1. WHITEPAPER
INSOURCING THROUGH SOCIAL REFERRALS
THE NEW WAY OF HIRING
ABSTRACT
It is easy to see why Employee Referral Management Programs
(ERMP) are present in most organizations. The most common way
of incentivizing employees was to offer cash rewards for hired
candidates introduced by employees. While most companies have
an ERMP, primarily attracted by this methodology, but most have
reported problems with long term adoption of the program. This
paper will identify the barriers to widespread adoption and what
can be done to improvise on the ERMP. Research shows getting a
referral are a cheaper and faster way to hire, yield better results
and lower the turnover rate at your company.
ABSTRACT
It is easy to see why Employee Referral Management Programs
(ERMP) are present in most organizations. The most common way
of incentivizing employees was to offer cash rewards for hired
candidates introduced by employees. While most companies have
an ERMP, primarily attracted by this methodology, but most have
reported problems with long term adoption of the program. This
paper will identify the barriers to widespread adoption and what
can be done to improvise on the ERMP. Research shows getting a
referral are a cheaper and faster way to hire, yield better results
and lower the turnover rate at your company.
ABSTRACT
It is easy to see why Employee Referral Management Programs
(ERMP) are present in most organizations. The most common way
of incentivizing employees was to offer cash rewards for hired
candidates introduced by employees. While most companies have
an ERMP, primarily attracted by this methodology, but most have
reported problems with long term adoption of the program. This
paper will identify the barriers to widespread adoption and what
can be done to improvise on the ERMP. Research shows getting a
referral are a cheaper and faster way to hire, yield better results
and lower the turnover rate at your company.
ATUL CHATUR & NIMIT BAVISHI

2. Happy2Refer 2
TRADITIONAL REFERRAL SYSTEM
Defining a referral in the old world is simple; a referral
was a recommendation, and people only referred the
people they knew well and had probably worked with.
This was driven by memory, contact diaries and personal
relationships. Volumes of referred candidates were low,
but conversions were high because employees matched
on skill, experience and knowledge, and were
recommended as a fit in all these areas.
Most of the common employee referral management
programs involve making open jobs visible to employees
and asking them for recommendations from their
network. The process requires the employees to provide
potential candidate details, usually a resume or LinkedIn
profile, and to have gained permission from the candidate
to submit. Successful hires are rewarded with cash
payments, commonly after the completion of the
probationary period. As payments are involved, there is a
due diligence process to qualify for payment.
There are various pros to the referral program including
getting access to high quality candidates with a good fit,
Employee Endorsed skill level and employability,
Employees being accountable for candidate fit, Low cost
of referral hires (even after bonuses), Low conversion
ratio of applied to interviewed and interviewed to hired,
Speed of hire and Opportunity to reward employees.
Some of the cons of this process include generating a low
volume of referral candidates, Administration heavy
systems, long amount of time taken to complete most
referral programs, due diligence of referral rewards and
most importantly asking employees to have the matching
skills of recruiters.
The benefits to referral recruiting are undisputed, with
the pros easily outweighing the cons. However, the low
volumes of referrals means that even the most successful
programs result in no more than 25% of all hires.
It is easy to see why companies place ERMPs at the center
of their recruiting efforts, and that recommendations
from employees provide the most valuable source of hire.
The challenge most companies face is finding new ways
to increase the volume of referred candidates, maintain
the quality of referrals and sustain the flow of referrals
on an on-going basis.
CHALLENGES WITH TRADITIONAL
REFERRAL SYSTEMS
The best referral you are going to get is probably when
the referred candidate is known by the employee and
they have worked together in the past. There is normally
a big emphasis on asking new hires for referrals. The
reason given for this is that new employees are most
forthcoming with names, and usually of former
colleagues. The new employees are also keen to impress,
and motivated by their new employer. Logic also follows
that as this candidate was successful, they know and refer
former colleagues that will likely have a similar skill set
and experience.
1. Uncomfortable approaching friends about Jobs
Employees often feel uncomfortable approaching
their friends about jobs with their employer. They also
feel that it is inappropriate to talk about and discuss
jobs with their friends, given the confidential nature of
careers.
2. Accountability
When an employee makes a recommendation, they
take a risk on their personal reputation. If the referred
candidate is hired, there is the additional risk that the
candidate will not perform, and will always be known
MOST COMMON BARRIERS AND ISSUES
Uncomfortable approaching friends for Jobs
Accountability
Transparency
Not their Job
Manager Buy-In
Time-consuming
Forgetting the ERMP

3. Happy2Refer 3
as their ’recommendation’, particularly given any
rewards they may have been paid.
3. Transparency
Where rewards for referred hires are high, there is a
high level of due diligence. Examples for not paying the
expected rewards are that the candidate was already
known to the company and in the Applicant Tracking
System (ATS), the paperwork was incorrectly
completed or the employee did not upload a resume.
Especially when there are cash rewards involved,
there are plenty of reasons for saying no to a claim.
The sense of injustice proves to be a real killer for
many referral programs. The rules need to be
transparent and designed to reward rather than
penalize. When the system is seen as fair and
reasonable, employees are far more willing to take
part. This, lack of transparency is one of the most
common reasons for failure of old world referral
systems.
4. Not their Job
Whilst an Engineer might know plenty of Engineers,
their main job is working the machines, not recruiting.
The more the Engineers are asked to be recruiters and
exercise judgment over which candidates to submit,
the less confident they are in taking part in the
process. The ‘not my job’ attitude can lead to little buy
in, so why refer? It could also be a result of employees
lacking confidence in making judgment calls, linked to
accountability.
5. Manager Buy-In
Managers need to see the ERMP as being important to
their team, and the most effective way they recruit.
The communication of the ERMP internally often
focuses on the benefit to the company and often
misses out on the benefits to the individual employees
of working with the best people they can, and the part
they can play in it. When time and resources are
invested in getting Manager buy-in, they are far more
willing to include conversations about referrals in
team meetings. Where referral figures are included in
performance reviews, then the ERMP is kept front and
center.
6. Time-consuming
Tied in with rewards are processes, and procedure can
be time consuming when due diligence is a driving
factor. The process behind the ERMP needs to be
simple and quick, enabling employees to contribute
without interfering with the time available to do their
real job. The more time involved in searching,
matching, communicating with potential candidates,
recruiters and admin, employees will be less likely to
continue taking part. A successful ERMP needs to be
admin light and built with the employee in mind.
7. Forgetting the ERMP
Most ERMPs launch with great intentions but after a
few months, employee enthusiasm and participation
wanes. This need not be the case with careful
planning. When structuring an ERMP strategy, you
need to think how you are going to promote the
program and keep it prominent in the thoughts of
employees.

4. Happy2Refer 4
THE SOCIAL PHENOMENON – INSOURCING
VS OUTSOURCING
Over the last few years, social networks have experienced
exponential growth. Employee networks have grown
accordingly, offering access to structured career data
through sites like LinkedIn in particular, and unstructured
data through networks like Facebook. Employees are
continually updating, adding new contacts and growing
personal networks. The more sophisticated Job Posting
tools create unique links for sharing that enable
employers to identify which of their employees originated
the share. This is useful for recognition and reward, whilst
the practice of sharing jobs in the wider network is to be
encouraged in order to reach job seekers who are
browsing or using search engines to identify
opportunities. Job seekers are increasingly connecting
with their peers in organizations they want to work for.
Encouraging employees to share jobs into their networks
offers the potential to reach these connections, but it is
only a chance. A direct message is always going to prove
to be more effective.
A referral is best defined as a personal recommendation
from one person to another. The difference, though,
between an old school referral and a social referral is the
potential depth of the relationship. All networks consist
of an inner and outer circle(s). The inner circle includes
connections where an offline relationship existed based
on work interactions and personal knowledge. The outer
circle(s) consists of those connections that have
connected online through a shared interest, mutual
connections or similar. This offers access to data for
mining and matching and reaches for personal messaging
via an established connection.
When you consider the potential reach offered by the
combined population of all of your employees who are
willing to sign in to a Social Referral Program, it’s easy to
recognize the potential of operating your ERMP around
social connections rather than personal address books, as
in the old world referral. The key here is to enable
employees to weight the referrals they make, giving
priority to those in their inner circle whilst leaving the way
open to search all connections however distant for a skills
and experience match. The use of data mining technology
enables recruiters to identify potential candidates based
on skills and experience of any employee who permits
access by signing up for the ERMP.
It is time companies think about and act on the
outsourcing vs insourcing of recruitment through
social networks. In the past, most recruitment
activities have been outsourced to recruitment
consultants, job boards, agencies, headhunters,
with the least possible emphasis being put on the
most valuable resource that any company has – its
employees. The latent network that employees
now represent, gives the company a chance to tap
into the network for recruitment purposes – both
active and passive recruitment.
THE INSOURCING NETWORK

5. Happy2Refer 5
THE DRIVING FORCE BEHIND SUCCESSFUL
ERMPs
The most common factor of a successful Employee
Referral Management Program is a team of inter-
departmental champions that are outside of the
recruiting/ HR team. The ERMP team should be the ones
who drive the program, design rewards and build a
community of referrers inside and outside of the
organization. The champions should be given the
freedom to design the framework to get the most out of
the ERMP. Most companies designing a new scheme
assume that offering cash is the main driver. More often
than not, the complications associated with cash, from
due diligence to taxation to distributing cash outside an
organization, hinders wide scale adoption. It is better to
let the employees determine their own rewards or even
have shopping cart functionality where they can shop for
rewards based on points awarded through the program.
These can be cumulative or instant. Small rewards and
team rewards often go much further than occasional cash
payments.
The other consideration in this is what to reward. Whilst
most ERMPs reward hires only, is this actually what you
want to be rewarding when there is only a 1:12 (or lower)
chance of success through referrals? The more successful
ERMPs in such cases reward referrals rather than hires.
This can be small recognitions or awards, or gamification,
typically by rewarding each referral with say a lottery
ticket for a big prize such as a motorbike. Getting rewards
right for your employees is important and you should
never underestimate the power of reinforcing the desire
among existing/ current employees to get the best
employees into the company for everyone’s benefit.
It is also critically important that employees can opt-in
and opt-out as they see fit. The technology aided social
referral, with the addition of a ranking feature based on
relationship (inner/outer circle), retains the benefits of
the traditional referral whilst adding targeted reach.
DEVELOPMENT OF SOCIAL REFERRAL AND
MOBILITY
The explosion in the use of smartphones and tablets has
changed the way people do things. People message and
respond in down time between work and personal
commitments, and they expect to be able to interact
instantly. The pervasive use of Mobile Phones
(Smartphones) and Tablets in everyday usage is referred
to as Mobility. In the past, being on a PC was necessary
for online job search and email messaging. This mostly
meant messaging or sending out notifications and waiting
a minimum of 24 hours for some kind of response on most
recruitment activities. People use down times like when
they are commuting, on breaks and whilst watching TV in
the evening to check in with messages, updates and
emails – all this has been enabled by Mobility. They are
on the move and want to be able to access content easily,
viewable on a mobile device. They don't want to need to
navigate from page to page, and they want to be able to
respond instantly. Responding by mobile device means
that candidates are unable to provide extensive
information, needing a one or two click expression of
interest.
The key drivers to success of a Social ERMP:
Easy and convenient participation
Simple, intuitive process
Non-recruiter champions
On-going communications and visibility
Recognition of contribution
Transparent rewards program
Automated matching
Relationship weighting
Candidate experience
Feedback to referrer

6. Happy2Refer 6
This is ideal via social
referral where the
original profile can be
tagged against the
unique URL applied to
the job.
When the target clicks
their interest, the
aggregated profiles
used to match (such as
a LinkedIn profile) can
be imported from the
user profile.
Receiving the message
on a device in your
pocket will incur
response times and
conversions.
Even social media giant
Facebook consider
themselves to be a
mobile, rather than a
social company, and
any ERMP technology
not built for mobile can
be difficult and
cumbersome to use and
hence considered
dated.
Mobile referral
technology, mobile
landing pages, and push
notifications to trigger
referral messaging are
all key for ensuring an
effective mobile
presence.
MOBILE REFERRALS

7. Happy2Refer 7
GAMIFICATION OF RECRUITMENTS
When we speak or think of gamification, we often
imagine Angry Birds and other online games and game
platforms. Gamification, however, can be widely used
into a number of business practices. Awarding points for
referral inputs and outcomes encourage competition
between employees and teams. Online badges
recognize contributions from all employees, and can be
tied in to social status and performance review. The
greater the recognition from management, the more
employees aim to achieve the standard. Competition is
a big driver among colleagues and teams.
Awarding points for activity and outcomes means
employees can accumulate reward points to cash in
against a series of rewards. Adding fun elements to
rewards like spot competitions, bonus points for in
demand roles, and adding games like click the lucky
button or spin the wheel to win extra points or prizes
keeps the attention on the ERMP in a fun way. Plugging
into competition, fun and recognizing referral champions
results in a community feel to the ERMP, particularly
when combined with other employer/culture branding
efforts.
THE ERMP AND ORGANIZATION CULTURE
BRANDING
We tend to automatically think of Referrals as enlisting
the help of employees to share jobs with members of
their network who have the skills to fit the opportunity.
Companies are paying more attention to culture
branding, using social media to provide a window into
their organizations in order to enable potential
candidates to opt-in to connect and follow the company
and opt out if there is no fit. Personal referrals of content
are far more likely to be seen and opened, increasing
appeal and culture brand awareness amongst a network
of people who rank highly on the employability scale.
Employability is based on skills, experience, culture fit,
location and other factors. Content connects people with
organizations, and referred content makes sure that
these are the right people to fill future requirements.
Potential candidates are increasingly looking for more
information on the real values and culture of the
company. This marks the shift from transactional
recruiting on a job by job basis, to relationship based
recruiting, with potential candidates wanting to get to
know an organization before applying. With so much
noise in the social media content in the social channels, it
is easy to lose content and is hard to pinpoint target
audience. Innovative thinking about ERMPs uses the
same data mining, matching and referral technology to
refer content on a one to one basis to targeted
connections.
EVOLUTION OF THE TALENT NETWORK
THROUGH REFERRALS
Recruiting, mostly, has been transaction oriented in the
past. Jobs got posted on static websites, job boards and
printed media. Applicants applied online and went to an
applicant tracking system (ATS), provided information
about their backgrounds, answered routine questions
and uploaded a CV. One or more of the applicants bagged
the job and the most got rejected. Records were retained
for legal reasons, but mostly remained untouched, and
each time there was a new job there was a re-run of all
these activities. Recruiting and applying for a job was win
or lose, pass or fail.
The problem with this methodology is that each time
there was a whole new campaign, and those people who
did not bag the job were split into two categories:
Those who were a good fit with the company culture
and had appropriate skills, but were beaten by a
better applicant on the day.
Those who were a poor culture fit, or unqualified/
inexperienced for the skill set of the roles that the
company offered.
The growth of employer branding content created two
new groups.
Those who were interested in the company as a
possible employer in the future, but were not yet
ready to apply.

8. Happy2Refer 8
Those who were attracted to the company but did
not fit or have an interest in open vacancies.
Potential candidates who fit into the last two groups
mentioned above formed the best collection of people to
source from. They had all shown some form of interest in
the company and could be tempted to apply again when
the timing was right. This marked the development of the
talent network. The talent network organizes connected
people according to their profile, skills, experience and
location in order to send them relevant updates about
jobs, culture, branding and content in the channel of their
choice. From the candidates point of view this keeps them
up to date with relevant information and job
opportunities, and the company gets to keep their talent
pipeline alive in advance of requirements. The evolution
of the talent network brings a new dimension to the
ERMP. Employees can employ the same technology and
methodology to populate the network by creating
profiles for the types of people that would fit with
possible future requirements and asking employees to
send out invites to join the talent network to their social
connections, based on data mining. The talent network
can be populated by adding a one click sign up to all
content and jobs. Joining the network needs to be simple,
with data coming from social profiles such as LinkedIn to
keep messaging relevant. This results in every update
from the ERMP presenting an opportunity to connect
with potential future employees and to start engaging.
The more relevant content and jobs go to the right
targeted audience, improving the culture and employer
brand awareness.
It is possible that as the company talent network grows,
there will be a tipping point where there will be no need
to search outside of this network, and every ’member’
will have a level of relationship with the company.
Referrals present a great opportunity to build the talent
network to this level.
REVERSE REFERRALS
Even though your employees have social networks that
are full of potential employees, the reverse also applies.
Individuals who interested in your company as a potential
employer are connected with your employees. As a
potential candidate, getting referred has real benefits
over applying through traditional methods.
Referred candidates are prioritized for review and
feedback
Referred candidates avoid the ATS at point of entry
Referred candidates come with a degree of
recommendation according to the level of
relationship
Adding a ’Get Referred’ button to jobs, career sites,
content and social places enable interested parties to
see how they are connected with the company in order
to request a referral. This has real benefits to populating
the ERMP because the interaction is driven by requiring
minimal input and time from the candidates and
employees.
INTERNAL REFERRALS
When we talk about referrals, we are usually thinking
about external candidates, but the modern ERMP has a
big part to play in internal mobility.
Internal mobility goes hand in hand with retention and
employer branding. The opportunity for advancement is
one the biggest motivators in joining a new employer.
Sideways moves within an organization are also often
dependent on noticing an opportunity on the intranet or
notice board. Direct approaches by recruiters within the
organization are quite rare, meaning internal moves and
promotions are usually driven by the company. Internal
referrals, where employees can refer jobs to colleagues
and refer them to hiring managers with a
recommendation opens up internal mobility and have a
big impact on the quality of hires.

9. Happy2Refer 9
EXTERNAL REFERRALS
It is easy to think of the ERMP being the domain of
employees current and past, but given the right
marketing and positioning, anyone with an interest in
the business should be able to join and benefit.
People want to help friends and contacts, and if a job is
not of interest to them, why wouldn't they let a friend or
contact know if it has been made easy.
External referral networks benefit from the same
gamification and recognition features as the ERMP,
although you might want to consider different content
and a different user experience. This can be controlled by
filters at entry point on both web, mobile and mobile app
entry. External referrals may want more access to
company information and different rewards. All shared
content should contain a simple invite to join the talent
network and the referral network with one click. The big
consideration here is communicating that you will not
mail any one of their contacts, or scrape or store data.
Trust and transparency is the key factor in gaining access
to a network.
ADOPTION AND IMPLEMENTATION OF
EMERGING TECHNOLOGIES
We believe that our business-technology solution at
Happy2Refer truly represents an innovative and cutting-
edge technology approach to Recruitments through
Referrals.
Our Multi-Degree Referral Hiring Technology Solution
combines elements of Big Data, Artificial Intelligence
(AI) and Natural Language Processing (NLP) to gear an
enterprise towards hiring and engaging with the best
candidates out there.
Our approach has elements that require business process
changes in organizations and hence need buy in and
direction from the CXO-level. While Referrals as a way of
hiring have existed for umpteen years, we endeavor to
use and apply new and cutting-edge technology to an
age-old problem. Because of these reasons, we classify
our approach and implementation as an Emerging
Technology and most adoption and implementation of
Emerging Technologies need a different approach for
ensuring fast adoption and implementation in
Organizations.
Our Approach to Emerging Technologies incorporates the
following elements:
Avoiding the pitfalls of Emerging Technologies
Identification and Assessment of Emerging
Technologies
Emerging Technologies and Public Policy: Lessons
from the Internet
Assessing Future Markets for New Technologies
Disciplined Imagination: Strategy Making in
Uncertain Environments
Scenario Planning for Disruptive Technologies
Appropriating the Gains from Innovation
Managing Dynamic Knowledge Network
Using Alliances to Build Competitive Advantage in
Emerging Technologies
The Design of New Organizational Forms
Designing the Customized Workplace
We have found a number of Organizations that we deal
with are taking a refreshing approach to Referral Hiring.
What we offer is a way to convert this latent potential.

10. Happy2Refer 10
ABOUT ATUL CHATUR
Atul has over 15 years of diverse business experience across various sectors and geographies. He has headed several
global technology initiatives at Infosys Technologies Limited, a leading Indian IT Services provider. He was a Global
Business-Technology Solutions Leader at Infosys and has consulted for Fortune 500 companies in the areas of
Organizational Capability and Management Systems Development. He has worked on several emerging technologies at
leading, global technology firms including RFID technology, Logistics Management Systems and Organizational Capability
Models. Atul has an MBA from INSEAD (France), an MMS from JBIMS, Mumbai and a B.E. (Mech) degree from VJTI,
University of Mumbai.
Get in touch: atul@happy2refer.com | +91-900-466-3010 | LinkedIn
ABOUT NIMIT BAVISHI
Nimit has over 6 years of cross-functional experience from technology to private equity to HR technology. He is the co-
founder of Happy2Refer, a multi-degree referral product and Aglastop, an applicant tracking system. He has worked with
the World Bank Group looking at investments across South and East Asia. Nimit has completed all 3 levels of Chartered
Financial Analyst® (USA) and a B.Tech. (IT) degree from VJTI.
Get in touch: nimit.bavishi@happy2refer.com | +91-992-052-5646 | LinkedIn
ABOUT HAPPY2REFER (www.happy2refer.com)
Happy2Refer is revolutionizing the employee referral system by enabling multi- degree referrals to help companies reach
out to their employees’ extended networks to hire.
Happy2Refer's mission is to change the way hiring works leveraging mobile, social and network-based hiring.
Friends of the Firm Network: Amplify hiring reach
by 100x using employees expanded networks
Engage Non-Employees: Reward and engage non-
employees, turn them into your loyal referrers
Intelligence: Leverage Intelligent algorithms that
automate, filter and reach right-fit candidates
through referrals
Automation: Automate and measure 360-degree
ROI
Quality Passive Talent Pool: Build a diverse quality
passive talent pool drawn from multiple networks
Hiring ROI: Improve your hiring ROI by 4x