Franchise Talent War: Which Brands Will Win and Which Will Be Left Behind?
New Study of Employee Engagement in the Franchise Sector Reveals Key Insights
As the U.S. labor market continues its upheaval this summer, new employee data from Franchise Business Review suggests bright spots for some franchise sectors and brands. Franchise Business Review recently completed the annual [email protected] employee engagement study, collecting feedback from over 4,000 employees.
The initial findings revealed employee engagement and satisfaction remain very high across corporate franchise roles, as well as many frontline staff.
- Overall, FBR’s 2021 [email protected] Employee Engagement Index score of 79 was down just 1% from pre-pandemic levels (compared to the 2019 benchmark of 80).
- 85% of employees state that their job is rewarding and satisfying and 79% would recommend their company to a friend.
- Compensation remains strong with nearly two out of three employees (60%) reporting getting a raise this past year, while just 12% indicated that their pay had declined.
- Highest employee engagement rates by industry vs benchmark:
- Cleaning & Maintenance (+6%)
- Business Services (+5%)
- Fitness (+5%)
- Lowest employee engagement rates by industry vs benchmark:
- Hotels & Lodging (-18%)
- Personal Services – haircare/massage/etc. (-15%)
- Covid-related Impacts on Corporate Employees
- 82% of employees reported staying “well connected” with their manager while working remotely.
- 57% of employees say they were MORE productive while working remotely, and another 30% said they had NO CHANGE in productivity. Just 13% felt they were less productive while working remotely.
- And managers agree… 49% of managers said their direct reports were MORE productive while working remotely, while another 35% said there was no change in productivity. Just 16% of managers noticed a drop in productivity from their teams.
- Two out three employees (67%) said that they would prefer to stay working fully remote post-pandemic.
Winning the Talent War
Recruiting and retaining employees was challenging pre-pandemic. Now, it’s nearly impossible for some organizations, as work/life balance, job flexibility (i.e. remote work), and higher wages have become top priorities. Nowhere is this more true than in the hospitality industry. Restaurant and hotel workers led the way in spring resignations. Just in April, the U.S. Department of Labor reported that millions of people quit their jobs, with more than 740,000 of those jobs in the hospitality and leisure industries.
People in lower paying jobs are leaving for better pay. Work/life balance played a role, as did other factors including safety, stressful working conditions, long hours, long commutes, and lack of childcare.
Fed up with unfulfilling jobs, the pandemic has given everyone time to reflect on their careers, and people are flocking (pun intended) to new jobs they are passionate about. Take Wild Birds Unlimited for example. One silver lining of the last year and half: people have rediscovered the outdoors. As a result, the nature retailer – whose mission is “to spread joy” – has experienced solid growth across their network of 350+ franchise locations.
To support that growth, Wild Birds Unlimited has been recruiting and hiring new staff with an intent focus on culture.
“We hired 12 new corporate staff members over the past 16 months to keep pace with the growth of our system,” said Wild Birds Unlimited COO Pat Perkinson. “Fortunately, we have not struggled to find great people but have had to focus with intensity on the onboarding process, making the culture come alive for them and making them feel part of the team.”
When asked if wage increases have been part of their recruitment process for retail store staff, Wild Birds Unlimited Director of Coaching Support, Christa Anderson said, “Absolutely, to be competitive and also to retain existing talent, but it’s only part of the package. Small businesses cannot compete with larger company wage offerings alone. We encourage franchise owners to promote the intangible benefits such as the work environment, the opportunity to bring joy to customers, and their direct contributions to the betterment of nature.”
Clearly, the national labor shortage has touched every company at some level. That said, brands that were focused on building a strong culture prior to the pandemic have fared far better over the past year.
“Jason’s Deli has been in business since 1976 and our founder, Joe Tortorice, was always such a positive example for us which set the tone for our strong culture,” said Michele Kemplay, Director of Human Resources for Jason’s Deli. “He believed in a set of core values and taught us the concept of Servant Leadership. We believe if we serve others and help people get what they want they will thrive and, in turn, the company will thrive. We set that tone on the company level and then it’s up to each Managing Partner to set that tone in his/her deli.”
While Jason’s and Wild Birds Unlimited have had their share of staffing challenges, the companies have maintained extremely high levels of employee engagement right through the pandemic. In fact, both Jason’s Deli and Wild Birds Unlimited were named a 2021 [email protected] award finalist for the second year in a row for their outstanding employee engagement.
The battle over top talent will continue for the foreseeable future, but many franchise companies are well positioned to win. Learn more about the 2021 [email protected] project and how to benchmark your company’s employee engagement system-wide here.
This article originally appeared in Franchise Update, September 2021 issue.
[email protected] Report: Employee Engagement & Compensation Study
Read the full report to learn the detailed findings of the study, including:
- Which franchise employees are least satisfied
- Where does the biggest pay gap exist?
- What’s the biggest factor in employee retention (Hint: It isn’t money)