How to Support Franchisees Facing a Labor Shortage

With some sectors struggling to hire, how can franchisors create a culture that attracts employees to their brand?

The headlines, and many of the franchisors we’ve spoken with over the past year, are full of stories highlighting the challenges the food and hospitality sectors have faced throughout the pandemic. Restaurants that already catered to take-out, drive-thru, and delivery were able to thrive in many cases, but others struggled to survive and some were forced to lay off a majority of their staff or shutter permanently.

With the economy bouncing back, the challenge now for restaurants and other heavily impacted sectors in the service industry, like travel, hospitality, and retail, is finding enough qualified staff to operate. Is the Restaurant Industry Facing a Hiring Crisis?, recently published by QSR magazine, reports that 40 percent of restaurants said they’re “severely understaffed.” Business Insider reported that 7-11 franchisees recently sent a letter to corporate leadership saying that the labor shortage is creating a “very dire” situation. The travel and hospitality sector also faces shortages as consumer demand surges, while foreign workers who often fill seasonal positions are unable or unwilling to come to the U.S.

Restaurant Manifesto echoed it in The Restaurant Labor Shortage Was Inevitable, pointing out that with expanded unemployment benefits and stimulus checks, many restaurant workers are making more money not working. Still others relocated to places with places with fewer public health restrictions and more jobs, and some left the restaurant industry altogether when jobs were scarce.

In 2019, unemployment rates were at historic lows, and top talent – both franchisees and employees – were hard to find and even harder to retain. At that time, Franchise Business Review conducted a formal study of employee engagement and compensation to identify benchmarks and trends among corporate franchise employees, both those who work for the franchise HQ as well as frontline workers in corporate-owned locations.

The [email protected] survey asked franchise employees 24 core benchmark questions related to job satisfaction, engagement, management, brand leadership, and culture, as well as detailed personal questions about their position, compensation, benefits, and demographics. 

From the research, some key findings emerged, namely that overall satisfaction is high (90%) but there is work to be done around some of the lowest rated areas, including compensation, recognition, long-term career opportunity, and communication from leadership. These all speak to the overall culture of the organization. In 2021, the increased risk of contracting the virus from customers and social justice issues have only magnified the importance of workplace culture.

Create a Culture Where Employees Want to Work

Many franchises are offering incentives like signing bonuses and tuition assistance programs, which are helpful for attracting employees. But once they’re in the door, how can you ensure the workplace culture is such that employees are satisfied, engaged, and aligned with your mission?

1. Make it top-down. The culture of the entire organization is set by corporate leadership and should be a priority for the C-suite. Culture isn’t just a written set of values posted on the wall, franchise leadership needs to “walk the talk”. When leaders practice a positive culture and make decisions based on the core values of the organization, it sets the expectation that corporate employees, franchisees, and franchisees’ employees will too.

2. Provide support. Leaders and managers need to set the expectation that meeting the needs of employees, developing their potential, and creating an environment that emphasizes passion and teamwork is of the utmost priority. Especially now, when employees are being asked to do things like monitor customers’ compliance with mask policies, lug heavy trays to an outdoor dining space, or take on additional cleaning and sanitizing measures, they need to be given proper training, and more importantly, feel supported and appreciated.

3. Prioritize safety. Employees who interact with customers face-to-face are at increased risk of contracting the virus, and with herd immunity in the U.S. now reported as unlikely to be attainable through vaccination efforts, employees need to trust that appropriate protocols are implemented to keep them safe. Communicate clearly what measures you’re taking and what the expectations are for maintaining a safe environment.

4. Address issues that matter to employees. The past year has seen the calls for social justice grow increasingly louder. Acknowledging that social issues and diversity and inclusion are important to employees, and creating an environment in which co-workers, employees, and fellow franchisees are seen and heard shows empathy. James Dwiggins, CEO of NextHome, told FBR in a recent interview, “Those things are difficult because the easy route is to say nothing. The hard route is to take your position. Again, I feel as a company when you are willing to do that, you show more character and you’ll actually attract people that want to be part of that.”

5. Show recognition. Encourage franchisees to thank employees for the work they do, either through formal recognition programs set up at the corporate level, and/or by developing their own rewards and recognition programs. Making team members feel valued, even if it’s just a public thank you for a job well-done, goes a long way toward engagement and loyalty. 

6. Understand where gaps exist. Do franchisees have an accurate sense of how well they’re currently engaging employees and where they fall short – according to the employees? Are their hiring and retention efforts effective? It’s important to document and measure employee engagement so you can see where there’s room for improvement and track how well your programs are working. Michelle Kemplay, director of human resources at Jason’s Deli, says, “We encourage (managers) to celebrate the wins and create a plan of action for opportunities. Our expectation is to see improvement over the last survey. Our turnover is far less than the industry average both on the hourly employee side, as well as management side. We partly attribute that to being a listening company, especially (related) to the feedback we receive on the surveys.” Franchise Business Review’s [email protected] program is designed specifically to help franchisees benchmark employee engagement and monitor manager and staff performance across all of their locations.

Creating a positive culture is essential to your brand reputation. By setting the tone at the corporate level, franchisees will also benefit. They’ll end up with more engaged and more loyal workers, and in turn, more job candidates will be attracted to working in a place where others are happy and committed to their jobs. 

Learn more about how you can help franchisees measure employee satisfaction and engagement with Franchise Business Review’s [email protected] program. Contact us at [email protected].

Related Resource: The Ultimate Guide to Employee Engagement for Franchises

Employee engagement is critical to the success (or survival) of franchise organizations, but it’s becoming increasingly difficult to foster engagement.

Download your free eBook to learn how to:

• Recognize barriers holding employees back from fully engaging
• Create a supportive and engaging workplace culture
• Make engagement a key part of your hiring and retention strategy
• Measure and benchmark your team’s engagement against other franchise employers

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