12 April 2022 11:50:55 IST

Dony Kuriakose is founder-Director of EDGE Executive Search Pvt Ltd., a career search firm with a trans-India presence. The company focuses on the middle to top management career moves, mainly in technology, telecom, consulting and manufacturing. Its motto is “If you’re looking for a change, change the way you’re looking,” and they deliver this through a learning-driven approach that seeks to add value to career changes. In his spare time, Dony is a keen photographer and avid reader. A former marathoner and committed dog lover, he has recently been adopted by a cat.

The referral roulette

Julius Caesar sure knew a thing or two about hiring. Way back in the 1 st century BC, Caesar offered 300 sestertii to his troops to refer a soldier to join the army. The world’s first employee referral system, offering almost a third of the annual salary for each referral!

From talent for war to war for talent 2,000 years later, it seems the more things change, the more they remain the same. Ask any seasoned hiring chief today and she will point to employee referrals as a key weapon in her armoury as she scours the corporate jungle for talent.

The benefits are obvious and well documented. Multiple surveys and studies have held out advantages from cost to quality and speed to retention, besides the most valuable benefit of access to passive talent through a known source.

Yes everybody has one but it’s often a song sung blue. Many an HR manager does confess in a candid moment that their employee referral scheme has a bit of an underwhelming impact and has become a show pony.

So much so that when it comes to key roles, since their process mandates referrals and Internal Job Postings (IJPs) as the first source with a one or two week exclusive window, it is customary for talent acquisition to share new roles with consultants “unofficially” and ask them to start sourcing, but send CVs only after the mandatory period ends.

Our epiphany came when we started implementing Recruitment Process Outsourcing (RPOs). When we ran hiring as an external agency, it became imperative to account for every source, especially the cost-effective ones. Every assignment, guided by the principle of maximising quality and optimising cost, invariably started with streamlining the referral process. Clearly, things weren’t always working as they should have.

For the process to work well, a referrer needs to understand the role, identify a professional acquaintance, establish a connection to ensure interest, obtain consent, and then introduce him into the company’s hiring process for that role, before stepping back and letting the process take over.

This requires a defined structure, clear boundaries, and responsible conduct. The monetary incentive is an outcome, not the objective. When this gets replaced with a gold rush, the intended objectives and therefore the outcomes fall by the wayside.

Companies that run the process well fill between 25-30 per cent of their lateral hiring through employee referrals, while motivating their people and creating a greater sense of belonging at the same time. However, that takes an involvement at the granular level by all parties.

Usual problems range from poor structuring and implementation by the company to either too little or too much involvement by the referrer and an indifferent approach by the candidate. With the commoditisation of the process, it is common to find resumes pushed in without role fitment, candidates who are unaware of the referral or even the referee and having scant knowledge of the company.

On the other end, there are candidates who have ‘insider’ knowledge of interview contents and compensation limits or feel they can influence the process. The irony is that most of these can be checked by a good RMS, but even that is bypassed in a rush for numbers and end up hobbling or even derailing the process.

Fixing this valuable resource for the best results will take a combined endeavour focussed on intention and effort from all three parties — the company, the referrer and the candidate. Here is what the key focus points for each should be:

The company

Set the structure and own the process.

Communication: Of the process, role requirements, the team, and the overall employee value proposition that the company offers, as a toolkit for the referring employee.

Clarity: Regarding contentious issues like role-specific referrals, profile duplication, no-hire companies, referring relatives, and pipelining for future openings.

Transparency: Of selection parameters, resume shortlisting by hiring managers and final outcome, including query resolution. Share details of the selection process with each referral and indicate a timeline.

Incentivisation: Go beyond the money toensure public appreciation of major contributors

The referrer

Connect the dots.

Understanding: Be clear about the role, know about the team and its leader, grasp the possible advantages of the move

Connections: Refer only people you know directly or at most are specifically suggested by people you trust. Crowd-sourcing or WhatsApp responses are a terrible idea

Influence: Contact the reference candidate and ‘sell’ the opportunity and the company. Be clear that he is motivated and interested.

Information: Give the person insights about company culture, future growth, and career opportunities beyond what is publicly available

The candidate

In it to win it.

Be engaged: It’s a relationship and an opportunity. You’re in with an advantage, so use it to understand and evaluate thoroughlyand then consent.

Be prepared: As a referred candidate, you would be expected to be more aware. Use your referrer to grasp and absorb more about the company and the work area before the interview, so that your commitment adds to your competence. Attitude + learnability often trumps static knowledge.

Be forthright: Coming with some tailwind, you are in a position where you can be frank. So state your mind and resist the urge to negotiate. It’s okay to be politely outspoken and stick to your stand. Honesty and dependability are the two most important things you owe to your referrer.

A good reference can make for a great career, but a bad experience or a mis-hire can be a cause for much angst. Thinking again about Caesar’s referrals, anyone who’s read Asterix will recall a running gag of the Roman legionary lying on his back in the forest, bashed black and blue, seeing stars and muttering “join the army, they said, you’ll see the world, they said, *@!##”... a referral hire?

(Feedback to the column can be shared at worksphere@edgeindia.com)