M&A

IBM India has instituted an internal referral hiring program known as "Project Cheetah" which offers cash incentives and items such as televisions and iPods to employees who make the most successful referrals for new positions at IBM.

The company, which has more employees in India than in any other country outside the United States, hopes the program will speed up hiring for the more than 15,000 new jobs available at its India offices during 2007.

Foreign technology and consulting firms in India, including Accenture and Capgemini, generally spend around 4 percent of wages on referral schemes. In addition, many firms in India, domestic and foreign, are launching internal hiring programs to announce jobs on internal company intranet sites before they are made available to the general public.

EXL Service, India's leading offshore business process outsourcing firm, says 70 percent of its leadership positions are now filled through internal hiring and promotions. Foreign investment enterprises are following suit including AMEX India which says more than two thirds of its management positions are filled through internal hiring, while Ericsson India recorded 10 percent overall internal mobility duing 2006.

In addition to its cost effectiveness, internal hiring often increases retention, says Girish Johar, vice president of people and culture for Ericsson India. Internal mobility gives employees an opportunity to hone skills to develop their career, it helps in broadening their range of competencies, it helps improve their motivation and it is a quicker learning curve, Johar says. Employees who see opportunities for internal advancement are likely to stay longer with a single company, he says.