How Firstbird Helps McDonald’s Germany LCC Reduce Recruiting Costs by 40% Thanks to Employee Referrals

McDonald’s Germany LCC
About the project

McDonald’s Germany LCC

59,000

Gastronomy

2018

Cornerstone

Challenge

With approximately 1,500 restaurants throughout the country and sales amounting to 3.2 billion euros in 2020, McDonald’s is the largest company within Germany’s gastronomy industry. This calls for personnel requirements and hiring costs that are, unsurprisingly, correspondingly high.

Franchisees, which have an average of seven restaurants each, spend a total of around €9,000 a year on recruiting. This includes measures such as flyers, brochures, trade fairs and events, job advertisements and international recruitment. Due to the high turnover and daily new hires, recruiters and restaurant managers also invest a lot of time in the search for suitable employees and their training.

McDonald’s already had an employee referral program in place before implementing Firstbird. This utilised referral forms that were filled out by restaurant managers before being submitted to the recruiting team. However, the company only started to see results, achieving time and cost savings, after the implementation of Firstbird.

 

McDonald's case study 1

Results

With the goal of saving time and costs in recruiting and further advancing the company’s digitalization, McDonald’s successfully integrated Firstbird’s digital employee referral program into its applicant tracking system, Cornerstone. To meet a staffing requirement of 5,000 employees annually, parent company McDonald’s Deutschland LLC, with its 91 restaurants run under its own management and its headquarters in Munich, relies on the networks of its workforce. The remaining restaurants are managed by franchise partners, some of whom have also decided to integrate Firstbird into their recruiting strategy.

McDonald’s realised how much recruiting potential it had within its own ranks and decided to leverage the social reach of its employees to hire suitable candidates in a more efficient and cost-effective way. The company sees the fact that open positions can be shared on all major social networks with just a few clicks as a major advantage that traditional verbal referrals or other recruitment measures cannot match nor compete with.

The success of Firstbird was evident at McDonald’s from the start, during the pilot phase of the project. Ninety one of McDonald’s Germany LLC’s locations participated and quickly turned a large number of employees into Talent Scouts in just a few days.

Over a 2.5 year period, each Talent Scout shared 8 jobs on average per year, resulting in a significant increase in visibility particularly on Facebook, and other channels such as WhatsApp. Each Talent Scout went on then to make at least one referral, and this resulted in 1 in every 3 referrals being hired.

The result is impressive: recruiting costs were reduced by over 40% and the length of the hiring process was cut down by as much as 50%. In addition, HR managers found themselves spending less time sifting through applications and restaurant managers no longer having to fill out referral forms. In turn, McDonald’s Germany LLC saves approximately 182 hours of work per month.

On top of this, McDonald’s has reported a higher quality of referred candidates, who also stay longer with the company. Lisa Augusciak, recruiter at McDonald’s, explains, “They have insider information about McDonald’s as an employer before they apply, so they know what to expect. For that reason, they tend to stay longer.” Restaurant managers have also noted a better working atmosphere when employees already know each other.

 

Implementation

During the pilot phase for the introduction of Firstbird, two particularly success-determining variables stood out for McDonald’s: a motivating reward strategy and a continuous communication concept.

To motivate employees to make referrals in the long-term, McDonald’s relies on a reward strategy with a mix of monetary and non-monetary rewards. On average, employees receive €500 for a successful referral. However, the bonus varies according to location and the position advertised. This allows the company to succeed in focusing on restaurants with high staff turnover and on positions that are difficult to fill. The bonuses are paid out in instalments: three and six months after the referred talent starts work.

Additionally, the top ten most successful Talent Scouts are awarded prizes at the end of the year consisting of various non-cash prizes such as branded caps or reusable coffee mugs as a thank you for their valuable support. With this gesture, McDonald’s can show its Talent Scouts additional appreciation; it also creates further incentives for employee referrals.

The second point that is of central importance to the success of McDonald’s referral strategy is a well thought-out communication concept.  A successful employee-referral program stands and falls with the people who use it. McDonald’s recognized this right away and developed a 360-degree communication strategy to encourage as many employees as possible to use Firstbird.

Through training courses, step-by-step explanatory videos, flyers and posters with QR codes, events with franchisees, consultation hours in restaurants and meetings with restaurant managers, McDonald’s has managed to reach crew members without PC access and less tech-savvy employees, supporting them in the registration process. Restaurant managers have a special role to play here, acting as an important interface. If they act as role models and actively promote the employee referral program, the restaurant crew can quickly succeed in becoming Talent Scouts. Lisa Augusciak commented the following on the success of this project:

 

“It is super important to have an employee referral program, especially if you are a large company like us. I can definitely recommend Firstbird for companies with a large staffing need!”

 

Lisa Augusciak

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