Are your franchisees struggling with turnover and staffing shortages?
They’re not alone.
Across the United States, the volunteer turnover rate doubled in the ten year span of 2011 and 2021. And recent CareerPlug research found that 49% of employees said they have thought about leaving their jobs in the last year.
But it’s not all grim! We also found that 84% of employees who said they were planning on leaving their job said they would stay IF their managers made positive changes in the workplace.
This means there are steps that franchisees can take to decrease turnover and retain their team, and it’s up to franchisors to support them in those initiatives. In this webinar, we explore what those steps are and how franchisors can help.
Hosted by Lizzy Young, CareerPlug’s Senior Manager of Partnership Acquisition
Panelists:
- Clint Smith – Founder & CEO of CareerPlug
- Scott Greenberg – Business Performance Expert & Author
- Angele Coté – Founder & CEO of AC Inc
Business impacts of high turnover
When it comes to the cost of turnover, there’s a number of ways you can look at the impact on a business’s bottom line. There is the direct cost of having to hire and retain replacement employees, of course, but there are often other unforeseen costs as well.
Clint shares, “The smallest number I’ve seen for the cost of turnover is around $2,000. But there’s a lot more to the cost than just that. There’s an impact on the client experience.” He goes on to share this example: “Imagine you are the customer of a company that provides house cleaning services, and you have a new person in your house constantly. That wouldn’t be a great experience.”
Plus, by now, we’ve all seen signs on our favorite restaurant doors where they couldn’t open or had to change their hours because they are short-staffed. In addition to this anecdotal data, there’s hard data supporting the connection between customer satisfaction and employee satisfaction. It’s simple, if you’re happy at your job, you’ll provide a better experience for your customers.
Lastly, there’s also the impact on the staff and the pressure added by constant turnover. This often contributes to a cycle of low morale that’s hard to break out of. Scott shares, “High turnover is a symptom of a bigger problem – of the work environment itself. There’s a reason that people aren’t happy and are leaving.”
Common reasons for turnover
Clint says, “The number one cause of turnover is that you didn’t hire the right person in the first place. You need to hire for ability, motivation, and culture fit. They need to check the box on all 3 of them. Another thing that could lead to early turnover is unmet expectations during onboarding. You didn’t follow through on something that you said or promised in the hiring process.”
Another thing Clint mentions is the failure to establish a connection with your new hire and their coworkers or managers. He shares, “If your employee has no relationship with the company – or worse, a poor relationship, then it’s nothing more than a transactional relationship. If employees had a real connection with the company, they wouldn’t be looking for another opportunity.”
A compounding issue is flexibility in scheduling. Turnover puts pressure on your team and affects their schedule. Additionally, not providing your high-performers with opportunities for growth could also cause them to seek out new opportunities.
But ultimately, the main reasons for turnover are different across every company. Clint recommends that franchisees do exit interviews to find out why their employees are leaving so that they can better address the problems at hand.
What can you do as a franchisor?
When a franchisee is struggling with high turnover, they may feel the strain of having to constantly work in the business instead of on it. They may find themselves picking up the slack of not having enough team members or constantly putting out fires because of the impacts of turnover mentioned above.
But it’s still up to franchisors and those supporting franchisees to help them see just how detrimental turnover and an unengaged staff can be. Angela says, “We need to be equipping the people that are directly supporting franchisees with tools and resources. We need to show them the big picture. If they don’t have the picture laid out for them, they may not be able to understand or create buy-in. Lay out the metrics, break down the numbers and show them how much it cost to find a new team member.”
In addition to helping franchisees understand the impact of turnover, there are some other ways that you can support them and help them retain their teams.
Connect them to their network
The panel agrees: The franchise system is built on community.
However, as Scott explains, “Franchisors may not put the time and energy into what may be the most important thing: helping the franchisee understand that you’re not just buying a business, you bought into a community. Introduce them to as many franchisees as possible. Ask another franchisee to be their mentor.”
The relationships among franchisees is really valuable. “The more franchisees can deliver on that, the stronger the system will be.”
Angela adds that in addition to connecting them to their network of franchisees, “Connect them with their local chamber of commerce and the resources in their local community. Showing them thought leaders and resources like books, webinars, and podcasts so they can learn from experts.”
How to equip franchisees to hire the right employees
As mentioned, one way to prevent turnover is to hire the right people in the first place. Clint shares, “Do your franchisees know what a talented person looks like and do they know how to evaluate for that?”
And when it comes to attracting the right candidates, he goes on to say, “Help the franchisee and ultimately the applicant connect with the why for the organization. And make people feel good about what they’re doing.”
Which brings the group to the next point around the importance of core values for both your business and your hiring process. Core values alignment can be a huge indicator that you’ve found the right person for your team.
When creating (or reworking) your core values, keep them authentic and straightforward. Angela adds, “Look at what it is that’s making your current team and your organization successful and write your values based on that.”
Another important point: Core values exist for your employees, not your customers. Scott explains, “Customers don’t benefit from your values. They benefit from you living those values.”
Effective onboarding for new employees
As mentioned above, having a transactional relationship between employers and employees is not great for the longevity of your team. Your franchisees can and should start building relationships early on with new employees and make it about more than the transactional piece. Onboarding is the perfect opportunity to start forming those relationships.
Scott shares how tools like CareerPlug can make it easy to automate the tedious, administrative elements of onboarding like new hire paperwork, so that managers have more time for “the things that need that human element.”
He goes on to say, “We need to understand and meet the soft needs of employees. Usually when people leave, it’s because the soft needs haven’t been met – the emotional needs, the way we want to feel. We want to connect with them on an emotional level right away.”
Fostering employee engagement
Of course, employee engagement is a huge piece when it comes to employee retention. How can franchisors support franchisees in driving ongoing employee engagement initiatives?
Clint offers, “You have to show them how to lead. Many franchisees haven’t been in leadership or management positions before. It’s about the attitude they take with their employees. Do they make people feel like they have more than just a job and that they are valued?”
He also mentions that franchisors can model good engagement strategies through their relationships with franchisees. “Be willing to accept and give feedback. This creates more of a safe space for others to do the same thing.”
As a former franchisee, Angela shares that she messed up a lot when it came to culture and motivation for their employees. Like her team, your franchisee’s managers might assume that they know what motivates their employees, but they may not always be right.
“If you’re going to do something to motivate your team with money, time-off, a group outing – first, find out what they would even want. And make sure they are in the loop with how to get it.”
Final tips and a note on joint employer
When it comes to preventing turnover, both franchisors and franchisees need to be proactive. Our panelists’ advice boils down to some simple steps.
Franchisors should:
- Communicate the impact of turnover with franchisees
- Connect them to their network of fellow franchisees and local community
- Equip them to hire the right people
- Equip them with good onboarding processes
- Model and support good employee engagement initiatives
A note on joint employer
When it comes to providing your franchisees with the resources and support they need, Angela shares: “Have courage to do it. Lawyers have scared some franchisors to be fearful of providing employment resources, but you also need to think about the risk of not giving your franchisees the tools to be successful.”
The information in this blog post and webinar is intended to provide useful information on the topic covered, but none of the information should be construed as legal advice or a legal opinion. Due to the evolving nature of this topic and potential differences in regional regulations, it is crucial for franchisors and franchisees to seek legal advice specific to their jurisdiction to fully understand their rights, obligations, and any potential joint employer considerations.
