Alpharetta is a community of approximately 65,000 residents and a key employment center in North Metro Atlanta with a daytime population of about 120,000 people. The city employs 444.5 full-time employees. While the turnover rate is relatively low at 2-3% annually, the city has found it increasingly challenging to recruit quality candidates, especially in fields related to construction (building inspectors and engineering positions), police officers, and 911 communications. Additionally, the city is not immune to the current “silver tsunami” and anticipates a spike in the turnover rate due to retirements over the next three years.
How does the program work?
The Employee Referral Program provides an incentive award to current employees who bring new talent to the city by referring applicants who are subsequently selected and successfully employed. Both the referring employee and the candidate have to comply with certain eligibility and participation criteria
. Referrals are made by applicants listing the employee’s name as a referral source on the employment application or the applicant’s resume/cover letter as well as on a form
provided by the city for the Human Resources department. If the candidate fills an open position designated on the city’s website for the program, the referring employee receives a two-part referral bonus. The first payment of $1,000 is awarded after the new employee completes 90 days from the hire date, followed by a second payment of the same amount after the new employee completes one year from the hire date. The Human Resources department will monitor the use of and have the final authority over all aspects of the Employee Referral Program.
What are the costs & benefits?
Thus far, the monetary cost to Alpharetta has been $14,000 in referral bonuses. Assuming that all of the 18 employees hired though this process remain with the city for at least one full year, the cost will increase to a total of $28,500 if no additional new hires are brought on as a result of the referral program.
In terms of benefits, it was already apparent prior to the implementation of the program that Alpharetta hired some of the best candidates as a result of existing employees encouraging people they know to submit an application. Employees want high quality co-workers, so they are very selective about who they encourage to apply. At the same time, the applicants who come to the city as a result of employee referrals tend to have more realistic expectations about the organization and the positions for which they are applying.
Alpharetta briefly operated a similar program in 2006 and 2007 that was limited to referrals for police positions. The program was initiated when several new cities were forming in the vicinity and actively sought to recruit experienced police officers. While the program helped fill vacant police positions, it also had a somewhat negative impact on the morale of non-police employees who felt that the city was placing a higher value on police officers than on other employees. The program was eliminated after the high volume of police vacancies subsided and the turnover rate returned to its typical annual rate. If a city is considering a referral program, it is recommended that leadership carefully consider how best to target the program. As Alpharetta’s experience shows, narrowly targeting a few positions can sometimes have unintended consequences that are detrimental to the overall organization.
For more information, please contact James T. Drinkard
, Assistant City Administrator, Alpharetta.