Bring a Friend
Rib Crib pays for employee referrals and reaps the benefits of happy workers.

Seth Nimmo had a job washing dishes at the Tulsa, Okla., Rib Crib BBQ & Grill back in the early ’90s. He liked the job, so he told his friends about how much fun it was to work there. Soon several of his high-school classmates were working with him.

Today Nimmo is Rib Crib’s director of restaurant development and two of his high school buddies are multiunit managers. A testament to the 40-unit casual-dining chain’s retention, yes. But it’s also an example how referrals have helped Rib Crib recruit quality employees.

Paid Players
The Tulsa-based company implemented a paid referral program in 2003. If an employee refers a part-time worker who stays for at least 90 days, he or she gets a $30 bonus. A referral for a full-time hire earns the employee $50, and for a manager, $1,000.

According to People Report’s Survey of Unit Level Employment Practices, 77 percent of respondents said their company has a formal referral program, but only 15 percent of them said it is very effective, and 48 percent, somewhat effective.

Rib Crib Director of Human Resources Lori Stevens is in the “very effective” camp, calling referrals “the most powerful recruiting tool we have.” She says that the cost per hire is relatively inexpensive when compared to other methods of recruiting such as ads or recruiters.

The method is more effective, as well. According to Stevens, over time employees develop bonds, often becoming dependent on one another for support. An employee won’t refer someone who won’t fit with the rest of the group or pull their weight.

And workers are happier, she says: “Having a best friend at work is the key to attracting and keeping employees.”

Focus on Retention
According to Rib Crib executives, the referral program helps keep turnover levels low. Last year, hourly turnover was 106 percent, and unit-level-management turnover was 25 percent.

The company also insists it’s good for business. Stevens says a referral program gives restaurant managers solutions in an increasingly tight labor market, allowing them more time to focus on running the business.

Rib Crib garnered systemwide sales of $45 million in 2005 and anticipates $55 million in 2006. It plans to open eight new restaurants this year.

As it continues to expand, Rib Crib will depend on the referral program as well as internal promotions to fill new management positions. About 30 percent of managers have been promoted from hourly positions.

Stevens says that when President and CEO Bret Chandler founded Rib Crib in 1992, he knew then that he would have to find and keep the best people if he wanted to succeed. Fourteen years later, he still considers the company’s employees a competitive advantage in the marketplace.