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Chain LeaderEditorial Archives2005April 15 — Best Places To Work

Word of Mouth
Jason’s Deli uses referrals to recruit employees and keep turnover down.

In 2004, 15 percent of Jason’s Deli’s managers and 10 percent of its hourlies came from employee referrals.

Tyson Schmidt always looked up to his older brother, Will. So when he saw Will working the sandwich line at Jason’s Deli in College Station, Texas, he wanted to follow in his footsteps. “It just seemed like everybody up there was always having a good time. I mean everybody was working and they were busy, but it seemed like everybody was enjoying what they were doing,” Schmidt says.

So Will referred Tyson for Jason’s Deli’s Managers-in-Training program in December 1999. While the two worked their way up the ladder, Tyson referred his twin brother, Wesley, for the manager-training program and his younger brother, Jeffrey, for hourly employment at Jason’s. Now Tyson is a GM for a unit in Beaumont, Texas; Wesley is a second assistant director for the Round Rock unit; Jeffrey is the first assistant director for a unit in Austin; and Will is a district supervisor in Houston.

Seeing family and friends working at Jason’s Deli is a common sight thanks to referrals from employees, according to Director of Human Resources Loriann Vasquez. The Beaumont, Texas-based company’s referral program is its No. 2 source for staffing behind the Internet. In 2004, 15 percent of managers and 10 percent of hourlies came from employee referrals.

Easy Money
The fast-casual sandwich chain’s referral program pays employees $50 for referring full-time hourly employees, $30 for part-time hourlies and $250 for truck drivers for its distribution company. They receive half the bonus after the new hire works for at least 30 days and the remaining if the employee stays 90 days.

Jason’s Deli
Parent Company
Deli Management Inc.
Beaumont, Texas
80 company, 57 franchise
2004 Systemwide Sales
$280 million
2005 Systemwide Sales
$328 million (company estimate)
Average Check
4,000 company, 2,500 franchise (company estimate)
Expansion Plans

18 in 2005, 300 total by 2010

If an employee refers someone for a management position, the employee receives $500 for the first managerial referral, $750 for the second referral and $1,000 for each thereafter. But the managerial hire must work for the company for at least 30 days for the employee to collect the bonus. Jason’s handed out about $36,000 in referral bonuses last year.

The referral program seems to be working. In 2004, the turnover rate for hourlies was 109 percent and management turnover was 34 percent. Fourteen percent of Jason’s Deli’s managers were promoted from the hourly ranks.

“We’re encouraging the referral of family and friends,” says Vasquez. “So our managers and our employees are not going to bring anyone on board who they don’t believe is a fit for our company. And referrals that come on board, they don’t want to let their families and friends down.”

The company encourages employees to participate in the referral program by hanging posters in the restaurants, mailing postcards to all employees annually, promoting it in the monthly company newsletter and e-mails, and discussing it at managers’ and unit meetings.

Once managers receive their referral bonuses, Jason’s human-resources staff calls each of them to gauge their opinions on the managerial referral program. The company plans to get employee feedback on the hourly referral program as well as other topics when it distributes its annual employee-satisfaction survey.

In the meantime, Jason’s Deli is considering increasing the bonus for referring full-time and part-time employees to $100 and $50, respectively.

Overall, both managers and hourlies like the company’s referral programs, according to Vasquez. “It works,” she says. “To them it’s easy money. It’s a no-brainer. It’s easy to refer a friend to a place that you enjoy working at.”

Climbing to the Top
As Jason’s prepares to have 300 restaurants open by 2010, employee referrals will play an important role in its growth given the tight labor market. “We have to create a situation where we’re the employer of choice,” Vasquez explains. “We’ve got to take care of our existing employees so that they don’t leave us, but as importantly, so they can go out and encourage additional people to come work for us. The bottom line is, our referrals will probably easily gain and probably be one of our top—if not the top—sourcing for both hourly and management personnel. It’s critical.”

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