Low hiring budgets pushing recruiters towards employee referrals for quality hires


While hiring volume has remained stagnant, the budget for recruiting solutions has dropped, leading talent acquisition officers to rely on employee referrals and employee retention.

With growing business optimism in India, business leaders are looking for quality talent to deliver rapid and sustainable growth. However, in the past year, the gap between hiring volume and budget has significantly widened. While the hiring volume has remained stagnant, the budget for recruiting solutions has dropped. This means that talent leaders have to do more with less.

In such a scenario, talent acquisition officers are relying on two routes — employee referrals and employee retention. This was revealed by LinkedIn India Recruiting Trends 2016.

When respondents from Indian companies were asked to name the most important source for quality hires made in the past 12 months, 55 per cent of them said it was through employee referrals. Around 43 per cent said Internet job boards were also important, while 42 per cent voted for social professional networks.

What is interesting is that India Inc. surpasses its global counterparts in terms of frequent usage of referral programmes for hiring. Around 65 per cent of Indian organisations use employee referrals as against the global average of 39 per cent. It is believed that Indian companies enjoy a strong relationship with employees. This helps them identify and source quality talent through their networks.

Around 41 per cent of Indian organisations believed that employee referrals were an essential and will be a long-lasting trend.

With decreasing budgets for hiring, employee retention is another aspect that is increasingly becoming important for organisations.

36 per cent of the talent leaders stated that employee retention will be a top priority over the next 12 months. However, internal hiring, which helps address employee retention, is still to become a practice. Only one quarter of the respondents were regularly recruiting internally while another 45 per cent did it off and on. More than a quarter of the respondents never even tried it while another 2 per cent were not even aware of internal hiring.

Since internal hiring is not a top priority for organisations, there is no standard approach either. While the majority of companies have a well-defined programme for career advancement, a large number of internal hiring occurs on a case-by-case basis. 13 per cent even say that internal hiring isn’t run by talent acquisition.

However, there is an urgent need for talent leaders to formalise the internal recruiting process, but recruiters should also maintain relationships with candidates post-hire and keep them in their long-term pipeline.

Employer branding has also gained priority among talent acquisition heads, and around 78 per cent of the respondents agreed that it has had a significant impact on their ability to hire great talent.

What’s interesting is that organisations are creating a unified strategy for this. This implies that HR is now marketing to enhance employer branding. Around 43 per cent of the respondents agreed that they share or contribute to employer branding with marketing.

LinkedIn interviewed 3,894 talent acquisition decision makers who work in a corporate HR department and have some authority in their company’s recruitment solutions budget. These individuals focus exclusively on recruiting, manage a recruiting team, or are HR generalists. These survey respondents are LinkedIn members who opted to participate in research studies. They were selected based on their LinkedIn profile information, and contacted via e-mail.


  1. Yes.Employee referrals are on the increase.
    However,there is no attrition data to support the efficay of employee referral.
    If the referral, program is productive and is an indication of employee engagement with the organisation,why are they not as good employers ?

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