How restaurants can use an employee referral program to find quality new hires

Restaurants have faced many challenges navigating the pandemic. They’ve had to become more technologically savvy, streamline contactless pickup, develop more robust delivery options and change the way their business functions in a short span of time. While most restaurants have found solutions to many of these challenges, another problem looms large: a labor shortage that’s affecting the industry worldwide.

Fortunately, there’s a solution that could help restaurants build their teams back up to serve increasing demand: employee referral programs.

An employee referral program is a cost-efficient way to source quality talent without the hassle of seeking out applicants who may or may not be the best fit for the job. It’s effective, too — according to the Harvard Business Review, referrals result in 70% more good hires than non-referrals.

So how do you get a referral program started? Here are some steps to setting up and running a successful employee referral program that’ll help you staff your restaurant with the right talent.

1. Implement a reward system that pays off

 The best way to encourage current employees to actively source potential new hires for your restaurant is to provide an incentive. Offering a monetary bonus is a simple and effective way to entice action. In fact, it’s one of the most popular rewards companies can present in exchange for referrals. Bonuses can range from $50 to $5,000— you can decide what best fits your budget. If you’re worried about the expense, consider that a company can save $3,000 per hire for every referral that comes from an existing employee.

While cash bonuses are standard in many companies’ referral programs, they’re not the only way you can incentivize your staff to refer potential hires. Gifts, gift cards and even chances to win raffles can also serve as great incentives. Whatever way you choose to promote your referral program, make sure it’s enticing enough to engage your employees. Restaurant Business Online has a list of programs, you can check for ideas.

Related: 6 ways to set your restaurant apart to attract great employees

2. Strengthen the program

Once you’ve decided on a reward, you’ll need to iron out all the details of how you’ll implement the program. Keep it simple — a program that’s too complicated might discourage employees from participating.  Establish how employees will submit referrals, how they’ll be tracked, how quickly referrals will move through the hiring process and when your employees will receive their rewards if their referrals are successful.

You’ll also want to determine what constitutes a successful referral. Is getting hired the only criteria a referral needs to meet, or do they need to stay with the company for a minimum period of time? All of this should be outlined in a plan for your program so that you can communicate the process clearly to your team.   

In addition, set goals to track the program’s success. Are you trying to reduce turnover? Attract better workers? Build up your staff to better meet demand? These objectives should guide you once you measure the success of the program — more on that later.

3. Engage your employees for better results

Your program won’t just help your business. If they choose to participate, existing staff will also benefit from the rewards you’re offering as incentives.

Communicate the new program to your team and explain how they can use it. Highlight the rewards and the benefits good hires can have on the restaurant’s success and efficiency. Make sure every aspect of the program is explained clearly.

Continue to promote the program among your staff beyond its initial introduction. Announce raffle or bonus winners in team meetings. You can even set up a sign at the back of the house to keep the program top of mind among your employees. With the right implementation, your new referral system can become a lasting part of your company’s culture, keeping your employees engaged and motivated to find new talent and play an active role in your restaurant’s success.

Related: How to address labor shortages & make your restaurant more efficient

4. Analyze the success of your referral program

To make sure that your employee referral program meets the goals you outlined, you’ll need to keep track of some stats. See how many employee referrals you’ve hired and compare that number to previous hiring initiatives and historical data. You can also measure how long referred employees stayed at your restaurant compared to traditionally sourced hires.

Once you’ve implemented your program, look at your employees’ participation rate and ask them what they think about the process so far.  If you’re not getting the results you wanted, ask for feedback. It could be that the system is too complex. Maybe the reward isn’t attractive enough. Or perhaps not enough people know about the program, and it just needs a little extra promotion. Regardless of the issue, you can determine what steps to take by talking to your employees and taking a more critical look at the program.

An employee referral program can greatly improve a restaurant’s hiring practices and the quality of its team. It helps source better hires, often at less cost than traditional recruitment methods. It also keeps your current employees motivated about growing the team and contributing to the restaurant’s success. By establishing a simple system to boost referrals, communicating effectively and tracking your results, your restaurant can bounce back from pandemic woes and keep up with demand despite the obstacles COVID-19 has created for the industry.