49% of India Inc believes referral programmes breed mediocrity, says TeamLease study

BENGALURU: According to the ‘Referral Programs Breeding Mediocrity Report’ by TeamLease Services, more than 49% corporates feel that referral programs hinder innovative thinking within the organisation. They attribute the passive attitude of the hires to the inherent survival instincts and a tendency to lean towards a safe harbour.

According to the study, though referrals constitute only 5% of the overall hiring, it leaves a far stronger impact on the functioning of the organisation. Around 44% of the employers surveyed believe referral programs proliferate a herd mentality and a sense of complacency. The report observes that those onboarded through referral are not always open to connecting with other members of the organisation, which causes an unhealthy work atmosphere.

According to the study, a majority (52%) of referrals were mere fervent solicitations motivated by monetary rewards.

“Referral programmes may have 50% better retention, however with the inherent limiting factors like scale, informality and survival instincts, it is high time organisations re-look at the methods to acquire quality talent," said Kunal Sen, senior vice president, TeamLease Services

The survey also suggests best practices that organizations can adopt. Employer brand recognition, controlled communication, expectation management and goal setting are few measures corporates can put in place to increase the effectiveness of referral programmes.

The report is a first in the TeamLease survey series to understand India’s evolving world of work, and was administered on HR managers across sectors. The current survey series aims to understand the pulse of the young Indian workforce to the different aspects that govern the working environment.