Enterprise Employee Referral Program Proposal

August 2008

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Table of Contents

1. Referral Statistics

2. Strategies/Best Practices

2. Bonus Payout Overview

3. Process Steps

4. Policies, Terms & Conditions

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Employee Referral Statistics

Time to Fill• Employees selling the company to candidates and typically refer those

that are ready for a job change resulting in less time searching & screening

Impact to Turnover• Employees hired through referrals have a 25% higher retention rate

than those hired through other sources 1

• Could result in up to $44M in savings 2

Percentage of Hires Coming From Referrals• Referrals are 54 times more likely to result in a hire than from job

boards 3

Impact to Cost-per-hire• Referral costs for an exempt employee equal $500 and up to $3k for

print advertising

__________________________________________1 Source: Workforce Management & Ohio State University2 Based on projected annual voluntary turnover rates (19%) and an average salary of $40k; cost of

turnover is estimated at 150% of employees annual salary3 Source: ERE.com; November 28, 2006

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Employee Referral Best Practices

Below are concepts on how we can establish a successful program now and in the future. Most can be supported by Vurv or our Career Portal.

Public recognition of successful referrals• Announce referrals during Safety meetings• Post referrals on intranet with listing of job filled (future)

Pay the bonus rewards promptly• Paid immediately after new hire starts – no longer than 90 days

Offer bonus payouts that are significant• Payouts can also range based on level, business need and volume

Regular promotional incentives• Prizes for employees who refer the most candidates

Converting from passive to proactive tool• Solicit referrals regardless of openings

Creative devices to enhance employee participation• Consistent communication highlighting the business critical positions

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Bonus Payout Overview

Payouts based on function/level• Tier 1: $1000 for hard-to-fill positions (i.e. VP level & above; IT roles) • Tier 2: $500 for Exempt/Professional level• Tier 3: $250 for Non-exempt (i.e. Admin, Hourly & Entry Level)

For business critical positions, Hiring Manager reserves the right to offer any referral bonus amount he/she deems appropriate to generate candidates

Bonuses to be paid out on first pay period following the 90 days after new hire starts

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General Process Steps

Recruiter, HR, Hiring Manager communicates referral program to new hires during orientation and/or training

Recruiter sends welcome email to New Hire and solicits referrals within first week

Recruiter schedules focus group to allow employees to ID warm leads – focus groups can be based on job function or business unit

Online application form (filled out by referred candidate) must be completed and include “employee referral” on candidate source and the name of the referring employee.

Reports are run out of Vurn to show name of new hire and referring employee. Payroll is contacted by Region HR for distribution of payment

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Policies, Terms & Conditions

ProBuild employee groups eligible to participate, but not eligible for bonuses:

• Human Resources• VP level and above• Contractors or Consultants – anyone onsite at ProBuild being

represented by 3rd party employment or consulting firm• Managers/supervisors when referring someone w/in their own groups• Employees that leave the company prior to the referral bonus payment

date The following candidates will not qualify as a referred candidate:

• Internal employees• Contractors currently working onsite at ProBuild in any capacity

Other Policies:• Referred candidates must be submitted directly to the Recruiter or a

representative of the Recruiting team prior to being hired. Bonus amount comes out of Hiring Manager budget

Bonus payment will not be made if another fee (e.g. employment agency fee or temporary agency conversion fee) is required to be paid by ProBuild