When 26-year-old Madhav Banerjee recently decided to shift from Mumbai to Delhi, he was looking at more than a job change; he also wanted to move out of his industry. Six months ago, Banerjee, a 2011 graduate from Chetana’s Institute of Management & Research, had landed a job with Sharp Business Systems, the Indian arm of Japanese consumer electronics major Sharp, in Mumbai. He was now keen to join the research and analytics sector. The only problem was finding the right job. Then, while on Facebook, he stumbled upon Round One, an online service that helps job seekers get referrals. “I registered and was lucky enough to find a job in Noida,” says Banerjee, who now works at Gyan Research and Analytics.
Round One is a job referral site started in April 2011 by Nishant Mathur, an MBA from Insead who had previously worked with Accenture in Atlanta, Delhi and Mumbai. Mathur says he was inspired to start the site from his own experience of referring someone he knew. “A couple of years ago, I met a friend who had moved back from the US. She was looking for a job with Accenture and was more than qualified to get it. However, even after a month after applying through job portals and the company’s website, she did not hear back from them. I then connected her to a former colleague and after he referred my friend, she got an interview call within two weeks.”
This helped Mathur realise the value of networking and personal recommendations. “Currently, networking is serendipitous — based on who your family friends are or who you met at a party last weekend. There is no simple, transparent, quick and effective way to earn people’s recommendations or even to network with them,” says Mathur, who started Round One with ₹15 lakh of his own money.
This is how Round One’s model works. A job seeker sends a referral request to an employee of a company he’s interested in. If the request is accepted, he pays a fee and speaks to the employee over the phone. If the employee is satisfied with the job seeker’s credentials, the employee refers the candidate to the HR department. Referrers generally accept to speak with about a third of the profiles that are sent to them; a job seeker is allowed to connect with the referrer over the phone only after that. Since the referrer would already have screened the job seeker’s profile by the time they talk, 80% of the job seekers are referred after the conversation. In case they are not referred, their fee is refunded.
Mathur says a recommendation increases an employee’s chances of getting hired by as much as 10 times. “Based on anecdotal evidence from our system, I believe that is in line with our platform as well,” says Mathur. Employee referral programs are fast gaining ground across India Inc and many organisations reward referrers with up to two weeks’ pay upon a successful hire. Mathur cites a 2010 report by CareerBuilder, which says 69% of organisations have a formal employee referral program. “In India, this would be slightly lower, but not very different. Almost all large companies have such programs, and the smaller ones that don’t, still encourage employees to make referrals,” he says.
To sweeten the deal further, Round One also gives referees Round One points, which Mathur likens to frequent flier miles. “They are given 500 points worth ₹100 for each person they speak to. They can be donated to charity or can be encashed in return for vouchers such as Sodexo.”
To make sure the employee is serious about referrals, Round One does background checks using a proprietary method involving both online and offline sources. Employees have to fill a feedback form after every interview giving their decision about the referral, which is shared with the job seeker as well. “We believe in transparency between the job seeker and the employee,” says Mathur. “We share all the details of the employees, so the job seeker can choose the right person for referral.”
According to Mathur, Round One has over 12,000 referrers from 2,000 companies, and 400,000 job seekers registered with its service. They are mostly from the IT, banking, KPO and consultancy sectors. Round One’s customers are typically 20-35 years old, and from tier 1 or 2 cities. “The concept usually appeals more to those with a clear sense of the location or industry they want to be in.”
On a roll
Round One’s primary method of marketing so far has been social media, especially LinkedIn. In the past couple of months, the company has started search engine optimisation marketing as well. Round One earns its revenue from the one-time registration fee of ₹100 and the additional fees (from ₹ 500 to ₹ 900, depending on how experienced the job seeker is) job seekers pay to interact with referrers. About 30-50% job seekers apply for more than one referral, which helps boost the company’s income. Round One broke even in June 2012 and currently earns about ₹8 lakh every month.
Mathur says revenues have been growing at 25% every month. “I see three areas for scaling up — service, business and geography,” he says. “The simplest one is geography.” He wants to go global now, and the first stop will be the US, where he plans to launch the service in June. “We are looking at South East Asia, England, South Africa and Australia — mostly English-speaking countries,” he says. He’s looking to grow his team and is also now in talks with angel investors and VC firms for funding.
While so far, the job seeker has been paying for interactions, Round One is also exploring a model where it can get companies to sponsor interactions. “Companies benefit from referrals as well, so we thought we will ask them to sponsor interactions,” says Mathur. “We are also in talks with educational institutions, who can sponsor interviews on the site for campus recruitment.”
Round One is also looking at expanding the scope of its services by adding a networking platform. Sometime in the future, Mathur wants to expand the model to connect other parties in a similar fashion. “We could connect students and universities,” says Mathur. “This would be networking beyond recruitment and networking beyond your network. We will launch this by the end of next year.”
Globally, companies like employeebuddy, referralrecruitment, jobprize and wisestep operate in the same space. Naturally, Mathur contends that their models are different from his. “These companies are merely a bulletin board of open positions for job seekers, and a résumé databank for employees. They do not have a system for interactions, which is the secret sauce in the recipe. While the end result might be similar [a referral], the services offered by those companies are completely different.”
But not all HR managers have warmed up to the idea. While Sulbha Kaushal Rai, HR manager at Ernst & Young agrees that the model is good, she adds that E&Y already has a robust employee referral program, which contributes to 55% of its hiring needs. “Since we are into professional services, most of our employees are chartered accountants (CAs) and MBAs,” says Rai. “CAs are a very close knit group. People know each other, so we have never had a shortage of referrals.” For others, though, this may well be the new, smart way to addressing their talent woes.