Low Unemployment Rates Can Spell Trouble For Franchisees

Unemployment rates are at an all-time historic low. This is good news for many multi-unit franchisee owners because their people are sticking with them and not jumping from job to job, right? Actually, it's just the opposite. Multi-unit franchisees and business owners alike should heed warning because the competition to recruit the best employees is as tight as it has ever been. With more jobs available it means that unhappy or unengaged employees could be looking for a better company fit.

We all know the cost of losing a key employee is more than just the dollars and cents. When they leave they take with them the intangibles that are hard to replace, including history, knowledge, and expertise. There is also the disruption to the business and profitability when a key employee leaves, not to mention the shock to you as the owner because you had no idea they intended to leave. And, to be fair, they may not have been actively looking but when the job market is as tight as it is, competition is not just going after your customers.

In order to protect yourself from an unexpected departure or from competitors poaching your key talent you have to ensure you have, or are willing to build, a winning culture. No longer are salary and title enough to attract or encourage key talent to stay. You have to create an environment where employees want to work. With that, all businesses have either an implied or expressed culture which influences employee commitment, performance standards, and accountability.

In an implied culture, you will often find that individuals create their own interpretation of the behavior and attitudes required to please their respective supervisors. Simply stated, employees in these situations will do whatever necessary to survive. This creates an environment of self-interest rather than one where an employee feels they are valued. Every department or leader creates their own culture to serve their interests, not the interests of the organization, which ultimately creates turf war and conflict between managers and teams - making it easier for employees to jump ship.

In an expressed culture, there is a mission and vision that unifies the organization across units and brands. Acceptable behaviors and attitudes are coached and celebrated reinforcing non-negotiables in the organization. This means, if you were to go into 5 or 6 of your different stores, you would get a consistent message when asked "What is our mission?" You would also see the mission and core values practiced in the behaviors and attitudes of all your employees.

So why should you care about ensuring you have an expressed culture? Three simple reasons:

1. Cost savings in reduced turnover costs and enhanced teamwork
2. Teamwork leads to enhanced performance which then leads to the final reason...
3. A stronger bottom line

How do you determine if you have an expressed culture? Take stock by identifying the following:

• Have you identified and are you committed to certain non-negotiables?
• Do you have established core values and core operating procedures?
• Are there reasonable performance expectations and are they understood by your people?
• Does your culture emphasize accountability?
• Is there an established vision for business development and growth?
• Is there a budget dedicated to training, technology, and facilities?
• Do you have a strategy for recruiting, training, and retaining highly qualified support management?
• Is there a program in place to mentor replacements for every critical management position?

Absence of these characteristics means not only will you struggle to know who your employees really are and what kind of talents, values, or common principles they share, but they will not be able to reach performance standards. All pointing to costly turnover in your franchise organization.

 Kendall Rawls knows and understands the challenges that impact the success of an entrepreneurial owned business. Her unique perspective comes not only from her educational background; but, more importantly, from her experience as a second-generation family member employee of The Rawls Group - Business Succession Planners. For more information, visit www.rawlsgroup.com or email info@rawlsgroup.com.