Recruiting: Friend of a Friend

O’Charley’s depends on referrals from employees to help fill its hourly and management positions.

By Maya Norris, Managing Editor -- Chain Leader, 5/1/2007

O’Charley’s employee-referral program rewards employees with $100 for successfully referring hourly employees and $1,000 for a managerial referral who completes the training program.

As a new restaurant coordinator, Scott Francis travels about 47 weeks out of the year to open restaurants for O’Charley’s. "It’s definitely not for everyone," he says. "But I absolutely love it."

It’s the job Francis has wanted ever since he started at O’Charley’s four years ago as a server in Fort Wayne, Ind. He moved up the ladder to bartender, certified trainer, lead trainer and now new restaurant coordinator. And Francis says he wouldn’t have joined the casual-dining chain if it hadn’t been for his friend, a service manager at the restaurant, who told him about all the opportunities available and referred him to the company.

Francis later referred three friends for positions as a server, bartender trainer and kitchen manager. "I won’t refer anyone unless I think they have something to bring to the company," he says. "I won’t put my name on it unless I’m 100 percent committed to that person and know that they’re going to do a good job for the company."

Spreading the Word

O’Charley’s is depending on employees like Francis to help fill its ranks with referrals as the company expands. So far employee referrals are O’Charley’s No. 1 source for recruiting hourly employees and No. 2 source for managers, with internal promotions being the first.

"It is very challenging to find people, and this is certainly one of the things we’re using to try to bring people on board that want to be here," says Director of Recruiting Greg Freeze.

O’Charley’s referral program offers cash awards to employees who successfully refer someone for employment. Employees receive $100 net for referring someone for hourly employment. They get $50 when the hourly starts and the remaining $50 if he or she completes the two-week training period. The company only accepts referrals for hourly employees when a restaurant needs them.

However, O’Charley’s accepts referrals for managers all year. Employees who refer managers receive $1,000 net once the managerial hire completes the nine-week training program. In addition, O’Charley’s offers quarterly and annual prizes such as a $5,000 gift card and a trip to Hawaii to the employees who successfully refer the most managers in a given period.

In 2006, the referral program dispersed $152,000 in cash and prizes. "It’s significantly less expensive than hiring a person through another format," Freeze says. "We get better people that stay longer."

In 2006, O’Charley’s turnover rate was 25 percent for managers. The company won’t divulge its hourly turnover rate except to say that it is near the average for the casual-dining segment. People Report’s 2006 Survey of Unit Level Employment Practices found that the average turnover rate for hourly employees in 2005 was 114 percent, while management turnover averaged 35 percent.

Talk It Up

According to Freeze, communication is key to the referral program. O’Charley’s promotes it at orientation, with posters in the units and at quarterly regional meetings. And once an employee wins the quarterly or annual award, the company sends a memo to all the units publicizing it.

When a new store opens, O’Charley’s operations directors and unit managers give employees tips on how they can approach top-performing staff at other restaurants they go to and convince them to check out the job opportunities at O’Charley’s. The company even provides employees with cards that contain the corporate recruitment department’s 800 number or contact information for the local unit with space to write in their names as the referring employees.

O’Charley’s plans to strengthen the referral program by adding a link to its intranet, where users can access information about the program and easily supply contact information about the person they want to refer. The company also wants to offer employees who refer someone a small gift such as movie tickets even if O’Charley’s doesn’t hire the person they referred.

"Ultimately our goal would be to turn our entire work force into little recruiters because we need people at all levels as we continue to grow and just develop as a company," Freeze says.

Consider Yourself Part of the Family: To recruit top employees, Ruth's Chris offers hourlies benefits, flexible scheduling and opportunities for advancement.

Back to Best Places To Work articles