June 30, 2008

Salary Survey – 2008

Filed under: Compensation Surveys — Tags: , , , — hrcases @ 5:34 pm

The HR function is a critical element for growth of any company. It has become strategic, because capital is now an easily available commodity, but people are not. So, the only constraint to growth is people. And that is a not a new problem for the Indian Industry. Emmay HR and BW have conducted this year’s Salary Survey, comprehensively by covering costs, compensation and benefits across 12 sectors.

Though HR has moved up the value chain, there is still conflict with other functions such as finance and marketing on the importance given to it.

The rising importance of HR was first noticed when key professionals were hired or shifted to the function. Many top companies today have HR heads that are top performers and are not necessarily from within the HR function. And it’s happening in the opposite direction as well, with HR heads also moving into business roles in progressive companies.

S.V. Krishnan, who headed Satyam Computers’ largest business unit, was chosen to lead Satyam’s HR function in 2007. He replaced Hari T, who moved on to a strategic role as head of marketing.

This changing role of HR in Indian companies has led to a recalibration of budgetary planning. Planning an HR budget? It is a complex job, as there are several new components to it. That level of involvement has come about because an HR budget today has to factor in components such as recruitment costs, retention costs, alternative compensation plans, and employer branding initiatives.

Recruitment costs have gone up immensely. Today, it’s about hiring the right recruitment agency. The cost of hiring such agencies includes a retainer fee and 30 per cent of the new employee’s annual salary. A new component in HR budgets is training cost. Expanding companies are hiring entry-level employees from other sectors. These employees need training before they can be deployed.

The need for training has been driven upon companies due to soaring levels of attrition. Sectors such as IT and BPO have traditionally witnessed 25-35 per cent attrition rate.

Nowadays companies also have to invest in employer branding to help attract and retain employees. Wooing employees through offline and mainline media advertising is a new challenge for HR heads in other sectors.


The job market has imposed discipline on companies in terms of planning HR budgets. It has forced them to plan long-term to reduce regular and rising training expenses. Most companies today have in in-house training facilities. The growing companies have realized that they not only need to attract and recruit good talent, but simultaneously build a social architecture that allows these employees to achieve their goals within the company. This seems impossible without a strong HR function and the top management’s involvement.


Infosys HR boss takes fattest salary

IT giant Infosys’s human resources head T V Mohandas Pai takes home the highest salary and bonus among all the Board of Directors of the company, including Chairperson Nandan M Nilekani and Chief Executive Officer S Gopalakrishnan.

According to Infosys, Pai receives a salary of 82,033 dollars and a bonus of 3,08,625 dollars in a year.

The Chief Mentor of the firm is N R Narayana Murthy while the director is Nandan M Nilekani.

While Nilekani receives 51,414 dollars salary and 1,22,841 dollar as bonus, Narayana Murthy does not take home any of them but 1,25,000 dollars in annual compensation.

T V Mohandas Pai, is also the Head of Administration, Education and Research, Finacle and Infosys Leadership Institute.

June 28, 2008

Learning Culture

Organizations today foster a learning culture to achieve the highest business value. But do we really understand what culture is, and what exactly a learning culture is. How does one know if your company has such a culture? And perhaps most importantly, how can you create one?

Learning Organizations are those which provide learning and training resulting in good performances by its employees. The learning programs made use of, by the organizations, help develop a competitive advantage.

In order to create a true learning culture, learning organizations must give equal focus to learning that helps the company grow, adapt to change, cultivate employee talent, innovate and develop strong customer relationships.

The learning solutions adopted by organizations take many forms. Some programs used are leadership development programs, end-to-end sales training programs, as well as corporate-wide quality and process-improvement programs.

These solutions are mostly integrated with career development models and performance management in order to succeed. These programs take years to build and mature, demanding long-term investments. These initiatives usually have long term results and intangible benefits, such as employee satisfaction and engagement, innovation and customer loyalty.

The hallmark of any learning culture is an equal focus on both performance- and talent-driven learning. Learning cultures recognize the need for performance support and improvement, but also embrace individual and organizational learning as a component of business strategy.

In reality, a learning culture is built through a rejuvenation of business processes which are driven by the top management all the way down to the grassroots of the organization.

Interviews : Do’s and Don’ts

A successful job interview is an important step towards fulfillment of a candidate’s aspirations and ambitions.

The main objective of any candidate is to convince the interviewer that he/ she can successfully do the job and become a desirable part of the organization.

Common guidelines for the candidate / aspirant –

Preparing well for the interview.
Dressing professionally.
Arriving early.
Being prepared to ask at least two questions.
Knowing exactly what you want to do.
Knowing about the organization and the field in which it operates, how the organization is structured, its major activities, and its plans for the future.
Knowing specifically what you have to do for the organization.

Commonly asked Questions –

Tell me about yourself.
What are your long-term (10 years from hence) / short-term (5 years from hence) goals?
What are your strongest/weakest personal qualities?
Why do you think you would be successful / suitable for this job?
Why do you want to work for us?
Why should we hire you?
What positions have you held in the past?
Do you prefer working alone or in teams?

Behavioral Interviews –

Interviewers a lot of times expect specific examples of situations when you were faced with different types of occurrences. This type of interview is called Behavior-Based. They try and gauge the candidates’ problem solving skills.

Must do for candidates during Behavioral Interviews-

Listen carefully for what is being asked.
Put your example in a descriptive manner.
Always end on a positive note.

Interviewer’s evaluation on negative traits
Poor personal appearance
Lack of planning / insights for career
Lack of confidence / poise
Failure to look the interviewer in the eye
Limp handshake
Lack of tact, maturity, and courtesy
Failure to appreciate the value of experience
Overemphasis on compensation / remuneration
Making excuses for unfavorable events in work history
Condemnation of past employers

Tips for the First Interview –

Time is limited. Try and highlight all important points.
Remain clam, patient, reasonable, and gracious.
Minimize time on nonproductive questions and answers.
Listen actively and carefully.
Express your enthusiasm for working with the organization – always works!
Thank the interviewer for an interesting, informative interview.
Write down the names of the people you met and any other information you learned.

Inappropriate interview questions –

Some interviewers just are not professional and end up questioning on a lot of personal areas and inappropriate issues. Only the candidate can decide if he / she wants to answer the question asked – or walk out.

Personal Questions

Questions about Your Spouse/Boyfriend/Girlfriend
Questions about Children
Questions about Your Relationships
Questions Regarding Values and Sexual Mores
Questions Regarding Your Age
Comments Indicating Tokenism

Common questions asked before ending the Interview process –

What compensation package do you have in mind for this position?
Would you please give me some information about your benefits program?
When do you expect to make a final decision on closing this position?
When can I expect to hear from you?

June 27, 2008

Human Capital Measurement

Management of Human Capital has become one of the key HR objectives for many organizations.

What is Human Capital Management?

The term ‘Human Capital’ means – “the knowledge, skills, competencies and other attributes embodied in individuals or groups of individuals acquired during their life and used to produce goods, services or ideas in market circumstances”

It can be summed up in a formula devised by Consultant, Thomas Davenport:

Ability, knowledge, skill, talent + behavior x effort x time = quality of labor (human capital)

Human capital management involves getting the right people, with the right skills, in the right position, at the right time, rewarding them with the right incentives to perform the right function in the right environment, to most effectively perform the work of the organization.

Human Capital and Profitability

Watson Wyatt undertakes a study of the link between HC practices and competitiveness and performance. The Watson Wyatt HCI is an index from 0 to 100 awarded to surveyed company, based on the responses to a wide range of questions about the organization’s human resource management practices, including pay, people development, and communications and staffing.

The research shows that five key HC practice dimensions are associated with a 90% increase in shareholder value:

• Clear Rewards and Accountability

• Excellence in Recruitment and Retention

• A Collegial, Flexible Workplace

• Communications Integrity

• Prudent Use of Resources

Importance of Recruitment and Measurement

Effective recruitment has a positive impact on a company’s management of human capital. A study by Bernthal and Wellis showed that the cost of replacing an employee ranges from 29 to 46 percent of the person’s annual salary.

Despite its importance in HC calculations when it comes to measurement, Recruitment is one of the factors a company shies away from measuring.

Why are Companies not Measuring Recruitment Effectiveness (Quality of Hire)?

Recruitment has always been a poorly measured metric, with very few companies even recording the source of the candidates to recruitment campaigns, let alone the quality of those hires.

The reasons for this fall into 4 groups:

• No tradition of measurement

• Difficulty of measurement

• Lack of pressure from senior management

• The importance of measuring quality is underestimated


• Surveying Line Management

• •Performance Reviews

• Productivity

• Turnover

• Screening and Assessment Tools


Business performance and recruitment excellence are inter-linked. Most of the companies have been slow to measure Quality of Hire.

The good news is that in reality Quality of Hire can, with a little planning and determination, be easily measured, and it should soon start moving up the HR agenda.

June 26, 2008

Different perspectives on Recruitments

In the current scenario, recruitment is becoming even more critical as there is dearth of highly skilled workforce around. The best organizations succeed not because of their people, but, because they have the right people. Skill, knowledge and attitude—in one word competencies—in the workforce are a critical input for success of an organization.

Recruitment has today shifted focus from contractual employment obligation to skill and ability-based hiring. Present day organizations understand the strong links between attitude and performance of employees. Investing in human capital is the most desirable business strategy as only a talented workforce can give the company, a competitive advantage.

Competency-based recruitment is in buzz. The onus on human resource managers is significant and their method of recruiting the right candidates has a critical bearing on the quality of workforce.

Behavioral interview techniques are most common nowadays. The principles and techniques of behavioral observations can be effectively converted into the interviewing process. These interviews try to gauge the motivational and attitudinal inclinations of an individual.

Competencies focus on the key behaviors that are expected out of an employee for effective performance in a particular role. These behaviors are consistently demonstrated by good performers on the job. Competencies differ from skills and knowledge. They include only behaviors.

The building blocks for high performing companies are—recruiting right and retaining the recruited talent. Productivity and profitability of the business enterprise is best served by recruiting right at the very beginning.

Traditional interview methods are not equipped to identify talented employees. The traditional interviewing method which focuses more on resume, references and past experience fail to capture the complexity of identifying the right candidate for the right job. Such interviews focus on knowledge and skill while behavioral interview lays stress on behavioral aspects.

Competency-based recruitment through behavioral interviews focuses more on the right fit between the organizations and the individual. Whenever the organizational and individual fitment is right, it results in outstanding performance and job satisfaction.

David Cohen in his book, The Talent Edge, explains how behavior and behavioral tendencies function in the complex personality of an individual.

An onion is easy to peel on the surface, but it has many layers. The top layer represents the person’s skill and knowledge. This particular layer is changeable depending on circumstances and conditions. It has very little impact on the future performance of the individual. At a slightly deeper layer, but still close to the surface, are the ‘can do’ factors that indicate the person’s background and experience. Interviewers need to make more direct enquiries to reach this level of observation, though this level does not adequately reveal how the candidate will apply his or her experiences on the job. At the core of the onion, are the ‘will do’ factors that drive the actual behavior. ‘Will do’ factors are stable and tell the interviewer the extent to which individuals will use their knowledge and skills on the job and how they will do so. ‘Will do’ factors are what people mean when they refer to behaviors or behavioral competencies. Whether the person will actually exhibit a behavior is not so much a function of ability as it is of motives and values.

The goal of any kind of interview is to understand the candidate’s abilities and skills and forecast his likely behavior on the job. Behavioral interviewing uses ‘competencies’ to analyze behavioral qualities. Competency is any skill, knowledge or other attribute that is observable and leads to excellent performance in a particular work context. It differentiates the star performer from the average performer.

A behavioral competency is intrinsic to a person. It is transferable in nature, meaning that competency exhibited in one circumstance is likely to be exhibited in other similar circumstances as well. In today’s highly competitive business environment, the psychological pressure to perform well is considerably high. For those facing the challenge of hiring, finding the right fit between the organization, the job, and the candidate’s skills and behaviors is the key to hiring right.

A competency-based approach offers several benefits to an organization. The vision and mission of the organization becomes effective. It helps in creating empowerment, accountability and alignment of coach, team member, and employer in performance development.

The approach has two fold effects. For managers, it helps identify performance criteria to improve the accuracy of recruiting process. For employees, it help in identifying behavior standards of performance excellence required to be successful in their role.

Tools for curbing attrition

Filed under: Attrition, Latest Trends in HR, Retention — Tags: , , — hrcases @ 9:04 am

In today’s scenario, Organizations’ worldwide are making all attempts to minimize attritions. There are a lot of retention strategies that can be used to curb attrition.

Some of them are listed out here. –

Compensation should be attractive

Fair compensation does to a large extent guarantee employee satisfaction and loyalty.
For e.g., a process at FedEx, called the Pay Exception allows managers to recommend and give exceptional pay hikes to the performing employees.

Quality benefits should be provided

Benefits are not a key reason why employees stick with a company, but they do help in uplifting their morale to some extent.

– Performance based quarterly incentives

– Insurance Scheme & Personal Health Care

– Corporate Credit Cards

– Cellular Phone / Laptop & latest technology on-board

– Interest free loans for higher educations

– Flexi-timings / Telecommuting

– Flexible Salary Benefits

– Wedding Day & Birthday Gift

Train the frontline managers

To make sure that the managers aren’t driving away the technologists, the organizations should invest in human capital irrespective of ROI.
For e.g., In Whirlpool Appliances, there are highly selective leadership development mentor programs.

Detail employees on their roles.

Make sure that the employees know what is expected of them. They should be given enough time to settle down in the system before they start performing.

Opportunities to grow and progress.

A clear professional development plan gives employees the professional boost to go on. The career path of every employee in the organization should be well laid out.

Offering retention bonus

Employee longevity is well rewarded in most of the organizations. They could be offered other seniority-based rewards such as a paid membership in the employee’s professional association after one year, a paid membership to a local gymnasium and clubs after two years, and full reimbursement for the cost of the employee’s formal dress.

Employee engagement practices.

To check the pulse of your organization, conduct employee satisfaction surveys on a regular basis. Go in for its analysis and implementation.

– Capture Voice of Employees

– Value addition (Attitude, Skills, Knowledge, Practices & Trust)

– Stay Interviews & its implementation

Cross functional teams

It takes efforts to build an effective team, but the result is greater productivity, better use of resources, improved customer service and increased morale.

For e.g., Sapient Corporation has a practice known as “Team Storming”. When a project team or an internal team has worked very hard, teams from across the office get together and storm the team with a ‘goodies’ basket to recognize the team.

Fun@work initiatives.

Organizations should celebrate successes and recognize their employees when milestones are reached. Buffet lunches, birthday parties, and employee picnics will help remind people why an organization is a great place to work.

Job enrichment.

Identify your employees’ talents and then encourage them to stretch their capabilities into new areas. Every employee should have a Mentor assigned.


Management should always keep their employees well informed of every happening.

– Communication creates the right kind of environment

– The employees should know how business is carried out

– They should be aware of all the issues

Encouraging higher learning.

Create opportunities for your key performers and technologists to grow and learn. Encourage every employee to learn at least one new thing every week, and you’ll create a Work force that is excited, motivated and committed.


Employees will be loyal to organizations that make their lives more convenient by offering on-site childcare centers, on-site hair styling and dry cleaning, flexible work hours, part-time positions, job-sharing or involving spouses in CSR activities and promoting ownership culture.

Effective induction program.

Every Organization should have a formal orientation program and include a thorough overview of all the departments.

Value your employees.

Recognize outstanding achievers publicly. Make sure that none of the chances to reward or recognize employees is missed out.

June 25, 2008

Training Freshers at Infosys

Infosys – The Organization

In 1981, a small team led by NR Narayana Murthy and his wife, started ‘Data Basics Corp’ a small time on-site software developer company. The company was later renamed as Infosys.

During its initial years, Infosys struggled to get projects due to lack of reputation, inadequate infrastructure, and government regulations. But the determination of the promoters and their full involvement got them their first order which they completed successfully in time.

Exports increased over time and Infosys set up a Software development center in Bangalore, India. In 1987, it established its first international office in California, US. In 1988, Infosys bagged its first major order from the Reebok and in 1989 bagged another major order from Digital Equipments based in the US. The year 1991 was a significant year in the history of Indian business. In the Union Budget that import tariffs were reduced, taxes were rationalized, and exports were encouraged. Other reforms introduced were free-market pricing of Initial Public Offering (IPO) and relaxation in restrictions on foreign exchange, etc.

In 1993, Infosys successfully completed its IPO. By 1995, Infosys had become the fifth largest software exporter in India. In 1996, it set up its office in UK and then in Canada in 1997.In 1999, Infosys achieved annual revenues of US$100 mn. In the same year it earned the highest level of certification, CMM Level 5, conferred to only a few companies in the world.

It was the first Indian company to be listed on NASDAQ in 1999. In 2001 and 2002 it was rated as the ‘Best Employer in India’ and ‘India’s most respected company’ by leading Indian business magazines. In 2006, Infosys Technologies Limited was one of India’s biggest IT companies and provided IT services, solutions, and consultation globally. By the year 2006 it had over 49,000 employees worldwide.

Entering Infosys

By 2006, there were close to 50,000 Infoscions (employees of Infosys). Getting a job at Infosys was tough as it admitted only 1% of applicants. Out of the total number of applicants, Infosys short-listed only top 20% of students from premier colleges, universities, and institutes.

Infosys in its history had hired many people from different engineering fields who exhibited a high aptitude for ‘learn-ability’ and preferred them over those computer engineers who could not solve problems beyond their technical training.

The short listed candidates underwent a rigorous selection procedure, which involved a series of aptitude tests and interviews. The aptitude tests were significantly tougher and very few candidates cleared them.

The successful candidates were invited for a personal interview. Candidates were judged mainly on their analytical abilities, learn-ability, and communication skills. The selected few candidates were then given job offers.

Need for Training

The dynamic nature of the software and IT industry requires its workforce to upgrade frequently in technology and skills. Companies were focusing on continuous training and development of their employees, which also helped in the reduction of attrition rate.

At Infosys, every new recruit underwent approximately three months of training before they were made billable to clients.

The American Society for Training and Development (ASTD) rated Infosys as the world’s best in employee training and development and conferred ‘Excellence in Practice Award continuously for three consecutive years 2002, 2003 and 2004. The award was conferred for its ‘Global Business Foundation School.’ It was a program for all fresh engineering entrants to Infosys to equip them for the challenging software career ahead of them. The program ran around the year and was implemented over several global centers across the organization.

The Global Business Foundation School comprised of generic conceptual courses, platform specific courses, mini projects for application, and an end term project tailored from real life projects. In addition to technical courses, fresh entrants were also exposed to courses on communication skills, interpersonal skills, customer interaction etiquettes, management development, and quality systems.

In 2005 Infosys established ‘Infosys U’, one of the largest corporate training centers in the world.

Infosys U

The ‘Global Education Center’ was set up in 2005. It was one of the biggest corporate training centers in the world. The Global Education Center would run a 14.5 week residential program, which would impart generic and work specific training in technology areas, along with soft skills and leadership programs to freshers.

The center had 2,350 rooms spread across the campus, 58 training rooms, 183 faculty rooms, state-of-the-art library and a cyber cafe. The center had the capacity to train around 15,000 freshers in one year.

The Training Program

After the new recruits joined Infosys, they were taken to Infosys U for a 14.5 week training program. At Infosys U, the freshers were welcomed in Infosys by NR Narayana Murthy through an audio visual presentation. The initial days of the training program, freshers filled forms and learned the values that drove Infosys. During the entire training program, new recruits were trained to work or program different tech applications.

The library had an online database of Infosys case studies to help the recruits. The trainers generally imparted training in hard skills through lectures on the concepts and theory for a few hours and then allowed the recruits to work independently and build their own applications for the rest of the day.

While the training program focused mainly on technical skills, the freshers were also trained in soft skills. There were separate rooms and faculties for soft skill training. Training was imparted on global etiquette, comportment, importance of body language, public speaking, improving interpersonal communication and team-building. The various methods used included, asking the freshers to perform skits, going through several ‘what-if’ scenarios and to practice smiling in front of the mirror.

The campus provided best of food to at an affordable price. Among other options, the campus had the retail outlet of the pizza chain ‘Domino’s Pizza’ where both Western and Indian varieties of pizzas were available. The pizza could also be ordered while the employee was working, but the Infosys culture discouraged working during lunch. The Infoscions believed in taking break during lunch and socializing.

The center had an ‘Employee Care Center’ to facilitate all round development. The employee care center offered recreational facilities such as a gymnasium, a swimming pool, Jacuzzi, bowling alley and a meditation hall. It also had an international-class cricket ground and a multipurpose ground with a six-lane synthetic track, which housed basketball, volleyball, squash, and tennis courts. The campus also housed an auditorium, which had a seating capacity of 1,300 people and three multiplex theatres with a capacity of 150 seats each. The freshers had to work for eight hours every day and at the end of the training program, the freshers had to pass two comprehensive exams before proceeding further. About 1% to 2% failed in the exams.

Infosys U also served as the opportunity to interact with Infoscions working in countries other than India. In 2006, Infosys U had the capacity to train over 4,000 freshers at a time and had expansion plans of increasing the capacity to 10,000 by 2007.


Infosys is amongst the few companies, which actually practiced what it preached.

June 24, 2008

IT Companies – Recruitment methods

Filed under: Innovation, IT, Latest Trends in HR, Recruitment, Technology — Tags: , , — hrcases @ 4:33 pm

Today, the biggest challenge faced by any organization is change. Globalization has made it even more imminent. Organizations are trying their level best to cope with the transition by hiring the right person for the right job. Human Resource teams are working hard to recruit the most talented from the pool available to them. Organizations are developing strategies to recruit, develop and retain their talented employees.

With the advent of the IT, ITES and BPO industries, employment opportunities have widened. So companies are facing challenges in recruiting candidates who are fit for the job as well the organization. Recruitment practices and mechanisms have undergone major changes. Soaring attrition rates have forced the software companies to adopt variety of recruitment practices. To attract the candidates, they have started exploring innovative methods of recruitment. Their ultimate aim is to bring in quality new employees.

Most of the IT companies are on a look-out for Engineering Graduates. Companies visit a lot of Colleges for Campus Hiring’s every year. Companies aim at hiring committed, intelligent and aspiring students full of enthusiasm and zeal to prove their talents.

Earlier Campus recruitment was mostly used as a process only for Management Courses, but over time this trend has changed. Few companies, for e.g., TCS follow a process of accrediting the colleges. They conduct interactive session with the faculties and the students separately to assess their capabilities. Based on these assessments they give accreditation to the colleges – A, B or C grade. Few other companies assess the college by collecting a detailed report. They select only those students, who possess the necessary skill set. As fresher’s, with no prior work experience, they are trained extensively. A full length Induction program grooms them with respect to Organizational fitment.

The recruitment practices of IT companies changes from time to time. The various methodologies used are On Campus, Press Advertisement, Headhunters, Job Fairs, Electronic Recruitment and Recruiting Abroad, Executive search firms and Application tracking software. The latest methodology in the series is organizing job fairs in various IT destinations and online recruitments.

Companies list the job openings on their own websites inviting prospective candidates to apply. In addition to the company’s website, the employers also look for the candidate’s profile posted on various Job portals viz., Naukri, Times jobs, Monster etc.

Hence, change is omnipresent in the IT scenario.

Cisco – Innovative Recruitment methods

In 1995, Cisco, found that despite hiring an average of 1,000 people every three months during the year, the company still had hundreds of openings. The recruitment pressure further increased the following year, when Cisco hired more than 1,000 employees every quarter. When Cisco’s sales soared, the company planned to double its workforce.

The management realized that it had to adopt innovative recruitment practices to bring in the best people. They adopted the first of its kind online recruitment called the ‘Friends program’. Cisco recruiters also began to target passive job seekers. These were the people who were content and successful in their existing jobs.


Cisco was founded in 1984 by a group of computer scientists at Stanford, who designed operating software called IOS (Internet Operating System).

In 1985, the company started a customer support site from where customers could download software. In 1990, Cisco installed a bug report database in its site. The database contained information about potential software problems to help customers and developers.

By 1991, Cisco’s support center was receiving around 3,000 calls a month which increased to 12,000 by 1992. In 1993, Cisco installed an Internet-based system for large multinational corporate customers. In 1994, Cisco launched Cisco Information Online, a public website which offered company and product information. By 1995, it introduced applications for selling products or services on its website. This was done mainly to transfer paper, fax, e-mails and CD-ROM distribution of technical documentations and training materials to the web to save time for employees, customers and trading partners, besides broadening Cisco’s market reach.

In 1996, the company introduced a new Internet initiative, ‘Networked Strategy’ to leverage its enterprise network to foster interactive relationships with prospective customers, partners, suppliers and employees. In early 2000, Cisco introduced the Integrated Commerce Solution (ICS), which provided a dedicated server fully integrated into the customers’ or resellers’ intranet and back-end ERP systems.

In mid-2000, Cisco entered into a distribution agreement with FedEx to manage orders and maintain inventory levels in a cost-effective way. ‘The Cisco City’ in San Jose, emerged as one of the biggest Internet economy industrial parks with around 13,000 employees.

Cisco believed it required the best people in the industry to remain the Leader.


The company followed a policy of hiring ‘top 10-15%’ people in the networking industry. This was a mechanism to remain the industry leader.

Its vision statement was, “Attracting, growing and retaining great talent is critical to sustaining Cisco’s competitive advantage.”

The company began to use newer techniques like the ‘build-the-buzz’ strategy, which was centered on the primary market for its products, i.e., the Internet.

Cisco’s recruiting team identified the candidates whom they felt the company ‘should hire,’ and then figured out the way those potential candidates did their job hunting and designed hiring processes to attract them to the company. The recruiters targeted even passive job seekers–people who were happy and successful in their current jobs.

Cisco changed the way it wanted advertisements in newspapers. It listed specific job openings and featured its Internet address in its ads and invited prospective candidates to apply. This helped in directing all job seekers to its website where it could inexpensively post hundreds of openings and provides information regarding them.

Since most people visited Cisco’s website from their jobs, the company could identify their place of work. The company attracted happily employed people through focus groups. These focus groups targeted senior engineers and marketing professionals in other companies and found out how they spent their free time. These insights helped the recruiters.

The website also offered features through which applicants could fill their resumes online or create one with the help of Cisco’s resume builder.

The focus group’s exercise ensured that a candidate would approach the company if he had been informed by a friend about better opportunities at Cisco. This led to the launch of the friends program in April 1996. Cisco also organized art fairs, beer festivals and certain annual events in which people from Silicon Valley participated. These places proved to be very ‘fruitful hunting venues’ as they attracted young achievers from various successful infotech companies. Cisco recruiters mingled with the crowd, collected business cards from prospective candidates and spoke to them informally about their careers.

More than 1,000 Cisco employees volunteered for the Friends program, attracted by the referral fee, which started at $500 and a lottery ticket for a free trip to Hawaii for each prospect they befriended and who was ultimately hired.

In this program, Cisco employees were matched up with people who approached the company as prospects and who shared similar backgrounds and skills. The Cisco employees then called the prospects to inform them in their own words about life at the company.

Cisco also found that applicants and recruiters were not totally comfortable with, the time-consuming recruiting process. To speed up the process, Cisco hired in house headhunters to identify qualified candidates for managers.

It encouraged internal referrals for recruitment through a program called ‘Amazing People.’ This facilitated the employees to refer their friends’ and acquaintances for positions within Cisco. Employees earned a referral bonus if the company hired the person they referred. After streamlining its recruitment policies in 1996, Cisco conducted an Employee survey to find out how the new recruits felt on their first day at work.

This exercise stemmed from the company’s belief that new employees typically treated the first day as ‘the most important eight hours in the world.’ Cisco launched Fast Start, an employee orientation initiative. It installed software, which tracked the hiring process and alerted the team about the new recruit’s arrival. As a result, every new recruit started with a fully functional workspace and a whole day of training in desktop tools.

Fast Start not only eliminated all problems but it also enabled new recruits to know about ‘life inside the company.’ Every new recruit was assigned a ‘buddy’ who clarified all doubts and answered questions about Cisco. New recruits also had a two-day course called the ‘Cisco Business Essentials,’ which covered company’s history and business units. The managers of the new recruits received an automatically generated e-mail two weeks after their new recruit arrival. It reminded them to review their departmental initiatives and personal goals.

Reaping the Benefits

Cisco believed that its new recruitment philosophy should also be made a part of the overall corporate culture. Cisco’s job site was recording around 500,000 hits per month. The company generated a stream of reports about who visited the site. Cisco’s hiring cycle also came down to 45 days. The recruitment costs were also below the industry average. Referral rates at Cisco were twice the industry norm. The retention rate of the Company had also increased.

Analysts claimed that Cisco’s innovative and aggressive recruiting initiatives were to a large extent responsible for the company’s expansion at 40% per year and recruiting 250 employees every week.

Industry observers feel that other players should also modify their recruitment policies to take advantage, like Cisco did.

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