Leadership Challenges: The Difference Between Hiring and Recruiting
Effective leadership can often feel like a mirage, something you aspire to but often seems fleeting. People are fickle. As soon as experts proclaim they have figured out “what people want,” a new generation enters the workforce with different wants, needs, and motivations. With this comes the ever-evolving leadership and succession planning challenges business owners face in their organizations. Until recently, franchise owners were not as challenged, but now you are no longer immune, especially when looking to grow your organizations.
Working with franchise owners, our very own succession planner with The Rawls Group, Jeff Bannon, shared perspective on how franchisees have historically approached the talent conundrum. He has found that many organizations hire rather than recruit. The hiring process addresses the fulfillment of an immediate need rather than an intentional investment toward a long term goal. He believes hiring is typically based on past performance or potential talent, not attitude, behavior, and work ethic. High turnover is most commonly the result of poor cultural fits, which reflects in performance and behaviors. Many in the younger generations have expressed a need to “buy-in” to a larger goal impacting something bigger than themselves. The buy-in will reflect their cultural fit, and their retention will reflect their perceived opportunity to grow into a more impactful role. Adding to the challenge is the fact that society has adopted an expectation of immediate gratification, which means that employers have more pressure on them to provide a vision for upward mobility in order to appease highly motivated employees. The idea of “earning it” often has a shorter cycle than the previous generation would agree with.
Bannon reminds us that we also need to remember that leaders are developed, not born. So hiring an individual, providing a pay plan and job description is just the first step. Whether intentional leadership training happens internally or externally via independent consultants, it is critical to ongoing profitability. These are all concerns we frequently hear from multi-unit franchisee owners working to overcome the leadership conundrum. This begs the question, “Where is the good talent?” and with this, the challenges of how to get your people to step up to the plate, care about the team more than themselves, take on an ownership mentality, and become entrepreneurially inspired to want to make an impact on the community around them.
We asked Aicha Bascaro, CEO and founder of the American Franchise Academy to provide her perspective on the leadership landscape of the franchise industry. In her words, “There is a leadership crisis in the franchise industry.” We asked Bascaro to elaborate. Here are some eye-opening statistics she shared:
- Turnover in the retail franchise industry averages 150% annually
- Too many Millennials want to go from college to Business Managers with no experience or practical knowledge
- The failure of new managers has increased because business owners are promoting managers before they are ready
- Entrepreneurs see bench planning as an afterthought, because they are too consumed by the day to day management and not enough in the strategic planning of their business
Bascaro says that finding the right leaders is getting more and more difficult every day. From unit managers to district managers to director of operations, she sees it first-hand with her clients and that is why a big part of the work she does is helping franchise owners define their people strategic plan to make sure they have the bench they need to account for turnover, future growth, and leadership needs.
Working with franchisees, she understands the desire to go from owning one unit that became a job, to owning multiple-units and being business owners. Bascaro believes that this growth is being challenged by the lack of ability to find and retain quality high-potential individuals who are willing to start from the bottom and work their way up the ranks to leadership positions. Hiring from the outside is costly and very risky and the success rate with external hires is much lower than with internal bench strength.
We agree with Bascaro that the ability to find great people, retain them, and develop them into future leaders is a critical skill for current entrepreneurs. Many franchisees are not giving it the attention it needs, which continues to cause the revolving door of turnover and leadership vacancies in their organizations. We are also finding franchisees running from the concept of succession planning because they feel it is only about estate planning and retirement. Really what they are doing is halting the opportunity to think forward about the vision and future needs of their organization, minimizing its growth and value opportunities.
Here’s what Bascaro suggests for franchisees having a leadership challenge in their organizations:
- See all their current staff as potential future Managers, District Managers, and Ops Directors, and treat them as such
- Make sure that their stores are fully staffed and properly trained
- Maintain a manager roster that includes training levels, performance level, and leadership potential
- Have a leadership development internal program or reach out to external sources for help
- Promote from within so that existing staff can see that they do have growth possibility and that will incentivize them to stay in your organization
- Make sure that you are also the leader that people are looking for, have a positive work environment and a company culture in which people want to work
The foundation of what we believe in and the work that we do at The Rawls Group starts with your people. We strongly encourage you to consider your leadership team and identify if you have what it requires to take your franchise into the future. To learn more about Bascaro’s approach or her background and expertise you can reach out to her at email@example.com or visit www.AmericanFranchiseAcademy.com.
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