Start Spreading The Word

By Jim Cory

If you needed to hire someone for your home improvement company, where’s the first place you’d look? Online? Probably. But experienced executives often start right outside the office door. With their own employees.

Take Brian Altmann. The owner of DBS, Inc. (that’s Dutchess Building Specialists) in Poughkeepsie, NY, is sitting on signed contracts that will keep his $3 million company busy until June, if not another kitchen or bathroom is sold.

“Right now, we’re looking for a lead carpenter,” he says. So he is “spreading the word.” Internally.

Altmann has a few reasons for starting with what HR people call “internal recruitment,” which encourages employees to identify potential job candidates from their social networks. For one thing, it’s been the source of his best hires. For another, putting the word out allays suspicion by employees that they’re about to be blindsided in some way. And for a third, someone within the company recommending a person greatly increases the chance that that hire will work out. 

“I don’t need the ‘best’ lead carpenter,” Altmann says. “I need someone who cares, who’s conscientious, who’s going to fit into this culture.”

 

Try It, You’ll Like It

Culture drives your employee referral success. If your business resembles a prison camp that issues paychecks, employees are unlikely to be on the lookout for relatives or buddies who might like working there. If it’s fun and challenging, employees spread the word. And they do so selectively. “Most of the guys who work for us know each other,” says Ryan Parsons, co-owner of The Brothers Who Just Do Gutters, in Poughkeepsie, NY, whose company attracts most of its installers via employee referral. “They’re the front line of the pre-interview.”

Not long ago The Brothers had a resume on their desk from a person seeking an installer job and “someone called and said: ‘my cousin applied and has a drug issue. Do not hire him.”

That’s, in a nutshell, why internal referrals work so well. Good people want to work with other good people. No one wants to carry a slacker.

“Your employees are the voice of your business,” says Brian Gottlieb, owner of Tundraland www.Tundraland.com, in Green Bay, WI, one of the fastest growing home improvement companies in the U.S. People “join for culture,” Gottlieb says. What typically happens is that “someone goes to someone and says: ‘My job sucks, my boss is a jerk.’ And [one of our employees says]: ‘You ought to work at Tundraland. It’s not like that at all.’”

 

Incentives In Place

Companies of all sizes use employee referrals as a recruiting method and a recent study found that 63 percent of companies offered a formal referral bonus program. Among those who did not, 92 percent were looking at implementing one.

Bonuses serve to galvanize referral recruiting. Tundraland pays employees a finder’s fee for recommending someone who’s hired, and additional bonuses if that person stays 30 days, and again at 90 days. Depending on the position, an employee “can make up to $500,” Gottlieb says, but “the money is secondary.” The bigger factor, he says, is that employees like working there and want their friends to work there too.

But money talks, as they say. Lakeside Exteriors, in Missouri,  which installs fiber cement siding and always needs new installation workers, pays a $300 bonus to employees who “bring in good people that last six months,” president Matt Merrifield says. Lakeside had so-so results with websites such as Craigslist and Monster, with advertising on Latino radio programs and by reaching out to veterans’ organizations. So the company set up a rewards program for employee referrals. One employee, for example, has earned $1,200 bringing in four others. “We try everything,” Merrifield says.

Employee referrals work, notes Grant Mazmanian, of The Pinnacle Group, a Pennsylvania organization that assists companies in recruiting using its own profile testing, with “spaced repetition.” That is, remind employees daily, in one way or another, to be on the lookout for potential new recruits. “You can tell them [you’re looking for people] but they’ll forget in an hour,” Mazmanian says. “Put it on their pay stub. ‘We need carpenters. We need salespeople.’ Keep putting that message out there, and it works.”