Retaining Franchise Employees

Retaining great employees is the key to success in franchising, or in any business for that matter. This is especially true in retail businesses, where your company is represented by the people who deal directly with your customers.

Hiring has its own challenges, but once employees are trained and performing well, your goal is to keep them. After all, you've spent the time to find them and train them, and don't want to go through that again if you don't have to. The best way to do that is to make them feel valued, recognized for performance, and provide them with a working environment that's better than the competition's. Easier said than done, but definitely doable. Just look to the best franchise organizations to see how it's done.

Employee retention begins with the hiring process, moves on to training, and that's where the rubber meets the road. A perceived slight, a negative word from a manager or co-worker, a denied request for a day off can send an employee out the door, never to be seen again (except to pick up their final paycheck). But one of the most common reasons employees leave a job is ignorance - feeling ignored by their manager or employer, or more commonly, ignorance by the franchisees or their manager about what to do to retain employees!

Employment expert Mel Kleiman, president of Humetrics, has an employee retention system he calls "The Five Firsts," which he calls "a simple system to retain top talent" (for more details, see his column in Multi-Unit Franchisee magazine):

1) First hour on the job. Kleiman calls this the "most important time you will ever spend with your new hire." He says this is not the time for completing paperwork or going over rules and regulations. Instead, it's the time to build a relationship, establish expectations, and make a great first, and lasting, impression.

2) End of first day. He recommends spending the last 15 minutes of a new hire's first day debriefing, answering questions, and ensuring that they leave with a positive atttitude of your company.

3) End of first week. The goals of this meeting, says Kleiman, are to reinforce the new employee's decision to join the company, as well as to get the newcomer's feedback and to ask them for job applicant referrals.

4) First paycheck. This is an opportune time for giving the new hire specific information about their performance to date. Says Kleiman, "Tying this conversation to the presentation of the first paycheck underlines the importance of your feedback and strengthens the employee's relationship with you, the job, and the company."

5) End of first 30 days. This, says Kleiman, is a "stop-loss strategy," a time to evaluate how you and your team have performed in bringing the new employee up to speed, as well as a time to reevaluate the person's overall performance and to learn from them about their experience to date.

One franchisee, with 27 Qdoba Mexican Grills and one Steak N Shake, recently instituted a five-month reorientation program for his hourly staff, saying "We realized that we were losing a disproportionate percentage of folks at six months, and that those who stay beyond six months stay for a significant time." Again, retaining trained, high-performing employees is critical for success.

Other tips from successful franchisees include the following:

  • Use the franchisor's training program, augmented by your own specific needs, values, and culture.
  •  Make your expectations clear from the outset, and be consistent.
  • Measure performance, which results in accountability and a sense of fairness.
  • Meet frequently with managers to educate them about employee retention practices.
  • Be flexible with scheduling for hourly employees as much as possible to support employees' lifestyle needs; provide 2 consecutive days off a week.
  •  Have fun; create a team environment people enjoy being part of.
  • Hold an annual event for all employees, such as a company picnic, bowling party, or other family-oriented gathering.
  • Have someone who specializes in employee training (human resources, director of training, etc.).
  • Provide a clear path for career advancement (management training), as well as personal growth (continuing education, GED, ESL, etc.) for hourly employees; consider outside training and coaching for managers.
  • Use technology (computer-based training, DVDs, online) to save time and provide uniform, ongoing training.
  • Treat management like owners (and front-line employees as well) by providing bonuses based on performance or attendance; show them how their actions affect your business; consider opening the books (at least partially).
  • Provide generous benefits if you can afford to, especially health care.
  • Treat employees the way they want, not how you think they want to be treated.
  • Perhaps most important, there is a strong body of research, as well as expert opinion, that recognition, the idea that how an employee feels they are treated is more important than all other factors in their decision to remain -- even money. Awards, gifts, and "employee of the month" campaigns can go a long way to motivate and retain employees.

Says one franchisee with about 60 Jack in the Box restaurants and more than 1,000 employees, "We keep them through how we treat them."

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23.7: Franchisee Perspectives on Employee Retention

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