How Franchises Can Retain Top Talent

Retention is a Big Challenge for Franchises

Retaining high-quality talent is a challenge in every industry, but it’s particularly challenging when it comes to hourly or deskless workers, who comprise the bulk of franchise employees.

• 44% of deskless workers feel disconnected from their employers, and the turnover rates for deskless workers can reach as high as 500% per year.
• The Harvard Business Review found that half of the young people they surveyed working entry-level jobs said they were planning on quitting within a year, and less than a quarter felt satisfied with their role. 
• The National Restaurant Association’s 2022 State of the Restaurant Industry Report found that 78% of restaurants don’t have enough staff to support customer demand and that 3 out of 4 employees plan to leave their jobs “soon.”

The International Franchise Association’s 2022 Franchise Economic Outlook Report found a top challenge facing franchise businesses today is the quality of their labor. Per the report, “More than two-thirds of franchise brands have reported that their franchisee-owned businesses received few, some, or no qualified applicants for open positions over the past six months.” Additionally, the report forecasts that franchising staffing issues aren’t going away anytime soon, meaning that strengthening retention efforts is even more vital than ever.

In a previous post, we covered how franchises can increase quality applicants. This post provides actionable ways franchises can retain top talent, obtaining all the benefits of high retention rates.

How Franchises Can Better Retain Top Talent

• Hire the Right Employees
• Onboard Your Employees
• Cultivate Company Culture
• Provide Professional Development
• Prioritize Flexibility

Hire the Right Employees

Strong retention starts with hiring the right people. Too many franchises make the mistake of adopting a “warm body” approach—they want every role filled, no matter the credentials or passion, which isn’t savvy when you realize how much turnover costs, even for just one position. 

While we recognize that you can’t run a business without humans to staff it, it’s always best to find applicants with the necessary skills and mindset for your roles. If possible, you also want to find individuals whose career goals and values align with your mission. Additionally, a diverse workforce is more engaged and productive than one that isn’t. 

Organizations lose upwards of $14,900 on a bad hire that leaves the organization within that first year. Bad hires can also influence the productivity of your other employees. Imagine your revenue growth if you saved $14,900 on each bad employee?

Use Recruiting Tech

Hiring software—like an applicant tracking system (ATS)—strengthens, streamlines, and automates the recruiting process. Good recruiting software also standardizes the process so that all stakeholders know what needs to be done and when. CareerBuilder found that 45% of hiring managers made bad hires because they felt rushed and unorganized in the hiring process, which an ATS can help avoid.

Applicant tracking systems take recruiting to the next level. Statistically:

• 94% of ATS users said applicant tracking systems positively impacted their hiring.
• 78% of companies using an ATS say it makes recruiting easier. 
• 86% of ATS users say the software has helped them hire faster.
• 78% of ATS users say it has improved the quality of their hires.

Here at HiringThing, our branded applicant tracking system has helped many franchises grow their business and retain top talent. Set up a chat with one of our business development specialists to see how our ATS can help your franchises attract and retain great workers. 

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Onboard Your Employees

Employee turnover costs organizations time and money—it’s estimated that a quarter of organizations, especially those in industries with high turnover rates (like many franchises), spend nearly 40% of their yearly earnings on turnover-related expenses. According to SHRM, 50% of all hourly workers leave jobs in the first four months. 

As SHRM further points out, “research and conventional wisdom both suggest that employees get about 90 days to prove themselves in a new job. The faster new hires feel welcome and prepared for their jobs, the faster they will be able to successfully contribute to the firm’s mission.” Still, Gallup found that 88% of organizations don’t have a strong onboarding process that helps new hires feel welcomed and prepared.

A great onboarding experience can improve your retention by 82% and improve your productivity by 77%. If you don’t have an onboarding strategy and process in place, it’s time to do that (if you’re looking for where to start, we recommend SHRM’s New Employee Onboarding Guide).

Addressing professional development during onboarding increases employee satisfaction by 3.5. Kick this up by bringing up professional development and career goals during the recruiting process, even for hourly employees.”

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Cultivate Company Culture

A Glassdoor study found that 56% of workers ranked a strong workplace culture as more important than salary, with more than three out of four workers saying company culture affects whether they apply for a position.

Company culture, also known as employer brand, is how potential employees, job seekers, present employees, and past employees describe their feelings about their workplace. It includes various elements, including working environment, mission, values, ethics, expectations, goals, and career paths.

Company culture is essential, but hourly employees who make up the bulk of many franchise’s workforces consistently rate their perception of company culture lower than their hourly counterparts. This is an especially egregious mistake for franchise owners, as a franchise first gains success around the corporation’s employer brand. 

Franchisees can start strengthening their company culture by leaning into what made their franchise brand appealing in the first place—what about the franchise culture drew them in? Likewise, they can look to their franchisors for direction. Additionally, it would behoove franchisees to cultivate a company sub-culture unique to their branches, as long as they follow franchisor guidelines.

Franchisors should spend time cultivating company culture and engaging their franchisees so that it’s top-of-mind. They should also regularly do company culture audits and temperature checks and provide their franchisees with resources to strengthen company culture.

We recognize that cultivating company culture can seem like a daunting or expensive undertaking.  However, even informal discussions or tea or coffee, taking the time to transparently explain decisions, or internal newsletters can do wonders for strengthening your employer brand. 

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Provide Professional Development 

Today’s employees overwhelmingly want career development in their next role—86% of millennials (the generation making up the bulk of our current workforce) say that offering career training and development would keep them from leaving their current position. A lack of career development is also the top reason today’s employees leave positions.

33% of Acai bowl chain SoBol’s corporate team started their SoBol journey as store employees, and that kind of retention is possible because of their commitment to professional development.

“Sobol is in a unique position when it comes to retaining employees, as the perfect first job our employees usually work with us from 16 to early 20s. We have a seasonality to our business that puts us in a great position to retain our high school level employees as they transition to college since our busy season runs from Memorial Day to Labor Day,” says SoBol Director of Administration Kryssa Baldi. “Our staff works when they are home on college breaks and intern with us during the school year if they are taking an applicable course of study, i.e., hospitality, marketing, human resources, or technology. The corporate team spends time in our locations and invites employees to learn more about the business at the corporate level with the hopes that they continue their education and grow with the business.”  

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Prioritize Flexibility

Flexibility is a highly sought-after workplace perk, but hourly workers are often excluded since many employ the “just-in-time” scheduling model. 

One of the best ways to show employees you value them, trust their decision-making and don’t consider them just a cog in the machine is to provide them with some control of their schedules. You’re likely to get happier employees who are more engaged and content with their jobs and want to stay working for your organization. 

The nature of many franchise employees is unpredictable, and while you can’t change that, sometimes making an effort is half the battle. You can add structure to your employees’ schedules by:

• Paying those with less desirable schedules more.
• Providing more fixed shifts and worker-controlled scheduling options—Walmart did this in 2018 and found it reduced absenteeism across the workforce. 
• Giving employees schedule options. Employers who give employees a say in their scheduling see greater employee retention. 

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Additional Resources for Franchise Retention

We hope you found this post helpful. Below are some additional resources we’ve created geared towards organizations with hourly employees. 

• Tips for Engaging Hourly Employees 
• Hiring for Hospitality With Culinary Agents Founder & CEO Alice Cheng
• Increase Your Franchises’s Applicant Traffic
• Ten Ways Franchises Can Attract (and Retain) Higher-Quality Talent

About HiringThing

HiringThing is a modern recruiting and employee onboarding platform as a service that creates seamless talent experiences. Our white label solutions and open API enable technology and service providers to offer hiring and onboarding to their clients. Approachable and adaptable, the platform empowers anyone, anywhere to build their dream team.