle about job openings. By integrating with Facebook, LinkedIn and Twitter, JobsByRef.com allows each employee to send out the information to their friends with the click of a button. By allowing the job to be posted on the networks of the employees, JobsByRef.com ensures that the right candidates from these networks find the job rather than relying solely on the judgment of the employee in choosing the right candidate.
c. Connecting the candidate to the right person within the organization: JobsByRef.com automatically creates a unique link for each job so that the candidate knows how to reach the right person without the employee having to get involved. d. Claiming a stake: Employees don‘t want to do all the work and then miss out on the payment because their role in the referral process was not clear. JobsByRef.com keeps track of who applied through which employee‘s promotion activities so the employee never has to worry about following up.
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Step 3 Monitor
HR team to keep track of the promotional activities of every employee, so that you know exactly who is actively promoting it and who is not. Every job related email, tweet, and update are recorded so you can ensure good participation from all quarters.
Step 4
Measure.
Finally, when you get the candidates pouring in, you have all
the
information about where they came from, whose circle they belong to and who has provided the recommendation. You can study which sources are getting you the best results, who are your star performers and who are the laggards. Armed with this, you can go back and tweak your messages and process to ensure that your employee referral program is on a continuous upward trend.
ADVANTAGES OF EMPLOYEE REFERRAL
The employee referral system is the preferred source of recruitment for many IT organizations. Thoughtfully implemented employee referral plans are excellent ways to attract the best people at the lowest cost.
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The referrers also supply quality candidates who are expected to perform better. This is because they want to make an impact on the organization by showing their commitment to the
organization. Moreover, the candidates referred are well versed with information about the company‘s culture and goals as provided by their friends. They are informed, well in advance, about the company‘s
Most precious business capital
Another good benefit of employee referrals is that since are mobilizing a most precious business capital a employees you are in a way training them to be more social-bound and interact with their friends and acquaintances. In the end, with such a good training ground for a employees, a company is sure to reap the rewards for having an employee base filled with confident and socially-skilled human capital.
Easy to hired candidates
It is unlikely that a employees would recommend someone who cannot prove his worth. It‘s career suicide for them if they do that, so you can be sure that you are giving a company‘s orientation papers and tests to candidates who have better chances of getting hired.
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Speeds up recruiting process
Since one of the primary considerations of recruiting is the hiring process, you can have higher odds to get someone on the job sooner, as a employees would mostly recommend people who they know are ready to make a career change. This speeds up the transition time to fill a employee seats and get a business running at full capacity.
Long term stability in the organization
According to a survey conducted by Ohio State University, employees who were hired through employee referral systems stayed with the job longer than other employees who were hired out of other recruitment means. The survey revealed a 25% retention rate for those who were referred. This trend can be attributed to the kind of relationship or bond employees have, since they know each other right from the start of
the recruitment process.
Less expensive Another advantage of employee referral systems is that employees are not likely to demand expensive rewards for their successful referrals, compared to the high costs of hiring third
party recruitment agencies or doing some newspaper ads. In fact,
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according to some figures gathered by Referral Networks, 85% of the respondents said they would be motivated by a reward of $1,000 or less, while 32% of those said they would be happy with a sum between $100 and $400.
Good Performance Referrals from existing employees have been shown to be some of the best employees. Study after study has shown that employees referred by existing employees perform better and last longer on average.
Obstacles in employee referral program Over reliance on an employee-referral program can lead to under representation of certain protected groups in a company‘s job-applicant pool. This can add credence to charges of employment discrimination from rejected candidates. Some competing businesses may retaliate against your company for stealing their happily employed workers via employee-referral programs.
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Excessive reliance upon an employee-referral program can lead to an inbred organization that lacks breadth of ideas, and it can foster a "stick-together" attitude that masks underlying problems in organizational behavior. Relying too heavily on an employeereferral program can also create cliques within an organization, leading to resentment and friction with other employees.
Some managers may have biases against employee-referral programs, feeling that referrals are favors done for shiftless inlaws rather than for the company.
Referrals may refrain from doing so in the future if they find their friends getting strung along or ignored. That undermines your entire program
Overly
restrictive
bonus
qualifications
or
excessive
qualifications for employee referrals can lead to disillusionment with an employee-referral program. Under such circumstances, an employee-referral program may actually become a source of employee discontent.
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Chapter 4 Case Study
Employee referral is a business program that encourages current employees to suggest talented friends or contacts for open positions. The program often runs on a bonus system, where referring employees are rewarded if their candidate is chosen for a job. While employee referral can be an excellent way to take advantage of employee professional networks, it must be run efficiently and fairly in order to be successful.
TCS employees are in an excellent position to recommend good candidates for available openings. Having insider knowledge about the demands and atmosphere of the workplace may allow workers to think of friends or colleagues who would fit well into the existing pattern. Additionally, allowing employee referral may give management more insight into the character and abilities of a candidate than a simple resume or interview may permit. Since current employees know they may be judged partially based on the performance of their candidates, they are likely to submit highly qualified individuals for consideration.
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One of
the
keys
to
crafting
a
successful employee referral system is the correct application of rewards and bonuses. While an over-generous reward may distract workers from performing their actual job, a minuscule bonus program is unlikely to attract much attention. It is important for employers to consider the time and effort saved by having a good referralprogram when setting bonus levels; getting a ready list of pre-screened job candidates from employees may save a company dozens of hours of interviewing and extensive recruitment costs and may warrant a comparable reward. If handing out monetary bonuses is not costefficient, consider offering extra time off, reserved parking spaces, or other non-cash incentives.
Another
major
factor is
in the
the structure
efficiency and format
of of
an employee referral program
the referral itself. Some companies opt to have employees submit a simple letter of recommendation, but others prefer a more structured system that requires answers to specific questions about the job candidate. Performing regular assessment of the program can help determine if the referral structure is actually providing useful
information, or simply filling up space with under-qualified candidates. Businesses may also limit the amount of referrals an employee may submit per year in order to increase the quality of submissions.
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For an employee crafting a referral, honesty and objective assessment are important considerations. While the job may be a great opportunity for a friend, putting an unprepared or ill-qualified person up for interview may reflect poorly on both the candidate and the employee. Inflating expectations about the candidate by writing a too-strong referral can also hurt his or her chances of living up to the glowing praise during an interview.
“BRING YOUR BUDDY” Bring your buddy this referral scheme help to recruiting best candidates for organization .it motivate to employees participating in organizational program. it is very effective tool of employee referral for recruiting an organization. This programs creates opportunities to employees earn extra money other than salary this concept is work on
“WORK WITH FRIEND IS ALWAYS BETTER THAN STRANGER” This concept is very beneficial work with friends is better than stranger. It motivate employees bring your friends and make a carries of friends in organization. The TCS give more important because friend can easily explain role and responsibility and help them in critical situation if he performs not well.
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This
scheme
encourage
to
employees
connect
with
organization for long term. Now-a-days world is very competitive other organization always try to catch talented people for their organization. So this scheme tries to connect the employees and his friend for long term in the organization.
This program is run on monthly basis in this organization. Employee updates his friend profile on intranet portal of TCS. In this portal employee update his friend profile that had more than 1 year experience. After updating profile HR department synchronies the C.V and after selecting a profile call a friend of employee for personal interview. If the friend is selected the employee gets a reward Rs.5000/ - on or proportional basis.
BENEFITS OF EMPLOYEE REFERRAL PROGRAMS All major IT, ITES and BPO Companies today are looking for ways to hire the best people at the lowest possible cost. They are also looking for ways to retain their employees.HR professionals agree that the best source of qualified talent is to effectively leverage their own employees.
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The market is ready for recruiting solutions that extend brand and culture Benefits of Employee-Referral Programs One benefit of an employee-referral program is that it can provide the employer with a source of passive candidates — those workers who are not actively seeking new jobs. This not only expands the employer‘s pool of potential candidates but also tends to produce higher-quality candidates.
Candidates referred by employees also tend to be of higher quality because the referring employee usually screens his or her referrals closely. After all, his or her reputation is somewhat on the line with every person he refers for a position. Referring a string of unqualified candidates reflects poorly on the referring employee‘s judgment, which may affect his or her own career prospects.
The usual monetary bonus paid to a referring employee for a successful referral can be a significant morale booster. It reinforces the tendency to refer high-quality candidates to one‘s own company, even when no positions are available. This helps to establish an ongoing recruitment process.
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Employee-referral programs can replace more expensive recruitment channels such as newspaper advertising,
employment agencies, and job fairs and so on.
Employee-referral programs are especially effective in the case of highly specialized positions that might be difficult to fill through conventional channels. People tend to associate with others in their professions, which gives them access to specialized or rare talent.
The referral programs are made tempting by the employers so that employees are motivated enough to refer their known ones to their organization. The TCS, are giving up huge rewards to the employees who bring in candidates, specially for hard-tofill positions, and award them when the candidate is inducted.
Precautionary measures take care by the employee when referring candidates. Practical ways to pump up employees so they introduce you to highly-quality job candidates who may potentially fill specific organizational slots.
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1. Employees don't see recruitment as a high priority. Their own daily business priorities capture their attention. Thus, human resource departments need to create devices to encourage participation.
2. Employees have difficulty matching job requirements against the talents of their friends and associates. For instance, an employee may know her friend works in data processing, but she doesn't know if he qualifies for the posted position "MIS Network Specialist IV." This difficulty in matching talents to vacancies prevents referrals. To overcome this obstacle, employees need to know who can give them information about a position's requirements.
3. Employees make faulty assumptions about the interest level of friends and associates. Referrals normally don't come unless a friend explicitly states interest in seeking a new job. However, many will explore a "better opportunity," even if not actively looking for one. Therefore, employees need to get the message: "Refer good people; it is not necessary to judge if they are keenly interested right now."
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4. Recommenders may confuse friendship with job competence. Factors such as bias, nepotism and eagerness to see their friends I the company may come in the way of hiring a suitable candidate.
STEPS OF DESIGNING SUCCESS EMPLOYEE REFERRAL
Clearly define the rules: Make certain the program rules are clearly defined. It may sound like simple advice, but ATS overlooked this detail in the early stages of our program. We requested resumes for potential new hires without clearly describing the skills needed. As a result, we had a deluge of all types of resumes. ATS now posts job descriptions with each opening.
Build a budget: A successful program doesn‘t have to be highcost. Calculate current recruiting costs and evaluate areas from which you can reallocate funds to the employee referral program. Second, identify the reward—make the bonus fit the organization and adapt the rewards to the corporate culture.
Keep employees interested: Prompt payment (within 30 to 90 days of hire date) for successful referrals is one of the most critical contributors to program success. Also, keep the program fresh—
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adopt a new theme every year that reflects the company culture. Use company events such as a forum to present major prizes and awards and use smaller giveaways to publicize the program.
Your workforce is the key: A successful referral program can turn your entire workforce into a recruiting team, providing an advantage in a highly competitive job market. It also rewards current employees who contribute to the success of your organization.
The steps should be, while preparing the employee referral program:
1. Policy should be meant for a particular category of employees. This will help in maintaining the professionalism in the company. 2. Employees must be made aware of the parameters expected by the company from new recruit. 3. Monetary benefits can be shared with the employee whose recommendations helped organization to finalize management in selecting the candidate. 4. These monetary benefits can be shared in number of stages e.g 15% of cost of hiring may be paid to concerned employee on joining of new employee. Another 25 % after completion of one month of service by new joined and balance after the completion of three
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months of service or after confirmation of employee in to services of company. 5. The reasons behind the above is that the recommending employee will help the new joined in apprising the culture of organization thus reducing the settle down time. 6. Back ground of the new selection can be verified from the present employee. 7. The recommended employee should have minimum two years of service in the organization. 8. Employees who have been issued warning letter or charge sheeted in the past should be barred from entering the scheme. 9. Not more than two recommendations should be accepted through one employee during a year. This number may depend upon requirement and present strength of organization. 10. Negative impacts like unionism may enter into the organization. Unity among the known are more as compared to independent. Psychometric impacts on known cases are more effective and may result in frustration and demoralization.
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HR
smart’s Employee
Referral
System complements
the Applicant Tracking System (ATS) and features:
Candidate submission directly into a ATS. When employees submit their contacts for a position, the information is reflected on the recruiter desktop, so review and next steps are simple.
Variable rewards based on position. Recruiters can send selected jobs to the employee referral system and scale rewards based on the level, location or other select criteria of the position, so higher rewards are granted for talent that is difficult to recruit. Rewards can also be designated for each step the candidate passes through, such as a small reward for the interview and a larger award for getting hired.
Status
tracking
of
submitted
candidates
and
rewards. Employees can submit candidates and track them through the interview process. When a candidate becomes a new hire, the employee can find out when they will receive their reward through the solution—saving the recruiting staff valuable time on follow up. Managed inventory in the system. The solution acts as a database for a rewards, so an inventory can be easily reviewed and maintained, whether it is gift cards, merchandise, travel and
35
incentives or cash. In addition, HR smart Employee Referral System, recruiters can track who received a reward and when it was dispersed.
Employee-referral programs are not new. They have been used for decades to fill about 30 percent of job openings, with varying degrees of success.
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Chapter 5 Conclusion
Employee referral refers to the recruitment in the organization of an individual by taking the reference of other employee. It is one recruitment strategy.
They have concept known as bring your buddy. It means to invite a friend for the job.
The employee referral system is the preferred source of recruitment for many IT organizations. Thoughtfully implemented employee referral plans are excellent ways to attract the best people at the lowest cost.
Employee referral programs are an outstanding way to attract potential hires to join your company at the least possible costs. In fact, it‘s the most cost-effective way to deal with recruitment procedures in a company. The basic principle of friends helping friends get in the company just makes this an absolute choice to recruit people.
37
Employee referral programs increase your company's stable and boost your earnings undeniably, a tight labor market affects companies looking to expand their talent pool.
The purpose of this strategy is to encourage employees to reserve their scarce referral opportunities for the highest-qualified candidates that they know. On the downside, such a policy can reduce the number of employee referrals per year.
Some competing businesses may retaliate against your company for stealing their happily employed workers via employee-referral programs.
38
doc_387091989.pdf
Employee referral is an internal recruitment method employed by organizations to identify potential candidates from their existing employees' social networks. An employee referral scheme encourages a company's existing employees to select and recruit the suitable candidates from their social networks. As a reward, the employer typically pays the referring employee a referral bonus.
employee referrals help in cutting costs which are associated with hiring. Companies work on reducing the average cost per hire. Recruiting candidates through the referral system results in huge savings as large amounts on advertisements and placement agencies costs are saved. Companies reveal that the cost of hiring a referral candidate works out to be 60 percent to 70 percent cheaper than that of going through an external agency and recruitment advertisement.
Recruiting through referral programs help in finding the right person with right skills and that too at a nominal cost. It is the most cheapest but effective mode of recruitment. It also help foster a stronger commitment with employees.
1
Recruiting
candidates
using
employee
referral
is
widely
acknowledged as being the most cost effective and efficient recruitment method to recruit candidates and as such, employers of all sizes, across all industries are trying to increases the volumes they recruit through this channel Research suggests that people hired through employee referrals tend to have longer tenure and higher job satisfaction. Yet, national surveys indicate that only 30 to 40 percent of positions are filled this way.
2
About the STUDY
Title of the Study The present study is titled as ?EMPLOYEE REFERRAL? with special reference to ?TATA CONSULTANCY SERVICE?.
Objectives of Project To know about importance of Employee Referral in an organization. To acquire details about how the organization is recruiting best candidates with employee referral To acquire details of how the organization is design employee referral policy . To know how the employee referral is beneficial to the organization. To know about the advantages of employee referral in an organization.
3
Data and Methodology In this project there is primary as well as secondary data. The primary data is collected through interview and telephonic conversation and secondary data is collected through Books and Internet.
Chapter Layout
Chapter 1. Introduction This chapter introduces the title and the study.
Chapter 2. Company Profile This chapter gives profile of TATA CONSULTANCY
SERVICES.
Chapter 3. Theoretical View This chapter covers view of Employee referral.
Chapter 4. Case Study This chapter covers case study of the Employee referral in TATA CONSULTANCY SERVICES
Chapter 5. Conclusion This chapter summarizes the result of the study.
4
CHAPTER 2 COMPANY PROFILE TATA CONSULTANCY SERVICES
Tata Consultancy Services (TCS) is one of the world's leading information technology companies. Through its Global Network Delivery Model™, Innovation Network, and Solution Accelerators, TCS focuses on helping global organizations address their business challenges effectively.
Tata Consultancy Services Limited (TCS) is an Indian IT services, business solutions and outsourcing company
headquartered in Mumbai, India. It is the largest provider of information technology in Asia and second largest provider of business process outsourcing services in India. TCS has offices in over 47 countries with more than 142 branches across the globe and is a subsidiary of textiles and manufacturing conglomerate Tata Group.
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MISSION To help customers achieve their business objectives, by providing innovative, best-in- class consulting, IT solutions and services. To make it a joy for all stakeholders to work with us.
VALUES leading change, Integrity. Respect for the individual. Excellence by Learning and sharing.
HISTORY It began as the "Tata Computer Centre", for the company Tata Group whose main business was to provide computer services to other group companies. F C Kohli was the first general manager. J. R. D. Tata was the first chairman, followed by Pankaj Roy.
One of TCS' first assignments was to provide punched card services to a sister concern, Tata Steel (then TISCO). It later bagged the country's first software project, the Inter-Branch Reconciliation System (IBRS) for the Central Bank of India.[4] It also provided bureau services to Unit Trust of India, thus becoming one of the first companies to offer BPO services.
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In the early 1970s, Tata Consultancy Services started exporting its services. The company pioneered the global delivery model for IT services with its first offshore client in 1974. TCS's first international order came from Burroughs, one of the first business computer manufacturers. TCS was assigned to write code for the Burroughs machines for several US-based clients. This experience also helped TCS bag its first onsite project - the Institutional Group & Information Company (IGIC), a data centre for ten banks, which catered to two million customers in the US, assigned TCS the task of maintaining and upgrading its computer systems.
Bombay House, the head office of Tata Group In 1981, TCS set up India's first software research and development centre, the Tata Research Development and Design Center (TRDDC) in Pune The first client-dedicated offshore development center was set up for Compaq (then Tandem) in 1985.
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In 1979, TCS delivered an electronic depository and trading system called SECOM for SIS SegaInterSettle, Switzerland. It was by far the most complex project undertaken by an Indian IT company. TCS followed this up with System X for the Canadian Depository System and also automated the Johannesburg Stock (JSE). TCS associated with a Swiss partner, TKS Teknosoft, which it later acquired.
In the early 1990s, the Indian IT outsourcing industry grew tremendously due to the Y2K bug and the launch of a unified European currency, Euro. TCS pioneered the factory model for Y2K conversion and developed software tools which automated the conversion process and enabled third-party developers and clients to make use of it.
In 1999, TCS saw outsourcing opportunity in E-Commerce and related solutions and set up its E-Business division with ten people. By 2004, E-Business was contributing half a billion dollars (US) to TCS.
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On 9 August 2004, TCS became a publicly listed company, much later than its rivals, Infosys, Wipro and Mahindra Satyam. During 2005, TCS ventured into a new area for an Indian IT services company - Bioinformatics. In 2008, the company went through an internal restructuring exercise that executives claim would bring about agility to the organization. In 2011, the company entered the Small and medium enterprises (SME) market with cloud-based offerings. Products of TCS may be broadly classified into software solutions and services. TCS software products – TCS Bancs
is an embedded interactive software product for financial services and related activities. TCS technology products are specially designed for database integration, knowledge
management, and customer relationship management (CRM). Tax mantra integrated tax solution, TCS file authentication solution, TCS e-learning effectiveness measurement, and TCS business rules engine are some popular TCS software products.
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Natarajan Chandrasekaran ('Chandra') is the Chief Executive Officer (CEO) and Managing Director of the company.
Responsible for formulating and executing the company's global strategy, Chandra has been at helm of several key strategic transitions at TCS since 2002 when he took over the role as head of global sales. In his previous role as Chief Operating Officer, he was the architect of the new organization structure unveiled in 2008 which created multiple agile business units focused on domains and markets as well as built strategic business units in order to pursue new initiatives with the ability to invest, develop and mature new ideas.
Under his leadership, TCS has pioneered the creation of its unique Global Network Delivery Model (GNDM™) across five continents and ventured into new markets including Europe, China and Latin America. It added new business lines like BPO, Infrastructure and Assurance services. Chandra has also driven the domain diversification drive which has seen the company enter new verticals like Media and Information Services as well as Hi-tech. All of these have matured into sizeable businesses under his mentorship and guidance.
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Chandra
personifies
TCS‘
commitment
to
customer
satisfaction and high quality of deliverables. Through his experience in a variety of operating roles across TCS, he has built a reputation in the IT services industry for his exceptional ability to build and grow new businesses and nurture long-term relationships. He has also been a champion of software and business quality for the industry.
Financials Tata Consultancy Services during financial year April 2007– March 2008 held assets worth nearly US $3.03 billion. It generated profits of about US $0.97 billion from total sales of around US $4.32 billion. Awards and recognition
in 2008, Data Quest ranked TCS as #1 company among IT service providers. Business Week in 2007 placed TCS in its list of top 25 information technology companies. In 2007, TCS topped Global Services magazine's list of ?100 Best Performing IT Services?.
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Chapter 3 Theoretical View Employee Referral Program
Employee referral programs significantly lower the cost-per-hire compared to traditional corporate recruiting sources such as consultants, headhunters, newspaper advertising, Internet jobboards, college recruiting and career fairs.
The qualities of the candidates coming from employee referrals are far superiors to the candidates from other sources. Costing Payout to employees for referring their friends, contacts are much lesser than pay our to consultants.
Entire workforce is involved as compared to only the HR department, By referring, employees reinstates the faith and pride on their company. Reduction in recruitment costs, Employees does the first level of screening the selection percentage of referred candidates is very high compared to other sources.
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The offer acceptance rates are much higher, as the employees can strongly convince their friends and contacts to join the organization.
Homogenous crowd - Referred candidates stand on quality and perform better as they are with people whom they know or connect with and hence a better Cultural fit.
Right Expectations, The expectations of the company and the candidate are clearly spelt in advance by the employee to the candidate Extra Bonus; Employees see this as an extra income other than their salaries.
If you have an existing Employee Referral Program, our expertise and powerful technology enables you to expand and manage the program while energizing your employees for optimal results. If they do not currently an have Employee referral program, TCS can help you in implementing a complete web based program in few business days. In effect, our employee referral program software
communicates to your employees the importance of recruiting the best talent available to fuel growth and profitability.
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Employee Referral Saves Time, Saves Money & Delivers Quality The programs are valuable for four reasons, according to "Employee Referral Programs: Optimizing Your Most Effective Recruiting Tool," High-quality hires. Employees are unlikely to recommend people who they think are unqualified or unreliable.
A smoother approach (and one that Referral Networks provides) is to allow employees to see the jobs that are available and, with one click, send the information to several friends who might be potential candidates. The candidates can respond to the job site directly.
The employee spends a minimal amount of time in the process, and lets the friend decide, by reading about the job and its criteria for hiring, if it's right for him. "It takes a huge burden off the HR managers."
Employee referral programs are an outstanding way to attract potential hires to join your company at the least possible costs. In fact, it‘s the most cost-effective way to deal
with recruitment procedures in any company. The basic principle of friends helping friends get in the company just makes this an absolute choice to recruit people.
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The referrers supply quality candidates who are expected to perform better. This is because they want to make an impact on the organization by when showing their commitment to the organization.
Improved Candidate Quality The one-to-one direct relationship between the candidate and the referring employee and the exchange of knowledge that takes place allows the candidate to develop a strong understanding of the company, its business and the application and recruitment process. With this information the candidate is ideally placed to assess their own suitability and likelihood of success at the company and make an informed decision, with the support of the referring employee as to whether to apply. This is the start of the company‘s recruitment process where, at no cost to the employer, candidates and employees remove unsuitable and poor quality candidates, from the recruitment applications. process ensuring a consistently high quality of
Candidates who are interviewed are thoroughly prepared resulting in superior interview to job offer conversion rates. In addition, successful candidates get up to speed faster compared to other recruitment methods. Candidate ?fit‘ to the company‘s culture, departments and teams is improved as the expectations of candidate and employer match. This significantly increases the level of staff retention and
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builds a loyal and committed workforce - ultimately reducing the company‘s future recruitment requirements.
Reduction in Recruitment Expenditure Employee referral scheme‘s allows existing employees to screen, select and refer only the best candidates to the recruitment process. This eliminates the often considerable cost of third parties service providers who would have previously conducted the screening and selection process.
The costs of operating an employee referral scheme extends to the cash bonus‘ paid to employees and internal promotion and administration, the total of which is considerably lower than the expense of recruiting using traditional recruitment consultants, headhunters and online recruitment methods As candidate quality improves and interview to job offer conversion rates increase the amount of time spent interviewing decreases meaning the company‘s Human Resources headcount can be streamlined and be used more efficiently. Marketing and advertising spend decreases as existing employee‘s source potential candidates from the existing personal networks of friends, family, acquaintances and associates. An employee referral scheme is only as good as the volume and quality of candidates applying through the channel.
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Referrals from existing employees have been shown to be some of the best employees. Study after study has shown that employees referred by existing employees perform better and last longer on average.
There are many benefits from a well designed and implemented employee referral program in addition to getting better employees. The first area of improvement is a significantly reduced cost per hire for brings on new employees. Employee recruiting is expensive. Running ads, posting on-line and using headhunters all cost money. In many cases multiple sources will be used to build a candidate pool and the costs add up. But giving existing employees a referral bonus can be much more cost effective. There is only one payment. Calculate an amount that is both attractive to your employees and cost effective for the business. A good recommendation is 20-25% of the normal cost per hire number.
The good referral program is the program can be a significant morale booster for existing employees. They are much happier when the money spent on recruiting "stays in the family" instead of being spent on outside sources. Existing employees appreciate the opportunity to make more money while helping the company at the same time.
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4 steps of employee referral program:-
Step 1 Motivate.
This is easy and many companies are already doing this. First, ensure that every employee understands that helping a friend to get a job should be motivation enough. Additionally a monetary incentive, to compensate for the time and to make things interesting, can go some way in enthusing employees to participate.
Step 2 Make easy or facilitate. Let‘s face it - most employees believe/feel/are over-worked. On top of all their work, to actively keep track of job openings in their company and to match that with their friends‘ profiles can be quite taxing. Once identified, to liaison, to hand-hold, to
introduce the right parties, and set the ball rolling between the candidate and the right HR person can be quite time consuming. This is where JobsByRef.com helps in making the match-making process a lot easier on the employee.
a.
Dissemination
of
job
opening
detail:
JobsByRef.com
automatically informs all your employees about all the currently open job postings in a single page.
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b. Finding the right candidate from among the friends: The first step for an employee is to inform his/her friends circle about job openings. By integrating with Facebook, LinkedIn and Twitter, JobsByRef.com allows each employee to send out the information to their friends with the click of a button. By allowing the job to be posted on the networks of the employees, JobsByRef.com ensures that the right candidates from these networks find the job rather than relying solely on the judgment of the employee in choosing the right candidate.
c. Connecting the candidate to the right person within the organization: JobsByRef.com automatically creates a unique link for each job so that the candidate knows how to reach the right person without the employee having to get involved. d. Claiming a stake: Employees don‘t want to do all the work and then miss out on the payment because their role in the referral process was not clear. JobsByRef.com keeps track of who applied through which employee‘s promotion activities so the employee never has to worry about following up.
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Step 3 Monitor
HR team to keep track of the promotional activities of every employee, so that you know exactly who is actively promoting it and who is not. Every job related email, tweet, and update are recorded so you can ensure good participation from all quarters.
Step 4
Measure.
Finally, when you get the candidates pouring in, you have all
the
information about where they came from, whose circle they belong to and who has provided the recommendation. You can study which sources are getting you the best results, who are your star performers and who are the laggards. Armed with this, you can go back and tweak your messages and process to ensure that your employee referral program is on a continuous upward trend.
ADVANTAGES OF EMPLOYEE REFERRAL
The employee referral system is the preferred source of recruitment for many IT organizations. Thoughtfully implemented employee referral plans are excellent ways to attract the best people at the lowest cost.
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The referrers also supply quality candidates who are expected to perform better. This is because they want to make an impact on the organization by showing their commitment to the
organization. Moreover, the candidates referred are well versed with information about the company‘s culture and goals as provided by their friends. They are informed, well in advance, about the company‘s
Most precious business capital
Another good benefit of employee referrals is that since are mobilizing a most precious business capital a employees you are in a way training them to be more social-bound and interact with their friends and acquaintances. In the end, with such a good training ground for a employees, a company is sure to reap the rewards for having an employee base filled with confident and socially-skilled human capital.
Easy to hired candidates
It is unlikely that a employees would recommend someone who cannot prove his worth. It‘s career suicide for them if they do that, so you can be sure that you are giving a company‘s orientation papers and tests to candidates who have better chances of getting hired.
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Speeds up recruiting process
Since one of the primary considerations of recruiting is the hiring process, you can have higher odds to get someone on the job sooner, as a employees would mostly recommend people who they know are ready to make a career change. This speeds up the transition time to fill a employee seats and get a business running at full capacity.
Long term stability in the organization
According to a survey conducted by Ohio State University, employees who were hired through employee referral systems stayed with the job longer than other employees who were hired out of other recruitment means. The survey revealed a 25% retention rate for those who were referred. This trend can be attributed to the kind of relationship or bond employees have, since they know each other right from the start of
the recruitment process.
Less expensive Another advantage of employee referral systems is that employees are not likely to demand expensive rewards for their successful referrals, compared to the high costs of hiring third
party recruitment agencies or doing some newspaper ads. In fact,
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according to some figures gathered by Referral Networks, 85% of the respondents said they would be motivated by a reward of $1,000 or less, while 32% of those said they would be happy with a sum between $100 and $400.
Good Performance Referrals from existing employees have been shown to be some of the best employees. Study after study has shown that employees referred by existing employees perform better and last longer on average.
Obstacles in employee referral program Over reliance on an employee-referral program can lead to under representation of certain protected groups in a company‘s job-applicant pool. This can add credence to charges of employment discrimination from rejected candidates. Some competing businesses may retaliate against your company for stealing their happily employed workers via employee-referral programs.
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Excessive reliance upon an employee-referral program can lead to an inbred organization that lacks breadth of ideas, and it can foster a "stick-together" attitude that masks underlying problems in organizational behavior. Relying too heavily on an employeereferral program can also create cliques within an organization, leading to resentment and friction with other employees.
Some managers may have biases against employee-referral programs, feeling that referrals are favors done for shiftless inlaws rather than for the company.
Referrals may refrain from doing so in the future if they find their friends getting strung along or ignored. That undermines your entire program
Overly
restrictive
bonus
qualifications
or
excessive
qualifications for employee referrals can lead to disillusionment with an employee-referral program. Under such circumstances, an employee-referral program may actually become a source of employee discontent.
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Chapter 4 Case Study
Employee referral is a business program that encourages current employees to suggest talented friends or contacts for open positions. The program often runs on a bonus system, where referring employees are rewarded if their candidate is chosen for a job. While employee referral can be an excellent way to take advantage of employee professional networks, it must be run efficiently and fairly in order to be successful.
TCS employees are in an excellent position to recommend good candidates for available openings. Having insider knowledge about the demands and atmosphere of the workplace may allow workers to think of friends or colleagues who would fit well into the existing pattern. Additionally, allowing employee referral may give management more insight into the character and abilities of a candidate than a simple resume or interview may permit. Since current employees know they may be judged partially based on the performance of their candidates, they are likely to submit highly qualified individuals for consideration.
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One of
the
keys
to
crafting
a
successful employee referral system is the correct application of rewards and bonuses. While an over-generous reward may distract workers from performing their actual job, a minuscule bonus program is unlikely to attract much attention. It is important for employers to consider the time and effort saved by having a good referralprogram when setting bonus levels; getting a ready list of pre-screened job candidates from employees may save a company dozens of hours of interviewing and extensive recruitment costs and may warrant a comparable reward. If handing out monetary bonuses is not costefficient, consider offering extra time off, reserved parking spaces, or other non-cash incentives.
Another
major
factor is
in the
the structure
efficiency and format
of of
an employee referral program
the referral itself. Some companies opt to have employees submit a simple letter of recommendation, but others prefer a more structured system that requires answers to specific questions about the job candidate. Performing regular assessment of the program can help determine if the referral structure is actually providing useful
information, or simply filling up space with under-qualified candidates. Businesses may also limit the amount of referrals an employee may submit per year in order to increase the quality of submissions.
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For an employee crafting a referral, honesty and objective assessment are important considerations. While the job may be a great opportunity for a friend, putting an unprepared or ill-qualified person up for interview may reflect poorly on both the candidate and the employee. Inflating expectations about the candidate by writing a too-strong referral can also hurt his or her chances of living up to the glowing praise during an interview.
“BRING YOUR BUDDY” Bring your buddy this referral scheme help to recruiting best candidates for organization .it motivate to employees participating in organizational program. it is very effective tool of employee referral for recruiting an organization. This programs creates opportunities to employees earn extra money other than salary this concept is work on
“WORK WITH FRIEND IS ALWAYS BETTER THAN STRANGER” This concept is very beneficial work with friends is better than stranger. It motivate employees bring your friends and make a carries of friends in organization. The TCS give more important because friend can easily explain role and responsibility and help them in critical situation if he performs not well.
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This
scheme
encourage
to
employees
connect
with
organization for long term. Now-a-days world is very competitive other organization always try to catch talented people for their organization. So this scheme tries to connect the employees and his friend for long term in the organization.
This program is run on monthly basis in this organization. Employee updates his friend profile on intranet portal of TCS. In this portal employee update his friend profile that had more than 1 year experience. After updating profile HR department synchronies the C.V and after selecting a profile call a friend of employee for personal interview. If the friend is selected the employee gets a reward Rs.5000/ - on or proportional basis.
BENEFITS OF EMPLOYEE REFERRAL PROGRAMS All major IT, ITES and BPO Companies today are looking for ways to hire the best people at the lowest possible cost. They are also looking for ways to retain their employees.HR professionals agree that the best source of qualified talent is to effectively leverage their own employees.
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The market is ready for recruiting solutions that extend brand and culture Benefits of Employee-Referral Programs One benefit of an employee-referral program is that it can provide the employer with a source of passive candidates — those workers who are not actively seeking new jobs. This not only expands the employer‘s pool of potential candidates but also tends to produce higher-quality candidates.
Candidates referred by employees also tend to be of higher quality because the referring employee usually screens his or her referrals closely. After all, his or her reputation is somewhat on the line with every person he refers for a position. Referring a string of unqualified candidates reflects poorly on the referring employee‘s judgment, which may affect his or her own career prospects.
The usual monetary bonus paid to a referring employee for a successful referral can be a significant morale booster. It reinforces the tendency to refer high-quality candidates to one‘s own company, even when no positions are available. This helps to establish an ongoing recruitment process.
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Employee-referral programs can replace more expensive recruitment channels such as newspaper advertising,
employment agencies, and job fairs and so on.
Employee-referral programs are especially effective in the case of highly specialized positions that might be difficult to fill through conventional channels. People tend to associate with others in their professions, which gives them access to specialized or rare talent.
The referral programs are made tempting by the employers so that employees are motivated enough to refer their known ones to their organization. The TCS, are giving up huge rewards to the employees who bring in candidates, specially for hard-tofill positions, and award them when the candidate is inducted.
Precautionary measures take care by the employee when referring candidates. Practical ways to pump up employees so they introduce you to highly-quality job candidates who may potentially fill specific organizational slots.
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1. Employees don't see recruitment as a high priority. Their own daily business priorities capture their attention. Thus, human resource departments need to create devices to encourage participation.
2. Employees have difficulty matching job requirements against the talents of their friends and associates. For instance, an employee may know her friend works in data processing, but she doesn't know if he qualifies for the posted position "MIS Network Specialist IV." This difficulty in matching talents to vacancies prevents referrals. To overcome this obstacle, employees need to know who can give them information about a position's requirements.
3. Employees make faulty assumptions about the interest level of friends and associates. Referrals normally don't come unless a friend explicitly states interest in seeking a new job. However, many will explore a "better opportunity," even if not actively looking for one. Therefore, employees need to get the message: "Refer good people; it is not necessary to judge if they are keenly interested right now."
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4. Recommenders may confuse friendship with job competence. Factors such as bias, nepotism and eagerness to see their friends I the company may come in the way of hiring a suitable candidate.
STEPS OF DESIGNING SUCCESS EMPLOYEE REFERRAL
Clearly define the rules: Make certain the program rules are clearly defined. It may sound like simple advice, but ATS overlooked this detail in the early stages of our program. We requested resumes for potential new hires without clearly describing the skills needed. As a result, we had a deluge of all types of resumes. ATS now posts job descriptions with each opening.
Build a budget: A successful program doesn‘t have to be highcost. Calculate current recruiting costs and evaluate areas from which you can reallocate funds to the employee referral program. Second, identify the reward—make the bonus fit the organization and adapt the rewards to the corporate culture.
Keep employees interested: Prompt payment (within 30 to 90 days of hire date) for successful referrals is one of the most critical contributors to program success. Also, keep the program fresh—
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adopt a new theme every year that reflects the company culture. Use company events such as a forum to present major prizes and awards and use smaller giveaways to publicize the program.
Your workforce is the key: A successful referral program can turn your entire workforce into a recruiting team, providing an advantage in a highly competitive job market. It also rewards current employees who contribute to the success of your organization.
The steps should be, while preparing the employee referral program:
1. Policy should be meant for a particular category of employees. This will help in maintaining the professionalism in the company. 2. Employees must be made aware of the parameters expected by the company from new recruit. 3. Monetary benefits can be shared with the employee whose recommendations helped organization to finalize management in selecting the candidate. 4. These monetary benefits can be shared in number of stages e.g 15% of cost of hiring may be paid to concerned employee on joining of new employee. Another 25 % after completion of one month of service by new joined and balance after the completion of three
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months of service or after confirmation of employee in to services of company. 5. The reasons behind the above is that the recommending employee will help the new joined in apprising the culture of organization thus reducing the settle down time. 6. Back ground of the new selection can be verified from the present employee. 7. The recommended employee should have minimum two years of service in the organization. 8. Employees who have been issued warning letter or charge sheeted in the past should be barred from entering the scheme. 9. Not more than two recommendations should be accepted through one employee during a year. This number may depend upon requirement and present strength of organization. 10. Negative impacts like unionism may enter into the organization. Unity among the known are more as compared to independent. Psychometric impacts on known cases are more effective and may result in frustration and demoralization.
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HR
smart’s Employee
Referral
System complements
the Applicant Tracking System (ATS) and features:
Candidate submission directly into a ATS. When employees submit their contacts for a position, the information is reflected on the recruiter desktop, so review and next steps are simple.
Variable rewards based on position. Recruiters can send selected jobs to the employee referral system and scale rewards based on the level, location or other select criteria of the position, so higher rewards are granted for talent that is difficult to recruit. Rewards can also be designated for each step the candidate passes through, such as a small reward for the interview and a larger award for getting hired.
Status
tracking
of
submitted
candidates
and
rewards. Employees can submit candidates and track them through the interview process. When a candidate becomes a new hire, the employee can find out when they will receive their reward through the solution—saving the recruiting staff valuable time on follow up. Managed inventory in the system. The solution acts as a database for a rewards, so an inventory can be easily reviewed and maintained, whether it is gift cards, merchandise, travel and
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incentives or cash. In addition, HR smart Employee Referral System, recruiters can track who received a reward and when it was dispersed.
Employee-referral programs are not new. They have been used for decades to fill about 30 percent of job openings, with varying degrees of success.
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Chapter 5 Conclusion
Employee referral refers to the recruitment in the organization of an individual by taking the reference of other employee. It is one recruitment strategy.
They have concept known as bring your buddy. It means to invite a friend for the job.
The employee referral system is the preferred source of recruitment for many IT organizations. Thoughtfully implemented employee referral plans are excellent ways to attract the best people at the lowest cost.
Employee referral programs are an outstanding way to attract potential hires to join your company at the least possible costs. In fact, it‘s the most cost-effective way to deal with recruitment procedures in a company. The basic principle of friends helping friends get in the company just makes this an absolute choice to recruit people.
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Employee referral programs increase your company's stable and boost your earnings undeniably, a tight labor market affects companies looking to expand their talent pool.
The purpose of this strategy is to encourage employees to reserve their scarce referral opportunities for the highest-qualified candidates that they know. On the downside, such a policy can reduce the number of employee referrals per year.
Some competing businesses may retaliate against your company for stealing their happily employed workers via employee-referral programs.
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