4 ways to rake in employee referrals

As they say, desperate times call for rock solid human resources policies. (They say that, right?)

With unemployment dipping to its lowest rates in nearly a decade, some restaurants are building out employee referral programs for a reliable stream of applicants. At Iron Hill Brewery & Restaurant, between 35% and 45% of employees are hired from employee referrals. “It enables us to hire people more quickly, and hire people who meet our expectations,” says Lorraine Serva, director of human resources for the 13-unit East Coast chain. Here’s how the Iron Hill team keeps those employee referrals coming. 

Staying on top of cash flow is one of the most important pillars of a successful employee referral program, Serva says. “If you don’t pay out—or don’t pay out on time—you will kill the program,” she says. Iron Hill staff who offer referrals can earn $50 after three months of the new hire’s employment, $100 after six months and $200 after a year. The chain ups the ante for more elusive management recommendations, with a reward of $500 after six months and $1,500 after a year. 

Serva says some employees mention that they’d prefer a quicker payoff than three months. To keep the program fresh, the chain will sometimes allow employees to enter a drawing for each new hire they refer. If a staff member wins the drawing and their referral is hired, they get an additional bonus on top of their regular incentive pay.

To further screen referrals, the Iron Hill team asks potential hires if they have a close friend at the operation. “Hiring employees’ friends helps us increase the number of employees with a best friend at work, which is a predictor of retention,” Serva says.

At a few locations, the Iron Hill team doesn’t wait for referrals to pour in—instead, it arms employees with business cards that serve as invitations to apply. Iron Hill staff can hand out the cards when they good get service at a restaurant or when they think their friends would be a good fit at the operation, Serva says. The cards contain a space for the employee to write their name and instructions on how to submit an application.

Iron Hill also isn’t quiet about its employee referral program, plugging it from day one. The chain spotlights the program in staff orientation, in its employee handbook and even in its new hire documentation.