Employee Referral Program at Mahindra Satyam

Introduction1.1 About the Company – Mahindra Satyam

Mahindra Satyam is leading global information, communications and technology (ICT)

company and a part of the US $15.4 billion Mahindra Group, a global industrial

federation of companies and one of the top 10 business houses based in India.

Mahindra Satyam is powered by a pool of talented IT and consulting professionals across

enterprise solutions, client relationship management, business intelligence, business

process quality, operations management, engineering solutions, digital convergence,

product lifecycle management, and infrastructure management services, among other

capabilities.

Its development and delivery centers in the US, Canada, Brazil, the UK, Hungary, Egypt,

UAE, India, China, Malaysia, Singapore and Australia serve numerous clients, including

several Fortune 500 companies.

Company’s Vision - To be the world’s most valued ICT Company

Company’s Values

Customer First: We respond to customers speedily, courteously and effectively

Good Corporate Citizenship: We seek long-term success for all stakeholders

without compromising on ethics or transparency

Individual Dignity: We value the individual, uphold the right to express

disagreement, and respect the time and efforts of others. Nurture fairness, trust

and respect

Professionalism: We impart freedom and the opportunity to excel and to grow;

support innovation and well-reasoned risk taking, demanding performance

Amity Global Business School, Hyderabad 1 | P a g e

Quality focus: We make quality a value driver in our work, our products and our

interactions. We believe in the 'First Time Right' approach in delivery

Mahindra Satyam - Executive Management Team

Chairman – Vineet Nayyar

CEO – C.P.Gurnani

CTO – A S Murthy

President – Atul Kunwar

CFO – Vasant Krishnan

Sr. Vice President – Vijayanand Vadrevu

CMO & CPO – Hari Thalapalli

COO – Rakesh Soni


Some of their Alliances –


Mahindra Satyam enables companies to employ Information Technology to realize their

business strategies, explore new opportunities, grow competencies and forge closer ties

with their customers. Working closely with the customers as partners, they deliver and

implement innovative software solutions across a number of technology platforms. Some

of the innovative IT and consulting services provided by Satyam that transform the

businesses and make a difference include:

BI and PM

Business Value enhancement

B2B/EDI

Context, Process, UX Management

Cloud Computing

Digital Convergence

Enterprise architecture and Enterprise Mobility

Green and sustainability solutions

Infrastructure and management services

Integrated Engineering solutions

Microsoft solutions

Operations Management

Oracle Solutions

Product and application testing

Product lifecycle management

Platform Solutions

SAP solutions

Spend management solutions

Leveraging deep expertise across key industries, Mahindra Satyam serves 370+

customers in 39 countries across six continents. Some of its customers include four of the

top 10 in Electronics and Electrical Equipment, two of the world’s largest Beverage


companies, three of the top 10 in Aerospace & Defense, two of the top five in Chemicals.

Among other industries it serves we have Automotive industry, Banking and financial

services, Energy utilities, healthcare and life sciences, Insurance, Media and

Entertainment, Retail and CPG, Travel, logistics and infrastructure, Public services,

Semiconductor, Technology, Telecom and others.

Alliances:

The depth and breadth of the solution offerings is enabled by strategic alliances with

technology vendors and system integrators who have been their partners to deliver

industry-best end-to-end solutions to the customers.

While the alliance partner provides the software application, Satyam offers professional

services including business process consulting, systems integration, custom application

development, content development and other consulting and implementation expertise.

Some major alliances include:

HP

Microsoft

Oracle

IBM

Pegasystems Inc.

SAP

Siemens

Carnegie Mellon

ISB

iRise

Computer Associates International, Inc.

MERGER OF TECH MAHINDRA AND MAHINDRA SATYAM

On March 21st, 2012, The Boards of Directors of Tech Mahindra Limited (“Tech

Mahindra”) and Satyam Computer Services Limited, (“Mahindra Satyam”), in their

respective meetings, approved a proposal to merge Mahindra Satyam with Tech

Mahindra along with certain wholly owned subsidiaries of Mahindra Satyam and Tech


Mahindra. On a pro-forma basis, the Mahindra Group will own 26.3% in the combined

entity, British Telecom will own 12.8%, 10.4% will be held as treasury stock, 34.4% to

be held by the public shareholders of Mahindra Satyam and the balance 16.1% will be

held by the public shareholders of Tech Mahindra. The merger will result in the creation

of a new offshore services leader with revenues of approximately US$2.4bn in revenues,

approximately 75,000+strong work force and 350+ active clients (including Fortune

Global 500 companies), across 54 countries. The joint entity will have a unified “go-to-

market” strategy with deep competencies and a balanced mix of revenues from Telecom,

Manufacturing, Technology, Media & Entertainment, Banking, Financial Services and

Insurance, Retail and Healthcare. Revenues will be well balanced with a diversified

global footprint that would boast of contribution from Americas at 42%, Europe at 35%

and Emerging Markets at 23%. The combined entity will leverage Tech Mahindra’s

expertise in Mobility, System Integration, and delivery of large transformations and to

better penetrate the opportunity presented by Mahindra Satyam’s diverse set of clients

across multiple verticals. Likewise Mahindra Satyam’s expertise in Enterprise Solutions

will enable a more complete value proposition to be delivered to Tech Mahindra’s clients.

The combination will benefit from operational synergies, economies of scale, sourcing

benefits and standardization of business processes.

1.2 About the Project

The project scope is confined to the Employee Referral program at Mahindra Satyam also

known as B-Channel program (Short for B channel). It deals with the understanding of

the complete procedure and policy guidelines of the B channel program. It also evaluates

the various promotional schemes implemented by the B channel program from time to

time to improve the number of referrals. Later on, the Mahindra Satyam’s B channel

program is compared with the employee referral programs of other IT firms Accenture

and IBM in order to assess what is missing and make suitable recommendations to

improve the process.


Mahindra Satyam’s B-Channel Details:

Eligibility –

1. All associates of Mahindra Satyam can refer a candidate for recruitment.

2. Referral payment will be made towards the eligible associates for vacancies

between Band S and Band I (Excluding vacancies on contract, Ia or in the

capacity of a trainee).

3. All fulltime associates (including associates of direct contract basis) at Band I2

and lower are eligible for receiving payments for referred candidates.

Exclusions –

An associate may refer as many applicants as desired. However, the associate will not be

eligible for a referral amount in the following circumstances:

1. Referring associate or referred associate is a sub contract employee.

2. HR, for HR will not be eligible under provisions mentioned herein the policy.

3. Referred candidate has been employed with Mahindra Satyam anytime during the

previous 12 Months.

4. If the associate has referred a member of his immediate family. (For the purposes

of this policy, Mahindra Satyam defines” immediate family” as spouse and

children)

5. If the resume forwarded has already been received by the organization from

another source within the last 6 months

6. The referred candidate is found to be a BG Red as per the Background Check

policy


7. An associate referring a candidate should not be on the selection panel for the

position for which the referred candidate is being considered for, at any stage.

Referral Amount –

Associate Referral fee for candidates referred for positions in India ----

Minimum – Rs. 15,000

Maximum – Rs. 50,000

In addition to this, additional rewards are given after achieving different levels in referral

fees and joining.

While referral fee and bonus is payable at end of 3 months, subject to both the referring

associate and the referred being in the system, Add-on rewards will be will be given 30

days after all referred candidates have joined.

Associate Referral fee for candidates referred for positions in the USA ----

Minimum – USD 750+eMall points

Maximum – USD 1500

Associate Referral fee for candidates referred for positions in Europe ----

Minimum – USD 750+eMall points


Associate Referral fee for candidates referred for positions in Australia & New Zealand –

Minimum – USD 500



Associate Referral fee for candidates referred for positions in Canada, Singapore and

other countries ----

Minimum – USD 250

Maximum – USD 750

Associate Referral Fee for bi – lingual candidates in Japan ----

Minimum – USD 1000


Approval Authority – Head B-Channel

Payment Process –

1. The associate and the referred candidate should be employed with the

organization on the date that the referral fee has become due.

2. In the instance where the referring associate is serving the notice period with the

company, he/she will be eligible for the referral fee as part of the final settlement

as long as the above condition is met.

3. An associate referring a candidate will be paid as per the policy of the country

that the candidate has been selected for in the currency of the country that the

referring associate resides.

4. All referral fees are subject to applicable tax deductions.


5. The referral fee is payable after the referred associate completes 3 months in the

organization. The payment will be included in the first payroll that is triggered

immediately following the referred associate’s completion of 3 months.

6. For the purposes of payment of referral fee, inter-unit and intra-unit movements

will have no impact.

7. The validity of a referral profile is 6 months. A profile will automatically be

‘delinked’ if on the completion of 6 months no action is taken on the same.

Referral fee is not payable against delinked profiles. A ‘delinked’ profile can be

‘re-linked’ by sending a mail request for the same to the referral supervisor at

[email protected]

Referral fees – Promotional schemes and Events

The referral fee payable to Associates can be varied from the referral amounts as

mentioned above in case of a special scheme / recruitment event being carried out as part

of the B-Channel Promotion Campaign. The variation in the referral fee for schemes

maybe in cash or kind depending on the campaign requirements – the same will be

decided upon at the discretion of the Head - B-Channel.

Procedure

1. Associate - The Associate uploads the referral C.V. in E-Support and generates a Referral

/ Applicant ID.

2. B-Channel - The B-Channel on receipt of the resumes initiates the recruitment process

provided the resumes match the Job description. As per the policy, the referral fee will be

advised depending on the eligibility on a monthly basis.

3. SSCL Payroll – Initiates payment to the associates based on the referral advice provided.


mailto:[email protected]

Treatment of special cases –

1. Conflict in source of a profile:

In cases of a conflict in the origin source [vendors, direct applicant, job sites etc]

of a profile, the benefit of the conflict will be given to the Associate if he is able

to support his claim with relevant mail proofs.

The decision regarding a conflict in source of a profile will lie with the Head - B-

Channel and will vary from case to case depending on the merits of the same.

2. In case of conflict among Associates regarding source of the referral:

Referral fee is payable to the Associate against whose Referral ID the offer to the

candidate has been released. In case of further conflict on the issue, benefit of

doubt will be given to the Associate who is able to provide mail proofs against the

referral.

The decision regarding a conflict among Associates will lie with the Head - B-

Channel and will vary from case to case depending on the merits of the same.

In case of any further conflict in any of the above cases, the final decision will lie with

the Head – Sourcing.


1.3 Problem formulation

The above mentioned procedure and policies are followed by Mahindra Satyam to

implement its Employee Referral program. The operational part of the employee referral

works in the following way:

The B Channel team receives the profile of a referral through E-support,

Mahindra Satyam’s Online Portal.

This profile and the basic details are verified through a phone call and after the

verification; the profile is forwarded to the respective recruiters based on the

primary skill of the referral.

The recruiter would then shortlist the profile based on the current requirement.

The B channel team is continuously in touch with the recruiters to find out the

status of the referrals.

The B channel team gives timely feedback to the referees about their referrals

whether they are shortlisted, rejected, not reachable, selected etc.

Once a referral is offered the job and joins the organization, the B channel team

approves the referral payment to the referee if all the eligibility terms are fulfilled.

Apart from this, the B channel program also implements promotional schemes and events

giving away non monetary benefits to the associates. In an endeavor to encourage the

employees to refer more candidates, the B channel program has come up with a new

initiative in the fourth quarter of the financial year 2011-12. A campaign was launched

that gave an opportunity for the employees to win attractive rewards. This was an

additional incentive given to the employees apart from the monetary benefits they acquire

through referrals. A varied range of awards that included Mp3 players, SLR cameras,

Holiday trips, gift vouchers and other exciting prizes were given away as a part of this

campaign. Titles like “Buddy of the month” were also given every month for people

referring high quality candidates. One of the special features of this campaign included

motivating its employees to refer more lady candidates as a special award was announced

for “Highest Lady Referrals.” The campaign also saw another novel idea called the

“Newest Joinee Referring” which rewarded the newest joinee in Mahindra Satyam who


can successfully refer a buddy. This award was won by one of the new hires who joined

Mahindra Satyam on 10-Jan-2012 for referring his buddy who also got into the

organization in the same quarter.

These kind of promotional schemes have been in implementation on a regular basis. The

success of these schemes in motivating the employees to refer more people needs to be

evaluated. If these schemes are really serving the purpose to improve more referrals,

more such promotional events can be implemented. In order to evaluate the scheme’s

success, a comparative analysis was done between the referral data of the third quarter

where no scheme was implemented and the fourth quarter where the scheme was

implemented of the financial year 2011-12. The comparison was based on the following

parameters: Inflow of profiles, Jobs offered, Payments made and the Satisfaction of the

employees. These parameters were analyzed in order to evaluate the success of the

scheme. After the evaluation, suitable recommendations were made about further

implementation of such schemes.

Later, the referral programs of two IT giants Accenture and IBM were studied in detail

and compared to the B channel program of Mahindra Satyam. Based on this comparative

analysis and the secondary research done for the project, suitable recommendations were

given to improve the number and quality of the referrals.


1.4 Scope of the Project

The scope of the project is limited to making suitable recommendations to improve the

number of referrals and quality of referrals through B Channel. For this purpose, an

extensive study of Recruitment, Various sources of recruitment and employee referrals

was carried out.

A deep understanding of the B Channel program was acquired and some comparative

analysis was done internally and externally to the program. Internally, the referrals

between two quarters were analyzed and externally, the program was compared with

other referral programs in the industry.

The scope of the project includes the referral programs implemented by an organization

but it is more specific to the IT industry. The primary research data included

effectiveness of B-Channel and its reach to each and every associate. This project is

limited to Mahindra Satyam’s referral data. The secondary research data was included in

the form of understanding the concept of recruitments, sources of recruitment and

Employee referral programs all over the world.


2 Secondary Research

2.1 Recruitment

The main objective of recruitment process is to obtain the number and quality of

employees that can be selected in order to help the organization to achieve its goals and

objectives. With the same objective, recruitment helps in creating a pool of prospective

employees for the organization so that the management can select the right candidate for

the right job from this pool. Recruitment acts as a link between the employers and the job

seekers and ensures the placement of right candidate at the right place at the right time.

1. Identify the vacancy.

2. Prepare job description and person

specification.

3. Advertising the vacancy.

4. Managing the response.

5. Short-listing.

6. Arrange Interviews.

7. Conducting Interview and

Decision Making.

Recruitment is the development and maintenance of adequate manpower sources. It

involves the creation of a pool of available human resources from which the organization

can draw when it needs additional employees. Recruiting is the process of attracting

applicants with certain skills, abilities, and other personal characteristics to job

vacancies in an organization. According to Denerley and Plumblay (1969), recruitment

is concerned with both engaging the required number of people, and measuring their

quality. It is not only a matter of satisfying a company’s needs, it is also an activity which

influences the shape of the company’s future. The need for recruitment may arise out of:


(i) vacancies due to promotion, transfer, termination, retirement, permanent disability,

or death; (ii) creation of vacancies due to business expansion, diversification, growth,

and so on.

2.1.1 Recruitment function

The function of recruitment is to locate the sources of manpower to meet job

requirements and specification. Recruitment forms the first stage in the process which

continues with selection and ceases with the placement of the candidate. Effective supply

of varied categories of candidates for filling the jobs will depend upon several factors

such as the state of labor market, reputation of the enterprise and allied factors. The

internal factors include wage and salary policies, the age composition of existing

working force, promotion and retirement policies, turnover rates and the kind of

personnel required. External determinants of recruitment are cultural, economic and legal

factors. Recruitment has been regarded as the most important function of personnel

administration. Unless the right type of people is hired, even the best plans, organization

charts and control systems will be of no avail. A company cannot prosper, grow, or even

survive without adequate human resources. Need for trained manpower in recent years

has created a pressure on some organizations to establish an efficient recruitment

function.

2.1.2 Recruitment Purpose

The general purpose of recruitment is to provide a pool of potentially qualified candidates

to meet organizational need. Its specific purposes are to:

Determine the present and future requirements of the organization in

conjunction with the personnel planning and job analysis activities.

Increase the pool of job candidates with minimum cost.

Help increase the success rate of the selection process by reducing the number of

under qualified or overqualified job applicants.


Help reduce the probability that job applicants, once recruited and selected, will

leave the organization only after a short period of time.

Meet the organization’s legal and social obligations regarding the composition of

its workforce.

Start identifying and preparing potential job applicants who will be appropriate

candidates.

Increase organizational and individual effectiveness in the short and long term.

Evaluate the effectiveness of various recruiting techniques and sources for all

types of job applicants.

2.1.3 Recruitment Policy

Recruitment policy may involve a commitment to broad principles such as filling

vacancies with the best qualified individuals. It may embrace several issues such as

extent of promotion from within, attitudes of enterprise in recruiting its old

employees, handicaps, minority groups, women employees, part-time employees,

friends and relatives of present employees. It may also involve the organization system

to be developed for implementing recruitment programme and procedures. A well

considered and pre-planned recruitment policy, based on corporate goals, study of

environment and the corporate needs, may avoid hasty or ill-considered decisions and

may go a long way to man the organization with the right type of personnel. A good

recruitment policy must contain the following elements:

Organization’s objectives - both short term and long term.

Identification of the recruitment needs.

Preferred sources of recruitment.

Criteria of selection and preferences.

The cost of recruitment and financial implications of the same.

A recruitment policy in its broadest sense involves a commitment by the employer to

Recruitment to

(i) Find the best qualified persons for each job;


(ii) Retain the best and most promising of those hired;

(iii) Offer promising opportunities for life-time working careers;

(iv) Provide programmes and facilities for personal growth on the job.

2.1.4 Recruitment Process

To be successful, the recruitment process must follow a number of steps. These are:

1. Defining the job

2. Establishing the person profile

3. Making the vacancy known

4. Receiving and documenting applications

5. Designing and using the application form

6. Selecting

7. Notification and final checks

8. Induction.

2.1.5 Sources of Manpower supply

Once the job analysis is completed and the job specification or behavioural competencies

are identified, the next stage is to consider how to attract people who meet the

requirements. A key decision is about whether to recruit internally or externally. Before

an organization actively begins recruiting applicants, it should have knowledge of the

sources of supply and methods of tapping them. The sources of supply do not remain

constant but vary from time to time. The sources of supply of manpower can be divided

into two groups — internal and external sources. Internal sources relate to the existing

working force of an enterprise while external sources relate to the employment

exchanges, colleges, institutes, and universities. The particular sources and means by


which workers are recruited vary greatly. It depends upon management policy, the types

of jobs involved, the supply of labor relative to demand, and labor market. In deciding

which recruitment source to use, consider (a) the nature and size of the company; (b) the

level of vacancies to be filled up; (c) the number of vacancies to be filled up; (d)

budget allocation; and (e) the time period to fill the vacancy.

Sources of Recruitment –

INTERNAL EXTERNAL

Transfers Press Advertisements

Promotions Educational Institutes

Upgrading Placement Agencies

Demotions Employment Exchanges

Retired Employees Labor Contractors

Retrenched Employees Unsolicited Applicants

Dependents and relatives of deceased

employees

Employee Referrals/

Recommendations

Recruitment at factory gate

Internal Sources:

Internal sources are the most obvious sources. These include personnel already on the

pay-roll of an organization, i.e., its present working force. Whenever any vacancy occurs,

somebody from within the organization is upgraded, transferred, promoted or sometimes

demoted. Internal recruitment seeks applicants for position from among those who are

currently employed.

The use of internal search, on the whole, has some merits:


1. It improves the morale of employees.

2. The employer is in a better position to evaluate those presently employed than

outside candidates.

3. It promotes loyalty among the employees, for it gives them a sense of job security

and opportunities for advancement.

4. It is less expensive and job openings can be filled more quickly.

5. Internal candidates are more familiar with organizational policies and practices, and

thus require less orientation and training.

However, this system suffers from certain defects as well.

1. It often leads to inbreeding, and discourages new blood from entering an

organization.

2. There are possibilities that internal sources may “dry up”, and it may be difficult to

find the requisite personnel from within an organization.

3. As promotion is based on seniority, the danger is that really capable hands may not

be chosen.

Internal recruitment can lead to problems, however, when a position becomes vacant,

many employees may be considered for that slot. The likes and dislikes of the

management may also play an important role in the selection of personnel. Usually,

internal sources can be used effectively if the number of vacancies is not very large,

adequate employee records are maintained, and employees have prepared themselves for

promotions. Because internal methods are often not sufficient to supply a suitable pool of

applicants, most organizations make use of external sources to attract potential recruits.

External recruitment brings in individuals from outside.

External Sources:

Among the external sources are included the employment agencies, educational and

technical institutes, casual labor, trade unions, application files and other sources.


External sources provide the requisite type of personnel for an organization, having skill,

training and education up to the required standard. Since persons are recruited from a

large market, the best selection can be made without any distinction of caste, sex or

creed. However, this system suffers from what is called the “brain drain”. The

advantages of internal recruitment are basically the disadvantages of external recruitment.

Labor market considerations are very important in external search. A labor market is a

geographic area within which workers seek employment and employers recruit workers.

It is the place where the forces of supply and demand interact. A labor market tends to be

unstructured for the most part; it is unorganized. The procedures by which a company

recruits workers and the methods by which workers go about obtaining jobs are highly

variable. Lack of labor mobility is still another characteristic of a labor market. One

important reason for lack of mobility is that the average working man possesses quite

incomplete and inaccurate knowledge of job opportunities in his labor market. Wage rate

data are not generally made public. A labor market is characterised by a great diversity of

wage rates for the same occupations. This variation in wages for the same kind of work is

caused by many factors. Principal ones are differences among the employers in their

ability to pay productivity, and management attitude towards wage rates. Certain non-

wage factors, Recruitment such as greater job security, may still attract and hold the

employees. An organization must decide whether to recruit employees internally or

externally. External recruitment is limited primarily to entry-level jobs. Jobs above the

entry level are usually filled with current employees through promotions. Promotional

opportunities lead to reduced turnover, increased job satisfaction, and better job

performance.

2.1.6 Methods and Techniques of Recruitment

While recruitment sources indicate when human resources may be procured, the

recruitment methods and techniques deal with how these sources should be tapped. Dunn

and Stephens follow a three-tier classification of recruitment method - direct, indirect and

third party.

Direct Methods:


The most frequently used direct method is at schools, colleges, management institutes

and university departments. Usually, this type of recruiting is performed in co-operation

with placement bureaus of educational institutions providing assistance in attracting

students, arranging interviews, and making available space and students’ resumes. The

organizations have definite advantages through campus recruitment. First, the cost is low;

second, they can arrange interviews at short notice; third, they can meet the teaching

faculty; fourth, it gives them an opportunity to ‘‘sell” the organization to a large student

community seeking campus recruitment. In addition to managerial and supervisory

positions, several organizations use travelling recruiters to recruit skilled and semi-

skilled employees from vocational schools and industrial training institutes.

Sometimes, even unskilled workers are also attracted by this method. Other direct

methods include sending recruiters to establish exhibits at job fairs, using mobile camps

to visit shopping centers in rural areas and places where unemployed may be contacted.

Indirect Methods:

The most frequently used indirect method or technique of recruitment is advertisement

in publications such as newspapers, magazines and trade journals as well as technical

and professional journals. The choice of media, place and timing of the advertisements

and appeals to the reader, all determine the efficacy of advertisements. A useful

advertisement has to give a brief summary of the job; a summary of the organization

covering product/service, size, type of industry, profitability, expansion programs; and

an offer of compensation package. A good advertisement has to be specific, clear-cut,

reader-friendly and appealing. Ambiguously worded and broad based advertisements

may generate a lot of irrelevant applications which would, by necessity, increase the

cost of processing them. In preparing an advertisement, therefore, lot of care has to be

taken to ensure that self-selection takes place among applicants. In other words, people

meeting specific requirements should think of responding to advertisement. A carefully

worded sound advertisement can help in building the image of the organization. The

advertisements should indicate information about the organization and the job

providing opportunity to the potential candidates to contact the recruitment office in

confidence. Other indirect methods include advertising in the radio and television.


Another method of advertising frequently used is a notice-board placed at the gates of the

company.

Third-party Methods:

The most frequently used third-party methods are public and private employment

agencies. Public employment exchanges have been largely concerned with factory

workers and clerical jobs. They also provide help in recruiting professional employees.

Private agencies provide consultancy services and10 Key HR Practices charge a fee.

They are usually specialized for different categories of operatives, office workers,

salesman, supervisory and management personnel. Other third-party methods include

the use of trade unions.

Internet Recruiting:

Internet recruiting is an emerging field and therefore relatively few companies have

gathered substantive data at this point. Companies are successfully attracting a high

proportion on-line resumes, even for non-technical positions, because increasing numbers

of job seekers are turning to the internet. Job seekers are turning to the internet because it

simplifies the process of searching and applying for a position. The internet is playing a

more important role in recruitment. It advertises jobs and serves as a place to locate job

applicants. Websites can provide internet users with information on the type of work the

company is involved in and the job opportunities that are available. Interested parties can

respond by email. This has the advantage of a quick turnaround time and reduces the

amount of paperwork that would normally be associated with written job

applications. Further, the internet allows an organization to reach a larger and broader

range of applicants than traditional methods.

Internet recruiting is cheaper due to:

1. Reduced direct costs of newspaper advertisements, job fairs and head hunter fees

2. Reduced mailing costs


3. Reduced workload for the HR department.

The majority of companies involved in active internet recruiting believe that it helps

them to attract better quality applicants, given that internet users tend to be better

educated and obviously more computer literate than non-users.

2.1.7 Assessment and improving of Recruiting

The recruitment activity is supposed to attract the right people at the right time. It is

concerned with attracting those whose personalities, interests, and preferences will

most likely to be matched by the organization and who have the skills, knowledge,

and abilities to perform adequately. Many companies think that attracting and keeping

staff is mainly a monetary factor.

Rewards and benefits are the two basic factors that attract individuals to work for a

company and these come in two forms: (i) tangible (for e.g. monetary), and (ii) intangible

(for e.g. training, career paths, working environment). However, in the recruitment

process, people usually place too much emphasis on the issue of salary, forgetting

sometimes that it is more important to find the right candidate for the job and that the

process begins with using the correct hiring methods. Recruitment practices vary from

one organization to another. Some organizations resort to centralized recruitment and

some others to decentralized recruitment. Both the systems have their merits and

demerits. Hence, the management has to weigh both the merits and demerits of each

system before taking a final decision about centralizing or decentralizing the

recruitment. Apart from looking at qualifications and experience, other personality

traits like eagerness to learn and adapt, independence and creativity are just as

important. Besides having a logical and analytical mind, they have to be willing to try

and not to be afraid of failure. Normally organizations do not face difficulty in finding

adequate employees for manual, clerical, sales, and general run types of work. But they

often do have a problem in obtaining the professional and managerial talent they

require. The growing complexity and sophistication of technology has meant that


increasing numbers of professionals and managers are needed to run our modern

enterprises.

The long-run solution to the shortage of personnel in these fields is for private

organizations, government, and society in general to initiate programs that will

channel more young men and women into these fields and to give more financial

support to students and educational institutions. In the short run, the organization faced

with a shortage of qualified talent must resort to an aggressive recruiting effort

through such techniques as advertising, campus recruitment, and contacts with

management consulting firms. Manpower managers must constantly review and improve

methods of recruitment and sources of manpower supply. Any method or source which is

highly effective at present may prove to be quite ineffective later on in view of changed

situations. However, most managers fail to develop a long-range recruiting program

through careful assessment. A sound recruitment program necessitates appraisal of each

source and each technique from the standpoint of the relative qualities of the personnel it

has provided. For each major category of jobs, the present personnel can be evaluated in

terms of job success. The evaluation procedure consists of assessing the existing

employees in terms of their job success, determining the sources existing from which

“good” and “poor” employees come from and that of the method used. Manpower

managers should also attempt to improve their recruitment system. The results

assessment or problems faced during the recruitment process may themselves indicate

the need for the improvement of the program. A method to improve recruiting is to

look at the enterprise as a candidate would and taking appropriate measures to improve

its image. Further, recruitment activity should be integrated with the human resource

plans of the organization.


2.2 Employee Referral Program

Employee referral is an internal scheme employed by the organization to identify

potential and capable candidates through their employee’s social networks. This scheme

encourages the employees to come forward and involve themselves in the recruitment

process of the organization, and most importantly makes them feel that they are part of

the company. As a reward, the employee gets Referral Bonus and any other rewards

depending from company to company. Recruiting employees through Employee referral

is widely acknowledged as being the most cost effective and efficient method to recruit

new talent.

A strong referral program turns every employee a recruiter for the organization. But

running such a program takes time, manpower and a budget. At many large sized

organizations there are dedicated teams to run employee referral program.

2.2.1 Advantages and Disadvantages of ERP

Advantages

1. Cost Effective – The scheme allows the employee to refer selected candidates for

recruitment, only those who they think are suitable to the requirements. This is

because of different reasons – belongingness with the organization, risk

associated with new recruits, etc.

2. High Quality Candidates – Employee referral program provides the employer

with a source of passive candidates - those workers who are not job hunters. This


"Employee referrals are the single best way to find more top people…at least 50 percent of the people you hire should come from this group."

—Lou Adler, author of Hire with Your Head.

tends to generate a pool of high quality candidates. The quality of candidates

coming through employee referrals is high due to another reason. The employees

screen and refer only those candidates who they think are good, after all his or her

reputation is also on the line with every person he refers.

3. Specialized Positions – Employee referrals also help in filling highly specialized

positions that would be difficult to fill through conventional channels. Employees

tend to have associations with others in their profession, which gives them access

to specialized or rare talent.

4. Fit for the organization – The one-to-one direct relationship between the

candidate and the employee and the exchange of knowledge that takes place

between them allows the candidate to understand the company’s core values, its

nature of work and what is expected out of employees in the organization. So the

candidate when applies for the job does so after complete understanding of what

is expected out of him and whether he can deliver the goods or not.

5. Other Advantages – By hiring people who already get along, it’ll give a head

start in building good team chemistry. Employees would feel that they are a part

of the organization when their input is taken into consideration and their

contribution is recognized. Candidates hired through referrals tend to stay longer

than other employees –

One study found that retention rate for referrals is 25% better than other channels.

Disadvantages

1. Over Dependence – Over reliance on employee referrals can lead to under

representation of certain groups in job applicant pool. This would in turn affect

the diversity of the company work force.


2. Lawsuits – Some of the competitors would retaliate against the organization for

stealing their happily employed workers through referral programs and may file

lawsuits because for any organization Human resources are very critical.

3. Lack of Diversity – As the employee’s social network is limited and confined to

some particular group; this method would not help in creating a diversified talent

pool.

4. Diversion – Actively referring candidates increases and employee’s workload and

may be detrimental to their main responsibilities. Adding to it, the company’s

productivity would be affected.

2.3 Building and Implementing a Referral Network

The first step in building a referral network is to Build a Reputation for the company.

2.3.1 Building Reputation

The reputation of the company plays a huge factor in recruitment. Many reputed

companies do not have the need to advertise for openings. Their reputation as a great

place to work precedes them and they frequently get unsolicited resumes. In case the

organization is not getting their share of those resumes, it’s important to make it a part of

the recruitment strategy to raise awareness about the organization. One way to do this is

by approaching people through media – i.e. by being in the news for good reasons. In

case the organization is not making news through its business, their executives can

become known as experts by making themselves available to reporters looking for

experts to quote in articles about industry trends.

2.3.2 Building the Referral Network

A large number of job hunters land opportunities through networking with friends and

family. Publicizing job openings with the people who know the organization’s business


best – employees, customers and vendors, is very beneficial for the organization as it

helps in getting candidates who are more qualified and have a low turnover rate. At the

bottom line, the cost to the company is also lesser compared to other channels of

recruitment.

Reaching out to the employees - Employees are the main essence of a referral program.

The most efficient and cost effective way to recruit is through Employee referrals. As

they have a vested interest in the company, they are unlikely to refer an unfit or less

qualified person. In order to gauge the full potential of this network, the main step is to

reach out to the employees. There should be proper communication between the

employees and recruitment team. They should be well informed about the various

benefits they would get out of the referral program and also how beneficial it is for the

company, which would make them feel that they are contributing for the company’s

growth.


3 Primary Research

3.1 B-Channel (Creating Awareness)

Leading Multinational Companies, IT Giants and Most recruiting leaders would

acknowledge, at least intuitively, that hires sourced through an employee referral will

stay longer, perform better and cost less. That’s the easy part. We know it’s the right

thing to do. The difficult part is creating an environment where a strong employee-

referral strategy delivers sustainable bottom-line business results.

Our approach was a focused one: build upon an engaged workforce, leverage strong

leadership support, build awareness, educate employees, and effectively execute on the

referrals received.

3.2 Evaluation of Promotional Schemes at Mahindra Satyam

Apart from a comparative analysis with other firms, the promotional schemes at

Mahindra Satyam were also studied in depth. In an endeavor to encourage the employees

to refer more candidates, the B Channel program has come up with a new initiative in the

fourth quarter of the financial year 2011-12. A campaign was launched that gave an

opportunity for the employees to win attractive rewards. This was an additional incentive

given to the employees apart from the monetary benefits they acquire through referrals. A

varied range of awards that included Mp3 players, SLR cameras, Holiday trips, gift

vouchers and other exciting prizes were given away as a part of this campaign. Titles like

“Buddy of the month” were also given every month for people referring high quality

candidates. One of the special features of this campaign included motivating its

employees to refer more lady candidates as a special award was announced for “Highest

Lady Referrals.” The campaign also saw another novel idea called the “Newest Joinee

Referring” which rewarded the newest joinee in Mahindra Satyam who can successfully

refer a buddy. This award was won by one of our new hires who joined Mahindra Satyam

on 10-Jan-2012 for referring his buddy who also got into the organization in the same


quarter. The referral data of this quarter was compared with the referral data of the

previous quarter in order to evaluate the success of the scheme.

This study aims at comparing the performance of the quarter (Apr’12-June’12) in which

the campaign was run to the previous quarter’s (Jan’12-Mar’12) performance. The

comparison was based on the following parameters: Inflow of profiles, Jobs offered and

the Satisfaction of the employees. Based on the comparisons, we can assess how the

campaign affected the performance of B channel program.

Our objective is to compare the number of profiles that we received in both the chosen

quarters and sort them in the following manner:

Quality of profiles

Skill wise

Experience

Inflow of Profiles – Quality of Profiles

Not Reachable Rejected Offered

0

100

200

300

400

500

600

700

800

900

1000

JFMOND


From the inflow we can clearly see that the quality of the profiles has improved in the JFM quarter where the scheme was implemented. The offered profiles went up while the rejected profiles came down.

Inflow of Profiles – Skill wise

ADMS BI

Business

Analyst CES

Domain EBS IES IM

SOrac

le

OTHER

S PM

Quality

Analyst SA

P

Support

Testi

ng0

100

200

300

400

500

600

700

800

ONDJFM

In almost every skill the incoming profiles have seen an increase. Skills like ADMS, Oracle and testing have seen a major improvement.

Inflow of Profiles – Experience wise

2 to 4 4 to 6 6 to 10 >100

100

200

300

400

500

600

700

800

900

1000

ONDJFM


We can clearly see a great rise in the incoming profiles in the 2-4 years experience range as well as 6-10 years experience range.

Our objective is also to compare the number of profiles that we received in both the chosen quarters and sort them in the following manner:

Jobs Offered – Skill wise

ADMS BI CES Domain IES IMS Oracle OTHERS SAP Support Testing0

5

10

15

20

25

30

35

40

45

ONDJFM

The Last quarter saw a huge increase in the number of jobs offered in each and every skill.

Jobs Offered – Experience wise

2 to 4 4 to 6 >60

10

20

30

40

50

60

70

80

ONDJFM

Comparatively there is a phenomenal increase in the jobs offered for candidates with 6 yrs of experience and above.


Jobs Offered – Offshore/Onsite

Offshore Onsite0

10

20

30

40

50

60

ONDJFM

Hiring has been phenomenal offshore as there are very limited opportunities abroad.

Offered Vs Joined

OND JFM0

50

100

150

200

250

300

350

400

450

Offered Joined


3.3 Ad Creation & Promotion

Advertising is a form of communication used to encourage or persuade an audience to

continue or take some new action. Most commonly, the desired result is to drive

associates to referrer more and more candidates. The purpose of advertising may also be

to reassure employees or shareholders that a company is viable or successful.

In Mahindra Satyam, we usually send Ad’s to associates email ids. All ads published

through a common mail id named as Communication.

There are two commonly used Ad formats in Mahindra Satyam.

1. Opportunity Ad

2. Walk-in Ad

Opportunity Ad:

In general, we publish the Ads as and when we have an immediate requirement and this

serves the purpose of the recruiter in closing his current open requirements. Associates

can directly deal with the corresponding recruiters. When there is any requirement for

any recruiter. He directly sends the information to the B-Channel team. There is a

specific format in which each and every recruiter should share the details for the Ad

Walk-in Ad:

Walk-in Ads generally published when there are any interviews happening during any

weekend. When there is huge demand for any skill, recruiter will approach B-Channel

team to publish below Ad with few details. As this is a for a weekend drive, we need to


http://en.wikipedia.org/wiki/Persuade

http://en.wikipedia.org/wiki/Communication

know the venue for the interviews and job location too. So, every recruiter will have to

fill in couple of additional details along with the general Ad details (Like publishing Ad

for an Opportunity)

Once we have all details in place, we will prepare Ad template, contains all the details

which have been shared by the respective recruiters. Final draft will share it with the

recruiters for their consent. If there are any changes/ modifications need to be done,

respective recruiter will change/ modify and give his consent. Upon receipt of the consent

from recruiter, we will flash the Ad through communication mailers to associates across

globe.

Ad template contains, basic data shared by the recruiter and some other pre-requisites.

Along with the job description, venue we have to include the process how to refer your

buddy and have to provide all necessary details in the template.

Below are some examples.


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In spite of all these efforts, still associates come up with different set of questions. We

need to address each and every query from the associates. Most of them will have

questions related to the status of the profiles which they have shared earlier.

We need to check with respective resource manager on the status of the profile and need

to share it with the associate.

Below are some predefined templates; we have to use them to prepare the final draft.


Below is the sample Ad template used to publish requirement for an Opportunity


Below is the sample Ad template for Weekend Drive, this is called Walk-in template.


B-Channel Approvals:

Before publishing an Ad, there are few things to be taken into consideration. We need to

get some prior approvals. Once we have necessary approvals in place, we need to update

the same in the internal tool or portal. This is called signoff approval.

Signoff is a manpower requisition number, which denotes or defines the number of

associates required to hire for a vacancy. Each signoff valid till certain period of time,

and it will be automatically closed or abandoned once it gets expired. Every recruitment

lead or resource manager will have a head. His approval is mandate to update and

approve the signoffs in tool - {https://satyamuniverse.satyam.com/}

Once we log into the eSupport, we can see set of planets for different groups. All

approval requests will be under the head, named Transaction World.


https://satyamuniverse.satyam.com/

How to Approve Signoff number:

Steps / Path:

eSupport

Transaction World

Circle Desk

Resume Management

Hot Job List

Check the boxes to Approve

Submit


3.4 B-Channel Helpdesk

Being responsive to those who refer and the referrals they submit are critical features that

drive program loyalty, participation, and engagement.

Rapid response to a referral is critical – a lack of responsiveness to employee

referrals is the #1 program killer. The best programs set a target of getting

feedback to the referrer and the referred individual within 48 – 72 hours of

submission

Expedited interviewing – some firms make a commitment to decide whether to

interview/not interview all referrals within a week. Others make a more narrow

commitment, which is to actually schedule an interview with all “A” quality

employee referral candidates within a week of receiving their referral

Referrals must be tagged and the processing expedited – in the best programs,

all referral applications are tagged in order to measure program effectiveness. In

addition, the tagged referrals are given a priority for processing (i.e. fast tracked).

This is necessary in order to ensure that both the employee and the referred

individual feel like they are “special”

“On the spot” screening – consider developing a process where resumes

collected at the referral desk undergo instant screening followed by instant

feedback to the employee and the candidate

Communicating with employees and applicants

High-performing referral programs require frequent and effective communications.

Personalize and target your communications – broad communications

addressed to all employees almost always produce disappointing results. Instead,


develop customized or personalized promotions and campaigns. Periodically push

relevant job openings that require referrals only to the narrow list of appropriate

employees

Provide periodic employee notifications after a referral is made — employees

are almost always nervous about whether their referrals were any good and what

is going to happen to their colleague. The best practice is to electronically notify

employees immediately when their referral is accepted / rejected, if the candidate

is invited for an interview and when the candidate is finally hired or rejected.

Provide periodic feedback to applicants – prospects that have been referred are

also frequently nervous about their chances. At the very least they should be

electronically notified that there referral has been received and accepted. These

notifications can also include an overview of what they can expect, including the

steps in the process, frequently asked questions, and the likely timeframe before

any decision is made.

Develop and use referral champions – a powerful way to inspire employees to

refer is to use senior leaders as referral champions. These executive champions

should participate in communications and help to explain to employees the

importance to the business of the positions being recruited for.

Consider a follow-up meeting after a great referral – after a great referral,

schedule a follow-up meeting with the person. Goals include to hand-deliver the

bonus, to thank them (and their manager), to identify and then learn from their

approach, and to ask them if they know any other stars

Provide direct feedback to employees on weak referrals – make sure that you

provide feedback to individual employees who make weak referrals, so that they

know what they did wrong and how to improve.


Technology support

Globalization of referrals and the requirement for fast processing of applications mandate

that programs use the latest in technology, which in this field advances by leaps and

bounds.

Allow employees to submit using multiple platforms – provide your employees

with multiple options for submitting referrals (web, email). Providing multiple

options can make it easier for busy employees to make referrals 24/7, while they

are “on the run.”

Application website flexibility – the referral website should offer regular and

expedited options.

Online assessment tools – develop and offer online assessment tools so that the

skills of referral candidates can be quickly assessed. Also consider another option

of offering tools that allow the prospects to self-assess themselves before they

agree to become a referral.

Online interview scheduling – develop a website that allows referrals who have

been chosen for interviews to self-scheduling their own interview times

A website that allows employees to track the progress of their referrals – an

internal site can allow employees to continually track the progress of their

referrals as well as their accumulated bonuses


B-Channel Questionnaire

1. Are you aware of what B-Channel is?

Yes No

2. Are you aware of the B-Channel policies?

Yes No

3. Have you made any referrals on B-Channel?

Yes No

4. What is the mode adapted for your initial referrals?

Uploading profile against Job Code

Profile sent directly to Recruiter

Profile shared with Reporting Manager

Profile shared with colleague


5. Are you aware of current openings in the organization?

Yes No

6. How do you get to know about the current open positions?

Communication mail

Information from Project Manager

Information from Recruiter

Information from Colleague

7. How frequently do you receive updates on current open positions?

Daily

Twice in a Week

Weekly

Once in 15 Days

8. Were you aware of the process of uploading the CV’s aptly?

Yes No

9. Was the above process user friendly?

Yes No

10. Do you receive regular updates on B-Channel policy up gradation?


Yes No

11. Do you receive any acknowledgement on the profile uploaded?

Yes No

12. Do you get timely updates with respect to the profile status?

Yes No

13. Are you informed about the candidate status post selection?

Yes No

14. Are you informed about the candidates joining status?

Yes No

15. Are you communicated about the payout cycle required for making the B-Channel payments?

Yes No

16. Suggestions and recommendation

----------------------------------------------------- --------------------------------------

----------------------------------------------------- --------------------------------------


4.2 Analysis

1. Are you aware of what B-Channel is?

96%

4%

Awareness of B-Channel

Yes

No

Analysis:

Almost, 96% of associates were well versed with the name B-Channel and its meaning. There are close to 5% where, they are young graduates just completed their education and started their careers. They are keen to know what is all about B-Channel.


2. Are you aware of the B-Channel policies?

30%

70%

Awareness on B-Channel Policies

Yes No

Analysis:

70% of associates were aware of B-Channel policies. We have power-on policy where we can find all the companies policies including B-Channel policies. After this study we asked each and every associate to go through the power-on policy for further details.


3. Have you made any referrals on B-Channel?

34%

66%

Referrals from Associates

YesNo

Analysis:

We have 66% of associates referred their buddies and this percentage needs to be increased from organization stand point. Once we have more number of associates refers their buddies we can reduce the recruitment cost to the company.


4. What is the mode adapted for your initial referrals?

23%

22%39%

16%

Mode adapted to refer profile to B-Channel

Uploading Profile in eSupport

Profile sent to Recruiter

Profile shared with Reporting Manager

Profile shared with Colleague

Analysis:

There are different sources where an associate can actually submit the profile. But, as per the process each and every profile should be uploaded in the tool. As we see only 23% of associates uploading their profile in the tool. This percentage should be increased in order to process the incentive to the associate. Till date, most of the associates share profiles directly to their reporting managers, known colleagues and recruiters. This should come down and we should educate all associates to upload their referral profiles in eSupport.


5. Are you aware of current openings in the organization?

67%

33%

Awareness of Current Open Positions

Yes

No

Analysis:

This is one of the most important questions for any associate. First they should know the current open requirements across the organization. Once, they identify any opportunity, and then it will be easy for an associate to approach B-Channel and can get regular updates on the status of the profile still the position closed.

As you can see there are 67% of associates knows what are the current open positions in the organization. This is a very good sign and better if it touches 70-75% mark.


6. How do you get to know about the current open positions?

72%

7%

13% 8%

Source of Information

Communication Mail

Info from Project Manager

Info from Recruiter

Info from Colleague

Analysis:

This also considered being one of the important questions. As how they came to know about the current requirements in the organization, what is the source?

We can see from above chart, which shows 72% of associates came to know through internal communication mail. So, Ads are more important source to capture the profiles. Next through few recruiters, this may also depend upon the relationship. So, regular mail updates play very important role to capture the referral market.


7. How frequently do you receive updates on current open positions?

19%

21%

39%

21%

Updates on Current Open Positions

Daily

Twice in a Week

Weekly

Once in 15 Days

Analysis:

Frequency is also an important aspect coming to current open requirements. Though associates come across some requirements, but, by the time they know there is an open position, next day it may be fulfilled.

There are 39% of associates are getting weekly updates and 19% daily. So, timely refreshing jobs and updating regularly to the associates is very critical.


8. Were you aware of the process of uploading the CV’s aptly?

60%

40%

Process Awareness

YesNo

Analysis:

60% of associates were aware of B-Channel process. This need to be improved and organization should take up some steps in order to improve this percentage.


9. Was the above process user friendly?

81%

19%

Process User-Friendly

YesNo

Analysis:

Again, this is purely depends upon tool (what we called eSupport) where, each and every associate upload their profiles. It is our responsibility to provide them a user friendly system to upload profiles.

There are 81% associates satisfied with the process and performance of the tool. This is a very good sign. Better, if we can increase this percentage


10. Do you receive regular updates on B-Channel policy up gradation?

67%

33%

Information on Policy Updates

YesNo

Analysis:

Regular updates on change in policy should be taken to each and every associate. As you see there is 67% population receives regular updates and this need to be 100%. The only reason being, any policy should be well known and understand by an employee in an organization. This percentage should improve a lot.


11. Do you receive any acknowledgement on the profile uploaded?

81%

19%Acknowledgement on Profile Received

YesNo

Analysis:

As our system is a tool driven system, as and when any profile updated / uploaded there will be an auto generated mail as an acknowledgement to the associate. This will be the proof for that associate. There is 81% currently but, it should be increased to 100%


12. Do you get timely updates with respect to the profile status?

67%

33%

Timely Updates on Profile Status

YesNo

Analysis:

Feedback mechanism is very crucial for employee referral program. Else there will be lot of dissatisfaction among the internal associates on the referrals made. Here we can see there are 67% of people receive timely updates on their referral status. This percentage need to be improved.


13. Are you informed about the candidate status post selection?

59%

41%

Timely Updates on Post-Selection Status

Yes

No

Analysis:

As we already discussed how feedback mechanism is very crucial for employee referral program. Here, this is for post selection of a candidate. There is only 59% of people receive timely updates on their referral status. This percentage need to be improved a lot.


14. Are you informed about the candidates joining status?

37%

63%

Updates on Joining Status

Yes

No

Analysis:

As and when any referral candidate joins the system, as per the tool there will be an auto generated mail will reaches the associates mail box. Though, there is a mechanism, it is better a formal communication from the recruiter would definitely delight the associate who referred the candidate.


15. Are you communicated about the payout cycle required for making the B-Channel payments?

13%

87%

Updates on Payment & Payout Cycle

Yes

No

Analysis:

Of course, reward system is a kind of motivation. But, we should communicate the associates on the updates on Payment and Pay cycle. In this area, we are almost there at 87% and needs a bit improvement and this should touch 90-95%.


Findings

The Employee Referral Program is responsive. Employees know what it takes to succeed

at a company, and they understand its culture, so they tend to refer appropriate

candidates. They know others with similar skills, such as former coworkers, schoolmates,

members of networking groups, and friends. Hard-to-fill positions those are essential to

the organization. So, all employees are encouraged to make employee referrals,

regardless of position.

Referral programs save significant recruitment costs for the organization. Professionals

recruited through referrals tend to stay longer with the organization as they are already

acquainted with the situation within the organization. They get more quickly absorbed,

both culturally and socially.

Below are some of the key Observations:

Quality Resources – Data shows that referral candidates can be five times more

likely to get hired than other candidates. This is because educated employees

know that their role is to seek out individuals with superior skills and experience.

Performance – New hires from well-designed referral programs produce the

highest on-the-job performance of any recruiting source. In addition, referral new-

hires have significantly higher retention rates than hires from other sources.

Candidates are a Better Fit – Well-designed referral programs produce a high

percentage of candidates that fit the culture. This is because your employees know

your corporate culture and they are able to screen out those who are a weak fit.

This means that hiring managers waste less time on candidates with the right

skills but the wrong “fit.”


Reduces Management Time – These programs generate fewer weak applicants,

managers have to spend less time interviewing weak candidates and sorting

through less-than-optimal resumes. And because of the quality of the candidates,

managers are generally highly satisfied with requirements filled through the ERP.

Low Termination Rates – Because employees add a layer of skill prescreening

and fit assessment, some referral programs have data that prove that referral hires

have as much as a 350% reduced chance of having to be fired.

Improves Employee Retention – A referral program that involves a large

percentage of your employees will likely increase the retention rates of your

current employees. This is because your employees will need to learn more about

the practices that make your firm great in order to sell potential referral prospects.

This increased understanding and knowledge will help build their pride and their

loyalty as current employees because they are reminded why their firm is superior

and why they should stay. Widespread learning about the company’s strong points

may also serve to strengthen the corporate culture.

Increase Productivity – Higher quality hires mean that new hires get up to speed

faster. In addition, because many employees will mentor, guide, and assist the

individuals who they have referred, often the time to productivity will be even

faster.

Added Diversity – Well-designed referral programs have no negative diversity

impacts, and targeted ones with an emphasis on diversity can actually increase

diversity.

A Morale Indicator – If employees don’t like a firm or their boss, they will not

refer others for a job. As a result, employee referral rates closely mirror employee

morale, so managers and HR can use referral rates as an indication of good or bad

morale in a function or unit.


Recommendations

Suitable rewards and encouragement are a must to motivate existing employees to refer

candidates. This also increases the momentum of referrals from employees. Human

resources professionals should ensure that the resumes of referred candidates are given

priority so that follow-ups are not delayed.

Make it easy for existing employees to refer candidates. Circulate an updated list of

vacancies regularly. More importantly, ensure that employees are paid their rewards in a

timely manner and without the need for them to remind you.

Below are some recommendations that referral quality and volume:

Create a Target Pool (Data Base) – Do not spam all employees with referral

requests. Instead, develop a targeted pool of referrers (a referral database) that can

be proactively searched in order to identify and approach the small number of

individual employees who have a high likelihood of knowing individuals with the

required skills and experience for a particular job.

Proactively Approach Employees Hired from “Target Firms” - If your hiring

managers are specifically seeking employees from desirable target firms,

proactively approach your employees who earlier used to work there.

Referral Events – Periodic open houses, video conferences, special events and

open forums can aid in highlighting your program and its current needs.

Recruiters can be present to provide training, accept spot referrals, to do instant

assessments, and even to offer rewards for exceptional names.

Guarantees an Interview to Top Prospects – By providing top performers and

top referrers with the opportunity to guarantee an interview for anyone who they

refer, you dramatically reduce their fear that their candidate won’t even qualify

for an interview. Removing this fear of rejection by both the referring employee

and the potential candidate you can dramatically increase the number and the

quality of your referrals.


Develop a powerful slogan – Although most referral programs have a slogan,

very few of them are compelling, memorable, and drive action. The best program

slogans are pretested to ensure that they provide the maximum impact. Examples

include “A players know other A players,” “Help us catch a rising star,” “You

recommend … we hire,” etc.

Improve your job descriptions – At some point in every referral relationship,

the prospect will want to see the actual job description. Work with Compensation

to ensure that the position descriptions are written in such a way that they actually

excite potential referrals. Also compare your job descriptions for an open position

to the competitors’ in order to ensure that yours are more compelling.

Do-it-for-the-team should be the primary motivator - Instill in your employees

that the primary reason that they should refer people is because the team wins

“when it has the best players.” It is a superior motivator over monetary rewards,

because it turns referrals into an opportunity to provide their teammates and

themselves with the very best coworkers.

Offer a “hard to hire” bonus supplement – for “hard-to-fill” key or hot jobs,

offer a higher kick-up bonus or contest prize for a brief period of time. In some

cases, hiring managers are willing to pay this bump up bonus

A Thank-You Note - A personalized note or call from a senior executive

thanking the employee who made a high-impact referral is cheap but powerful.

Satisfaction of the employees

I. Quotes from successful referrals

“Thanks for organizing the show and motivating us to refer more candidates to Mahindra Satyam. I have collected my gift voucher worth of Rs 5000 and that was a pleasant surprise for me and am happy about it. I sincerely appreciate the effort of B Channel team and Helpdesk buddy team for all their efforts :)”


-- Dinesh Jayaram

“I am happy that I have referred my friends and they got selected and got placed in various positions. Buddy channel gave me an opportunity to refer my close friends in their respective domains. B-channel mails helped me to go through this referring process.”

--Raghunandan Karanam

“B channel brings to provide good opportunities to people who are looking for jobs.”

-- Sreenivasa Rao

“Helping friends to be with us”

-- Nagaraj

II. Quotes from New Joinees

“It was an overall nice and good experience”

--Aravinda

“Good Process”

--Mandir Kumar

Conclusion

The campaign was very successful which was apparent from the results it produced. The

number of referrals received in this quarter has gone up significantly to 4180 when

compared to the previous quarter which produced only 1531 referrals. The quality of the

referrals also perked up which is evident from the fact that the offers made have gone up


by 41% and the number of candidates joining has increased by 50% in this quarter when

compared to the previous quarter. Apart from this, the satisfaction of the employees also

improved because of the additional awards and rewards they received. The more satisfied

the employees are, the more they connect to the referral program and the more they are

motivated in bringing quality hires into the organization. The figures concerning the

profiles and the quotes from various winners are listed below:

Category\Month Apr'12 May'12 Jun'12

No of Profiles 1400 1400 1380

Offered 132 131 156

Joined 66 98 93

From the analysis, it can clearly be stated that the promotional scheme run by B channel

was a huge success and improved the number and quality of referrals. More such

schemes can be run from time to time to keep the employees motivated.

To improve the employee referral program, the first thing to know is why don’t

employees refer?

According to some renowned HR leaders,

- Three-Fourth of the people do not know anyone suitable for that position

- Half of them are afraid of the consequences of referring a bad candidate

- Around a quarter of them feel the process is too much complicated.

Case Study

Employee Referral Program: B-Channel Process at Mahindra Satyam


One of the associates Mr. Ravinder referred a candidate Mr. Anil for the position

Developer, Oracle Applications. Ravinder got to know about the requirement through a

communication mailer from communications team. As per the process he should upload

Anil’s profile into the system i.e., in the tool eSupport, Mahindra Satyam. Due, to a

technical glitch in the tool he is unable to upload Anil’s profile in the system. He tried his

best to enter the details prior to the Interview. He asked his friend Anil to attend the

interview by giving following details to the recruiter, “Source – Associate Referral,

Associate Name and GID”. Next day, Anil gone through the interview process with the

above details mentioned on his profile and got selected.

Later, the concerned recruiter discussed with Anil and finalized the offer. As per the

process recruiter need a reference number (Candidate ID or Applicant ID – A unique

number defines the source of the profile) for Anil to release the offer. As he got the

source of the profile which been mentioned on the top of the resume, he communicated

with Ravinder for Applicant ID to release the offer and also, the reason behind not

uploading the profile before the interview process. Later he got the details from Ravinder

and offer has been released to Anil.

Couple of months later, Anil joined the organization. Policy says, after completion of 3

months from the time of joining, associate will get the referral payment. In this case, after

3 months from the date of joining of Anil, Ravinder informed that he would not be

eligible for the referral payment. Reason being, profile uploaded in the tool after the

technical interview.

What best can we do in order to have associate delight? How do you address and analyze

this case to close it as per the policy? What is the solution for this case, where the

associate has to get his referral bonus?

Observations from the case:

Associate referred a candidate for a developer position and asked to go for an interview

without uploading the profile. Candidate attended for the interview and has been selected,

offered and joined. After 3 months from the date of joining of the candidate, associate


expected to get his referral bonus. Later he realized, he is not eligible for the referral

bonus as he uploaded the profile after the date of interview.

He approached Help Desk for his referral payment as he had a problem with the tool

while uploading the profile.

Understanding & Analysis:

Associate Referral Policy – Date of uploading the profile in the tool should be prior to

the Date of Interview (Profiles directly coming from business without uploading into the

tool will not be entertained)

As per the policy, associates will not be eligible for payment of referral bonus, if he/she

uploads a profile after the date of interview.

But, in this case associate had some technical issues uploading the profile. So, he gave his

details to the candidate and asked him to write it on the top of the resume. Based on those

details, recruiter contacted the source of the profile captured required information to

release the offer. Later, candidate has been on boarded.

Solution:

Well, here in this case associate is not eligible for the referral payment. But, we have to

consider the fact that, he had some technical issues and have communicated the same

with the recruiter about the same. So, first we need to take consent from recruiter.

We should ask details about the offered candidate, date of interview and offer release

details from the recruiter. Also we need to check the source of the profile.

Based on the details furnished by the recruiter, we have to check with him on the date of

interview and date of posting the profile and reasons for mismatch in the dates. On

confirmation with concerned recruiter, we should ask for any mail proofs that took place

between the associate and the recruiter.


Still if we are not convinced, as this is during a weekend drive and candidate clearly

mentioned the referral details on the resume. If, we can get the hard copy of the same

then, with some approvals we can close this case.

Final option available with us is to check the hard copy of the profile at the time of

interview and confirm the source of the profile. If there is no hard copy then we should

go for the approval request for the referral payment from the Head, B-Channel who is the

approving authority.

Here in this case, we have all the details from the recruiter. Mail copies, hard copy of the

resume etc. we have collected necessary information from the recruiter, associate and the

candidate. A business case has been prepared for approval request from Head, B-Channel

and processed the payment for Ravinder.

In order to encounter this kind of situations in future, few recommendations have been

made to update the B-Channel policy.

Associate Referral (B-Channel) Policy Update

Associate referral – Date of uploading the profile in the tool should be prior to the Date of Interview (profiles directly coming from business without uploading into the tool will not be entertained)

Note: For referrals coming into walk in drives – the name of the referrer (Associate) & GID has to be mentioned on IOF (Interview Observation Form).

Article

Employee Referrals: The Cost-Effective Way to Recruit


One of the surveys found that 54% of the companies had problems attracting employees

with critical skills, despite the high unemployment rate and 37% having trouble hiring

top-performing employees. You can overcome the shortage of top performing employees

when you create a work culture that inspires great employee referrals. Here is what works

to garner employee referrals and the actions that will submarine your employee referrals.

Human resources professionals are increasingly using employee referral schemes as a

cost-effective way to recruit professionals without the need to spend on advertising costs

or placement agency fees. In fact, they are now putting as much emphasis on employee

referrals as on other recruitment methods.

Under employee referral schemes, existing employees are encouraged to bring in new

professionals, and they are suitably rewarded if the person they refer is recruited. As

such, employee referral systems provide win-win situations for employees, too, as they

not only earn cash incentives but also get a chance to share the workplace with friends or

former colleagues.

Employee Referrals: Critical Component in Identifying Good Talent

Employee referrals are a critical component in your efforts to obtain the best potential

employees. Employee referrals provide better than average candidates because employees

know your company culture and have an idea about what employees work successfully in

your organization. Employee referrals also reflect on the referring employee who wants

to be positively regarded in your organization.

According to Dr. John Sullivan, "Many recruiting managers with woefully under-

performing programs think they have great programs and are somewhat shocked when

they learn that, on average across all industries, 1:3 hires come from employee referral

and that it is no longer uncommon for more than half of all external hires to come from

employee referral in organizations with leading talent management functions...If your

organization doesn’t have an ERP, or has one that produces less than 30% of all external

hires," examine your referral program to determine why you experience poor results.


http://www.ere.net/2010/06/14/advanced-employee-referral-programs-%E2%80%93-best-practices-you-need-to-copy/

http://humanresources.about.com/od/organizationalculture/a/culture.htm

Human resources professionals have been successfully recruiting good quality talent

through employee referral programs, especially in sectors with shortages of prospects

with adequate skills. While referral programs bring quick-turnover advantages and

drastically reduce the cost of recruiting new talent, they should be used in combination

with other recruitment methods to balance the quality of talent entering the organization.

Employee Referral Programs: Drawbacks

Employee referral programs do have a few drawbacks, though. For one, they run the risk

of limiting diversity of talent within an organization. Often, referred candidates belong to

the same field and come with the same skills or qualifications as those who refer them.

Also, sometimes there may be greater bonds between the referrals and those who refer

them than between the referrals and the organization. The possibility of new recruits

distracting their friends from their duties cannot be ignored with recruitment through

referral schemes.

Finally, organizations are woefully incompetent at providing feedback to the referring

employee for referrals. Undermining their efforts, too, is the speed at which employee

referrals are acknowledged and reviewed. The most important factor in employee

referrals is swift candidate evaluation and feedback to the referring employee.

Encouraging employee referrals and successful employee referral programs are a win for

organizations that gain qualified employees, a win for employees who get to work with

qualified coworkers, and a win for referring employees who benefit from the recognition,

or in some cases, the financial incentives of their employee referral program. Employee

involvement is a key to an effective employee selection process.

Article – Three Men and Their IT Journey

Three Men and Their IT Journey


http://humanresources.about.com/od/selectemployees/qt/selection-process-employee-involvement.htm

http://humanresources.about.com/od/selectemployees/qt/selection-process-employee-involvement.htm

http://www.hrcrossing.com/article/lcarticlearchive.php

Mahindra Satyam has turned around and is now merging with Tech Mahindra. But the

next leg of the journey could be far tougher.

Vineet Nayyar, vice-chairman of Tech Mahindra, says he remembers "the moment" like

it was yesterday. On 7 January 2009, he was in his office at the Pune headquarters of

Tech Mahindra when an investment banker called up and insisted that he switch on his

television set immediately. News was breaking of Satyam Computer Services founder

Byrraju Ramalinga Raju's resignation and his self-confessed Rs 7,800 crore fraud in the

company's accounts. Even as he watched the events unfold, an idea began germinating in

Nayyar's mind.

Weeks later, at a dinner with Mahindra Group vice-chairman Anand Mahindra at the

corporate headquarters in Worli, Mumbai, Nayyar broached the idea of making a bid for

Satyam. "Anand laughed. And his first reaction was, ‘Vineet, did you have one too many

(drinks) tonight?'" It was, after all, a tainted organisation embroiled in a legal tangle with

an uncertain future and inflated accounts. However, Nayyar recalls, in less than 10

minutes Anand was not only on board, but began asking some tough questions, already

planning a strategy.


Some deft moves and calculated risks later, the Mahindra group bagged Satyam in April

2009 through a government-coordinated sale for a price tag of Rs 1,757 crore — giving it

a 31 per cent stake — and renamed it Mahindra Satyam. "We knew that Satyam had real

business, real clients... and expertise in certain areas, though nobody knew to what extent

the numbers were incorrect," says C.P. Gurnani, managing director and chief executive

officer of Mahindra Satyam.

In fiscal 2011-12, following an excruciating integration exercise and restatement of

accounts that shrank Satyam to about half its size, the company reported it was in the

black with a net profit of Rs 1,306 crore. Soon enough, M&M announced a merger of the

two listed firms at two shares of Tech Mahindra for every 17 shares of Mahindra Satyam.

The combined entity will more than double Tech Mahindra's revenues of Rs 5,488 crore

to Rs 11,884 crore ($2.3 billion at current rates), making it the fifth largest IT services


company in India behind the $10.17-billion TCS, $7-billion Infosys, $5.9-billion Wipro

(IT business) and the $4.1-billion HCL Technologies. Mind you, this pecking order

excludes the $6.8 billion Cognizant Technology Solutions which, though headquartered

in New Jersey, US, has about 75 per cent of its employees in India. The new entity -

likely to be named either Mahindra IT Services or Mahindra Consultancy Services - will

employ 75,000 people in 84 countries and have cash reserves of Rs 3,300 crore.

But what kind of an entity will it be? Will it have the wherewithal to overtake any of the

Top 5, or will it remain the leader of the second rung that includes the $1-billion iGate-

Patni, the $384-million MindTree and the $310-million Hexaware, among others? To

start with, parent M&M expects Mahindra IT (let's call it that for the moment) to double

its size in three years. That is reasonable, considering Indian IT's big three — TCS,

Infosys and Wipro — have grown nine times since 2003. But only just.

The global economic scenario has been prickly since the great US banking crash of 2007-

08. While it has always managed to stage a recovery within two years of a crash since

1945, the economy is struggling even four years after the recession this time around. In

such a macroeconomic scenario, the IT services pie has remained stagnant at around $850

billion for the past three years. This year, too, it is expected to either remain flat or grow

at a tepid 2-odd per cent. Where does that leave Mahindra IT? "While the established

model will continue to be there, the next wave of growth will come from developing

innovative solutions," says Anand Mahindra.

What It's Up Against:

The CEO of a rival IT major says, "...doubling a company in three years in the current

environment is not tough, it is impossible. The Indian IT industry will grow this year by

10 per cent. Mahindras have done a good job of turning around Satyam... but the targets

they have are not realistic." A report released in June by Macquarie Equities Research on

Indian IT services says "sub-par growth" in US and world GDP is expected to be over 12-

24 months. The report, Trouble in Paradise, adds: "This, coupled with the structural pain

that we are seeing in the BFSI (banking, financial services and insurance) vertical,


implies that visibility on double-digit top-line growth for Indian IT vendors is cloudy. PE

multiples (will) remain below historical averages seen in 2003-08."

Such a scenario means Mahindra IT's growth will have to largely come from displacing

an incumbent rather than getting a bigger share of growth. "In the past 6-7 years, we grew

the revenue 10 times at Tech Mahindra. From a single client, British Telecom (BT), Tech

Mahindra today has 130 clients across the globe," says Nayyar. "From just IT services,

we now provide everything in telecom. There is not a single telecom project for which we

do not get RFP (request for proposal). We compete with IBM, Huawei and TCS and win

against the best."

Mahindra IT needs to outpace its peers. But historically Tech Mahindra, a smaller

company compared to the Top 5, has grown slower than its peers. Its 7-year compound

annual growth rate (CAGR) of 27.6 per cent is slower than the fast-growing Cognizant's

39.8 per cent, HP-owned MphasiS's 29.7 per cent and HCL Tech's 28.6 per cent. Its

growth is only slightly better than the far larger TCS, Infosys and Wipro's 7-year CAGR

of 24.2 per cent, 24.2 per cent and 22.5 per cent, respectively. The combined entity has a

7-year CAGR of 41.9 per cent, which while being even higher than Cognizant's, includes

several years of what are believed to be Satyam's inflated numbers under Raju.


The M&A Route:

With all its peers nearly as aggressive as it is, Mahindra IT may need to take the

inorganic route of mergers and acquisitions. Remember, besides the Rs 3,300 crore post-

merger cash pile, the group has parked 204 million treasury shares of the combined entity

(equivalent to 10.4 per cent equity) in a trust to be used in the event of an M&A

opportunity.

M&As, though, require a lot more than just cash. They need vision, guts and risk-taking

ability. All the moneybags of Indian IT have so far displayed none of these traits, with the

exception of minor acquisitions off and on. The leader, TCS, currently sits on a cash pile

of Rs 6,780 crore, Infosys on Rs 20,072 crore and Wipro on Rs 7,767 crore. Even HCL

has cash reserves of Rs 2,371 crore. Infosys's recently appointed chairman, K.V. Kamath,

is goading its management into making some bold acquisitions to accelerate growth.

You can argue that so far the IT majors did not need M&As to grow. Their organic

growth was itself proving tough to handle. A large acquisition and its painful integration

would have been another headache. But the pause in the global economy may necessitate

some courageous steps. "Over the past two months, global macroeconomic conditions

have not showed any signs of improvement... clients of Indian IT companies will rein in

their tech spending for FY2013. It is prudent to tone down the bullish demand stance

until more clarity emerges," notes the Macquarie report.

Fortunately for Mahindra IT, in recent times, M&M has gone on a buying spree around

the world and has set up a core group that examines global M&A opportunities. It can

always bank upon the parent to pull off a bold acquisition.

Strength in Unity:

The combination's biggest advantage lies in the operational synergies it will derive from

economies of scale, standard processes and elimination of duplicate departments. The

size of the combined balance sheet will also make it eligible to bid for large sourcing

contracts that require a strong balance sheet as a pre-condition to bidding. One way to

leverage the combined entity is by cross-selling more services to the existing client base


(most IT firms report 95 to 99 per cent of revenues from repeat business). Sujit Baksi,

president of corporate affairs and business services of the group, says the ‘joint go to

market strategy' of the sales teams is already yielding results. For instance, in security

services, capabilities and competence existed in Tech Mahindra and these solutions have

now been cross-sold to enterprise customers of Mahindra Satyam. Similarly, the ERP

(enterprise resource planning) and business intelligence solutions of Satyam have been

sold to Tech Mahindra's telecom customers AT&T and BT.

Its existing clientele mainly comprises of legacy businesses such as enterprise business

solutions and infrastructure engineering solutions. Gurnani says they have identified five

key horizontals for growth: networks, mobility, analytics, cloud and security (NMACS).

These are emerging areas. For instance, in cloud computing where even large

organisations collaborate with specialist firms, "we will compete and co-opt other

players," says Gurnani.


"The combined firm has deep strengths in manufacturing, telecom and engineering

services, which they can leverage to deliver innovative solutions," says Hansa Iyengar,

senior analyst with Ovum, an outsourcing and offshoring research and advisory firm.

"Over-dependence on developed markets is a cause for concern, but in Latin America,

China, Japan, West Asia and India, they can grow faster."

Even while the effort is on to reduce over-dependence on certain clients and geographies,

Vikram Nair who heads the European operations (about $1 billion of the company's $2.3

billion revenues, including the $450 million BT account) says M&M group's presence in

a large number of areas is very helpful. "We eat our own dog food, before we deploy it to

our customers," he says. Karthikeyan Natarajan, who heads the company's engineering

services division, says he is well placed to leverage the defence offsets opportunity: "For

most of the aerospace, engineering, aviation and defence companies, the first port of call

in the Indian market is M&M."

A Future in Verticals...

But as Mahindra IT embarks on the growth journey, it is set to encounter some serious

headwinds. The fiercest of them would be in its core area of strength: telecom. The

combined entity will still earn 47 per cent of its revenues from the vertical, which itself is

facing a slowdown. Mahindra IT's second strongest vertical Manufacturing, which

contributes 17 per cent to the combined revenues, has also suffered the most since the US

and European recession as industrial activity came to a standstill.

The company's telecom growth will also depend on how its re-tendering for its top client

– BT – fares. The process is likely to be completed this year. Though it has retained its

market share in projects negotiated so far, BT's driving a hard bargain for discounts that

could hit margins. "We note that Tech Mahindra's margins (gross) have already fallen

sharply by 1,100 bps since March 2009 and will see further downward resets post the re-

tendering... albeit a weak currency will offset some of these headwinds," notes an Emkay

Research report. "Operation metrics (were) weak with revenue from Top 5 and Top 10

clients declining by 4 per cent quarter-on-quarter (q-o-q) each (Top 2-5 client revenues

were flat q-o-q ). Discussions with (company) management indicate revenue growth at a


major North American telco was also tepid, impacted by the lower number of billing

days," it adds.

The world's biggest industry vertical for IT outsourcing happens to be BFSI, with a share

of 35 per cent of the $850 billion industry. Analysts point out that Satyam is an also-ran

in the crucial BFSI vertical, though it works with eight of the top wholesale bank brands,

four of the top 10 retail companies and three of the Top 5 credit card issuers.

Most large players such as TCS, Infosys and Wipro earn between a quarter to a third of

their revenues from this segment, whereas Mahindra IT gets a mere 11 per cent. Its BFSI

revenues total $200 million against Infosys's $2.8 billion. Rivals say they have not

encountered Mahindra Satyam in any major BFSI deal in the recent past. "There are no

quick fixes, but I am confident that we will grow faster in this market," says Gurnani (see

interview on pages 32-33).

"We Want To Double Revenues"

Chander Prakash Gurnani, who will be the CEO of the new

merged entity, spoke to BW about the integration process and

the future plans for the firm. Excerpts:

What are your aspirations for the new merged entity?

Once the complete merger process is through, the new company will have around $2.3

billion in revenues, around 75,000 employees, marquee customers and a strong portfolio

of solutions.This is a merger of equals. Over the past seven years, if you take the

cumulative rate of growth of Tech Mahindra and Mahindra Satyam together, we have

grown above all our peers.

Our ambition is to double the revenues to $5 billion by 2015. Given the current market

conditions, doubling revenues in three years will be challenging. But we have a strategy

in place. Globally, we are one of the largest players in telecom. Mahindra Satyam brings


world-class expertise in enterprise solutions, manufacturing and engineering solutions. In

areas such as big data, mobility, platform-based business process outsourcing, security

and engineering services, we want to be among the Top 5 brands in the world, and we

will achieve this through competency building and innovation. We want to grow our

share of revenues coming from the BFSI segment.

What have been the integration challenges?

We have been engaged for three years... being part of M&M Group. Over the past couple

of quarters, we have closely examined and worked on how to pull this off in a smooth

and seamless manner, with little impact on associates (employees) and none on

customers. We have set up a team to jointly work on this, so that we take best practices

from each company and incorporate them into the new entity.

All the restructuring that was required to be done at Satyam has already been done.

Facilities have been consolidated, accounting and revenue recognition processes

streamlined to the highest standards of the M&M Group. Except for a handful of people,

that too in shared services such as accounting and facilities management, there will be no

impact on the bulk of our associates, and even there, most of them will be redeployed.

We are a growing company looking to attract and retain the best of talent. The message I

want to underscore is that there is a new old kid on the block with a proven track record,

and we are hungry for growth.

One big hope is an expected $22-37 billion outsourcing opportunity arising out of the US

Health Care and Education Reconciliation Act of 2010, popularly known as Obamacare

for the backing the Bill got from the US President. However, with just 3 per cent of

Mahindra IT's revenues coming from the healthcare and lifesciences verticals, the

company's experience in the sector is limited and may be a constraint in grabbing

contracts. The business will depend on whether the US allows health records of citizens

to be stored or processed outside its boundaries.

Gurnani says the company has invested aggressively in building platform-based and IP-

led solutions. "The proof of our strategy will be in the execution over the next few years,"

he says confidently.


Innovation: The Next Wave

Mahindra IT will also have to cope with a serious mid-life crisis in Indian IT. Clearly,

Version 1 of Indian IT — comprising large offshore centres doing low-end technology

work — has become a commodity business facing tremendous competition and cost

pressure from emerging economies. It will continue to make money and still be

reasonably profitable, but it will not bring in complex technology contracts worth

hundreds of millions of dollars. Hence, in setting his expectations from the combined

entity, Anand Mahindra has made his intentions very clear: Mahindra IT must innovate

far more than its rivals.

The group has made a small beginning in that direction by setting up two kinds of funds.

First, an internal fund for ‘intrapreneurship'. Manish Mehta, chief vertical solutions

officer of Mahindra Satyam, says the company has no specified corpus for now, but it

will be augmented on an ongoing basis. It aims to encourage employees who wish to set

up their own company, to continue to be part of the group, by providing them funding,

mentoring and market opportunities. The group expects this to be a key tool in attrition

reduction.

The second fund is an ‘external focused' one. It has a corpus of $50 million. It was set up

by Mahindra Satyam in February 2012 with SBI Holdings (part of the Softbank

Investment Group of Japan), and will invest in promising information and

communications technology companies. Though various proposals are being examined in

this connection, an investment is still to be finalised.

Project Symphony:

By itself, the merged entity will kick off with one major advantage: there is practically no

overlap in the businesses of Tech Mahindra and Mahindra Satyam. While Tech Mahindra

earned 96 per cent of its revenues from telecom, Mahindra Satyam was focused on

manufacturing, BFSI, healthcare, engineering services, media and entertainment. Even in

terms of size, it is a merger of near equals (Tech Mahindra's revenues add up to $1.1

billion and Mahindra Satyam's to $1.2 billion).


However, there are integration challenges — though the company wants to downplay

them. The 40,000 Tech Mahindra employees are relatively better paid, compared to the

34,000 employees of Mahindra Satyam. Perks ranging from on-site allowances to the

number of days of leave differ. A Tech Mahindra employee says, "After spending a

specified period abroad, when one returns to India, one gets a $1,800 allowance, which is

being done away with. We have had this for years. Why should we give it up now?"

Sujitha Karnad, who currently heads HR for Tech Mahindra, says that since there was a

long courtship before the marriage, the companies are addressing all these concerns. "In

any union, there will be some friction. Our effort is to minimise, if not completely

eliminate, it. We have adopted a greater degree of transparency and enhanced

communication."

The integration process — internally called Project Symphony — is drawing up a blue

book of best practices from both companies. Senior vice-president Mahesh Nagaraj, who

is leading the integration effort, says the concerns are being addressed through surveys

and feedback mechanisms. Aniruddha Bhosale, research analyst at Deutsche Bank's

Securities division, in a report says that the new company is trading at a discount of 45

per cent to HCL Technologies, the No. 4 player. "...the valuation discount will narrow.

While for Tech Mahindra shareholders, the merger will be earnings per share-dilutive

initially, it entails long-term positives."

As the merger takes shape, the combined entity finds itself in a delicate stage of its

evolution. And while it tackles the growth and profitability challenges, the management

will have to keep an eye on the legal tangle it continues to face owing to the Satyam

fraud. The Income Tax Department, for instance, has slapped a Rs 616-crore claim

against Satyam (with the matter in court, the interest amount keeps rising).

The Raju family claims Satyam owes them Rs 1,230 crore (total dues, with penal interest,

according to Raju's lawyer Niranjan Reddy, are over Rs 2,000 crore). IL&FS Engineering

(formerly Maytas Engineering) has sought Rs 650 crore towards money it says had been

lent to Satyam when Raju was the chairman. Mahindra Satyam, on its part, is claiming Rs

275 crore from the previous management and its auditor, PricewaterhouseCoopers.


Meanwhile, the group has had some success with international claims. Mahindra Satyam

paid $125 million to settle a class action suit in the US and another $70 million to settle

UK-based Upaid Systems' claims for allegedly providing wrong documents resulting in it

losing a patents case. The trick is in ensuring challenges do not bog down Mahindra IT's

Top 3 men who have embarked on the journey of a lifetime. For Gurnani, a chemical

engineer by training, it's time to get the integration chemistry right.


REFERENCES

http://www.mahindrasatyam.com/news/documents/Tech-Mahindra-and- Mahindra-Satyam-Merger-Announced.pdf

http://www.nptel.iitm.ac.in/courses/IIT-MADRAS/Management_Science_I/ slides/4_2s.pdf

http://www.websukat.com/smu-books/human-resource-management/4- recruitment-and-selection.pdf

http://recruitment.naukrihub.com/sources-of-recruitment.html

www.ere.net

www.hrworld.com

www.citehr.com

www.mahindrasatyam.com

www.monster.com

www.naukri.com

www.timesjobs.com


http://www.timesjobs.com/

http://www.naukri.com/

http://www.monster.com/

http://www.mahindrasatyam.com/

http://www.citehr.com/

http://www.hrworld.com/

http://www.ere.net/

http://recruitment.naukrihub.com/sources-of-recruitment.html

http://www.websukat.com/smu-books/human-resource-management/4-recruitment-and-selection.pdf

http://www.websukat.com/smu-books/human-resource-management/4-recruitment-and-selection.pdf

http://www.nptel.iitm.ac.in/courses/IIT-MADRAS/Management_Science_I/slides/4_2s.pdf

http://www.nptel.iitm.ac.in/courses/IIT-MADRAS/Management_Science_I/slides/4_2s.pdf

http://www.mahindrasatyam.com/news/documents/Tech-Mahindra-and-Mahindra-Satyam-Merger-Announced.pdf

http://www.mahindrasatyam.com/news/documents/Tech-Mahindra-and-Mahindra-Satyam-Merger-Announced.pdf

Documents

Employee Referral Program at Mahindra Satyam