Employee referral websites gain steam

Techtribe, Yellojobs and Reffster score over jobsites like Naukri and Monster in quality of recruitment.

Employee referral websites are poised to be the "next big thing" in the recruitment field. With job opportunities in the country running into millions and eligible candidates lining up, these websites help screen the applications for the job through references given by other registered members of the website.

According to Ma Foi-India Today survey, recruitment fees in India stood at Rs 4,500 crore in 2006, out of which only Rs 500 crore was through e-recruitment.

Though jobsites like Naukri.com and Monster.com have been in existence for a while, they only provide a platform for recruiters and job seekers, and do not give any assurance of the quality of recruitment, according to analysts. And this is where the employee referral websites have an edge, they say.

With a focus on mid- and senior-level jobs, these websites are gaining popularity among the human resources (HR) departments across companies.

Ravi Shankar, global head (talent transformation group), HCL Technologies, advocates the trend. "I encourage my HR team to use this form of recruitment. We use a mixture of headhunting from jobsites and referrals to cater to our requirements," says Shankar.

HCL, currently, conducts almost 5-7 per cent of its hiring through this form of recruitment, though Shankar expects this percentage to rise considerably in the near future.

Vikramjit Sahai, managing director of the employee referral website Yellojobs, agrees. He says, "This form of hiring will become huge in the days to come."

"At present, almost 25 per cent of the recruitment in companies is done through internal referrals, 50 per cent of the hiring is done through recruitment consultants, while 15 per cent is done through direct advertisements and the rest is through means like employee referral websites," Sahai adds.

Though this segment is at a nascent stage with only a handful of players in the market, the number is expected to increase over the next year or two, say existing players.

Rohit Agarwal, CEO, Techtribe, says, "This space will take another year to reach maturity, a lot of companies will enter this market, but their success will depend on the kind of scale they can achieve."

"At present, about 5-10 per cent of the recruitment in companies is done through websites like ours. Even jobsites might expand into this area in the near future, however, at this point of time, they are probably waiting to see the response that this model gets," adds Agarwal.

Reffster, a recent entrant into this space, is trying to find its feet in the industry. According to Ranjit Jatar, co-founder and CEO, Reffster.com, this system of recruitment is yet to gain trust of the recruiters.

He says, "Internal referral models, where employees refer their peers for a post, have worked very well because of the relationship of the employee with the company, whereas employee referral websites are yet to gain that kind of trust."

Shankar of HCL Technologies explains that though 20-25 per cent recruitment in the company is done through reference from employees, references through such websites is more credible, as you can trace the links of prospective employees.

Shankar adds, "This form of recruitment is gaining steam in the country. My rate of hiring is about four out of 100 from conventional sources, but from these websites the rate of hiring is as high as one out of 10."

And why would you spend time on referring a friend on such websites? Well, if your friend gets hired your pocket will be heavier, given the reward schemes offered by these websites.

Techtribe offers Rs 10,000 to the referrer through the referral recruiting service frontFoot. Yellojobs.com also enables the recruiting company to post a reward against the job. The website has, however, set a minimum limit of Rs 5,000. Reffster also has a similar "refer and be rewarded" concept.