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Employee Retention in a Franchise Business

By: Bill Bradley

 

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When you’re selecting a franchise, you might think about your possible income, how much the business appeals to you personally, and what each franchise business opportunity’s chances of success might be in your hometown. You should also consider day to day management, and that includes hiring and retaining good workers. Ideally, you should find a franchise that sets you up for success in employee management.

 
Businesses where higher-level employee skills are integral to the business typically need to place a higher emphasis on employee retention than businesses where training new employees is less costly. When you’re assessing a franchise, think about who the most important workers are and what time and money you will have to invest when you need to replace those assets.
 
For example, if you choose a franchisor who will work with you to train skilled technicians or a franchise business that depends on your hiring an experienced chef, you’re looking at a different level of investment in workers than in a business that is designed to operate without expert workers.
 
If you determine that the business you’re considering relies on special skills, employee retention will be a high priority. However, high turnover is never beneficial. Filling positions that require very limited training still takes time. You’ll have to advertise the position, sort through applications, interview candidates, choose the right person, hire and complete initial paperwork for the purpose, outfit new workers with uniforms or tools or workstations, and perhaps buy nameplates or update your website—all before you even start training. Brand new workers are also more likely to make errors and break things than experienced ones, and they’re nearly always slower and less efficient. During the time that you’re without a worker while you hire a new one, and the breaking in period for the new workers, your other team members—or you—will have to pick up the slack. There will be costs involved in that, too, whether it’s a loss of overall productivity or of morale.
 
It’s worth keeping good workers.
 
Some franchise programs have employee development programs and educational resources for employees as well as for franchise owners. Other franchisors ask franchisees to offer pooled incentives, like retirement plans or health care for valuable employees such as managers.
 
With any retention plan, you’ll want to ensure that you’re comfortable with the associated expenses. Be sure to speak with current and past franchisees in the franchise you’re considering about how the program trains and retains employees and whether or not the system is effective. Then balance that against the cost of turnover.
 
If the franchises you’re considering don’t have employee retention programs built in, you should research options you can offer directly. Benefits and perks available to independent business owners are available to franchisees, too. Consider the costs of such programs when you compare options.
 
Finally, remember that extrinsic rewards like salary, benefits, and perks may not keep workers happy if they don’t feel they’re treated with respect or if the workplace atmosphere is unpleasant. That’s entirely under the franchisee’s control.
 
This article was originally published by America’s Best Franchises
Published: April 28, 2014
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Bill Bradley

Bill Bradley

Bill Bradley is founding member and CEO of America’s Best Franchises, LLC.  Bill founded three financial services firms, Ocean Shores Ventures, Denali International and William Bradley Enterprises. In addition, to launching America’s Best Franchises in 2005, Bill orchestrated approximately 20 private equity transactions in excess of $31 million, and launched five specific purpose private equity partnerships.

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