Hiring the right candidate is not an easy task. Companies use various methods, such as career sites, job boards, agencies and employee referrals to hire suitable candidates for vacant positions. Of these sources, employee referrals are the most preferred.
According to Jobvite, an applicant tracking system (ATS) and social sourcing provider, employee referrals produce the highest number of hires. In a survey conducted by Jobvite in 2012, 21 percent of applicants are hired through career sites, 15 percent through job boards, and an enormous 40 percent through referrals.
Interestingly, of the various sources, referrals constitute just seven percent. The data clearly indicates the demand and supply gap in the sector. Nimit Bavishi, Mitesh Jain, and Harshit Bavisi saw an opportunity, and decided to bridge the existing gap in this segment. In June 2015, they launched Happy2Refer, an employee referral app aimed at helping brands leverage the power of referrals for recruitment. It works towards maximizing the power of organization's social networks combined.
“The hiring market is worth $400 billion globally and $4 billion in India itself. Growing at 27 percent CAGR, hiring itself is a great market to be in. We believe that referral, which is relatively untapped, is inherently disruptive in the recruitment process. Employees working in organizations understand who fits a particular role better than anyone else. Thereby, referral candidates are inherently a high quality talent pool,” says Nimit Bavishi, Co-founder, Happy2Refer.
He adds that, the successful hiring rate for job boards is one out of 72, whereas for referral, is one out 10. Referrals are nearly 10 times as effective. Yet, less than one in ten people are being hired through referrals. “Now that didn't make any sense to us. So, we decided to dig deeper and help make referrals better.”
Happy2Refer claims that it is the first-of-its-kind mobile app in the referral segment. Being an app, it has created a tremendous potential for reach and ease of referral.
“In addition, we have built intelligence systems that we call 'Smart Refer'. Smart Refer connects to a referrer's networks and recommends who in the network is a great fit for a particular role, thus opening up a passive talent pool through referrals. To enhance engagement, Happy2Refer comes with a loyalty program with reward partners such as Amazon,” says Nimit.
It works on a ‘sign-up plus success’ fee model, which lets the companies realize value, as well as maximizes its potential.
The business is completely bootstrapped, with support from its startup accelerator SparkNext. A large amount of money has been invested in building the product. The startup is in talks with three different investors, and is in the process of raising a seed round of funding. The venture plans to put the next stage of investments into enhancing the solution, as well as raising a team to increase reach.
There are other companies in the field, such as RippleHire, SpringRole, HackerRank, Grownout, Potknox and HackerEarth, which offer referral-related service in the segment.
RippleHire is for employees within an organisation. It uses the concept of ‘Social Referral Games’ to bring in matches.
HackerRank focuses on hiring programmers. They have worked with companies like Facebook, VMWare, Evernote and Yahoo in the hiring process.
PotKnox is a cloud-based skill assessment tool, which provides pre-interviewing screening solutions for recruitment in the IT industry.
And, on HackerEarth, participants have to compete in coding challenges, and they’re then recruited based on their skills. Their website claims to have helped over 1000+ companies, like Adobe, InMobi, Freshdesk, Flipkart and Amazon, recruit.
Taking “Smart Refer” to the next level, the algorithm has been programmed to do not just skill set matching, but also career path mapping. It analyzes the career trajectories of current and ex-employees at a company, and through data mining, finds candidates with potentially similar trajectories.
They plan to open up a web-app, and other native apps beyond their Android and iOS versions. They also want to enhance system security, in order to crack BFSI, and other sensitive sectors.