Hiring and Retaining Employees in Today's Tight Labor Market, Part 2

We asked four battle-tested franchisees to weigh in on the state of today’s labor landscape and how they are leveraging technology, flexible scheduling, wages, and benefits to maintain a culture where people want to work for them – and build a bench to prepare for future growth:

• Fred Punke of Punke Holdings, 30 Supercuts and Cost Cutters in Indiana and Kentucky

• David R. Blackburn, CEO and COO of Southern Rock Restaurants, the largest franchisee of McAlister’s Deli

• Joshua Morris, co-founder of Blu Water Brew, with Scooter’s Coffee locations spread across Iowa, Minnesota, and Texas

• Brian Pyle, CEO of ERC Management, who operates 20 Freddy’s Frozen Custard & Steakburgers in Colorado and Alabama

Part 1 here, asked them two questions: 1) In what ways did the pandemic make it harder for you to find employees?; and 2) What are some of the ways you found to keep your employees engaged and committed? Part 3 coming next issue.

How did you find employees to replace those you lost?

Fred Punke (Supercuts, Cost Cutters): Our initial retention after opening back up after lockdown was nearly 95% because we put a lot of work into employee engagement. However, over time we lost people and started using technology paired with old-school “feet on the street” recruiting efforts to build a candidate pool.

David R. Blackburn (McAlister’s Deli): We greatly increased the compensation and owned the headlines of recruiting ads with incentives where needed.

Joshua Morris (Scooter’s Coffee): We are constantly recruiting, making more creative job posts and refreshing them so they stay closer to the top. We use a referral bonus after the new employee completes training and time with the company. I tell our managers that if you are always recruiting, you will be ready for unforeseen turnover. We always hire a good candidate no matter our staffing situation. We will find room. Having a quick initial application process is crucial in our industry. Onboarding is streamlined so we can get employees started quickly.

Brian Pyle (Freddy’s): We use a third-party platform. We do a lot of text-to-hire QR codes. We’ve started doing YouTube and TikTok advertising to get the younger generation to see that we’re engaged and trying to engage with them for work. One of the things we’ve done as a company is to make hiring the most important thing. We’re all invested in finding that great talent, whether at the manager level or an hourly employee we are trying to recruit. We also market to the team currently working for us. If there is a friend of an employee we like, we want to reach out to them. We’ve implemented a program where an employee can receive some money for a referral.

The other thing we have done with that third-party app is to have hiring times throughout the entire day, basically our business hours. So if you need to come in at 9 a.m. or 8 p.m., we’re going to make sure we have someone there ready to interview you. We felt that having a wider time frame gives the applicant or interested employee more opportunities to be interviewed around their schedule, not our schedule. This past December, we had more applicants than in November, which was probably one of the first times we’ve seen that increase in applicant flow from the previous month.

Did you try any employee-retention strategies that simply failed?

Punke: Employee retention bonuses don’t seem to work in the long run. If an employee wants to leave for another job, giving them a nice bonus might keep them for a short while, but they still will leave. Building a great working environment with great managers is a much better strategy.

Blackburn: Over the years I have tried gift programs, meal programs, and just about anything else you can think of. At the end of the day, an employee’s take-home pay must meet their financial needs – not just the wage per hour, but how many hours they need. You must understand why they are working and need the money. An employee working for spending money or because mom and dad said so is much different from a single parent who has to provide for their family. Get to know your employees and work with them to provide not just income, but a safe and fun place to work.

Morris: We didn’t use any retention strategies that failed. What I would say is that you can’t just use one strategy. That will fail. Finding multiple ways to incentivize and build a fun culture goes a long way. For example, using a retention bonus can work, but it must bring ROI. Short-duration contests are a great way to keep things fun and engaging. Make it clear for everyone, measurable, and realistic.

What are you doing differently today attract and retain employees today compared with 3 years ago?

Punke: Spending more money on all aspects of recruiting than we ever have.

Blackburn: Paying much more and offering incentives to get someone to come and stay long enough to develop a relationship with our team so they can fully engage.

Morris: Emphasizing more with our store managers that we hire on the concept of traits over training. We need good people, not pre-trained baristas. Have your core values and do not deviate from those values.

Pyle: Every day, trying to get better. Three years ago, our training department really wasn’t where it is today. We now have a director of training who has people underneath her dedicated solely to training. Every store has a training manager with trainers. We’ve invested our time, energy, and resources into training because we feel that if we train you correctly, we’re giving you the best chance to be successful in our company. And when you know how to do a job and how to do it well, you’re more likely to be happy in that job, as long as other factors are in play (culture, relationships, and benefits). We constantly evaluate and make sure we are staying competitive.

What role has technology played in strengthening your bench?

Pyle: It’s been key for us, like the third-party text hire technology I mentioned. It’s an automated confirmation, so we don’t have to get involved in scheduling the interview. It allows you to click a link if you’re interested and select from the available times. Then we send a follow-up text that thanks you for scheduling your appointment at our local “X” location. We still have the challenges of people not showing up, but we’ve eliminated some of the communication time it takes for managers – who are short-staffed and busy running our stores – to schedule that interview.

Next time, part 3 of 3: Do you think the change in the employee landscape is here to stay? What are two “best practices” you rely on for hiring and retaining great employees in 2022? Anything else you recommend when it comes to hiring and retaining employees today?