Desired Incentives Hook Franchise Employees
By Lisa Barringer, Franchise Guardian® Writer
Hiring and retaining franchise employees during a struggling economy is like fishing ̶ you need quality bait to reel in a great catch. Knowing what bait to dangle on the recruitment hook is crucial, according to hiring experts.
“If you want to get a grouper, you put grouper bait on the hook to catch the fish you want,” explains Small Business Consultant Patti Guerzo, of Florida Gulf Coast University’s Small Business Development Center. “That way, the fish you don’t want aren’t attracted and they leave you alone.”
What hiring incentives should franchises offer to attract the right employees? Try sought-after tangibles such as decent pay, job flexibility and whatever else is available to hires.
“Right now, you have to advertise all of the good things,” Guerzo said.
The good things, according to Guerzo, include a competitive, sustainable annual salary (instead of a substantially low hourly wage) and paid time off during holidays. Include those incentives in a well-written job ad targeting the type of personality that fits a position.
“If you want to have someone whose job is to open and close the office every day from 9 a.m. to 5 p.m., then you write the ad to pull people in and use that ad to attract that type of person you’re looking for,” Guerzo said. Posting an obscure, generalized employment ad, such as “hiring for all shifts,” is not a good recruitment strategy, she stressed.
“Recruiting is a buyer’s market,” Guerzo said. “In certain markets, there are more jobs than people, so it is important to differentiate yourself in the ad.”
That may require help. Guerzo suggests outsourcing recruitment efforts, especially for businesses ill-equipped to do it themselves.
Franchises, Hold on to Your Job Catch
After finding good franchise employees; retaining them can be another challenge. However, with the right bait, a franchisee can turn a dwindling labor pool into a teeming one.
Guerzo recommends setting employee retention goals that offer rewards, signing bonuses or a non-compete agreement to new hires.
“Give them a reward as they’re getting trained; rewards like free lunch or sending dinner home for the family,” she said. “It doesn’t have to be expensive. I would be talking to them about Christmas bonuses. You’re dangling future carrots, so they know to stick around.”
Summer Pommier, co-owner of the Samurai Lunch Box mobile food trailer in Portland, Oregon, knows first-hand that rewarding employees is the key to keeping them. She’s held on to quality workers even during the COVID-19 pandemic and in a market plagued by high employee turnover. Her secret?
“One of my goals as an employer, from the start, was to retain staff longer than is typical for the restaurant industry,” Pommier said. “I have always believed in providing my employees as much as I could afford. This includes a strong hourly wage, tip-splits and benefits. Given how small I am, the only benefit I can provide is six paid holidays per year and a week of unpaid time off, but my employees make, on average, between $16-$22 an hour with their tips.”
What she can’t offer in dollars and cents, she makes up in employee inclusion and moral support.
“I strive to create a team environment where we feel a sense of loyalty to our co-workers and our customers,” Pommier said. “I do this primarily by sharing the successes and challenges with my staff. I share all of our reviews (most are extremely favorable). I ask their perspective on new roll-outs or changes. I coach them regularly. I promote their personal and professional goals.”
Her strategies seem to work, considering that two-thirds of the Samurai Lunch Box staff have surpassed their one-year mark. One employee is entering his two-year anniversary, according to Pommier.
Like her, other franchisors understand that employee loyalty comes with a hefty price that they’re willing to pay, and by any means necessary.
Gary DaCosta, owner of the DaBomb Sports Bar Grill franchise in Lithonia, Georgia, has devised a tip-splitting plan to ensure that all of his employees are fairly compensated, happy and committed to their jobs. DaBomb kitchen and bar staffers get a nightly cut of the servers’ sales, which easily amass thanks to automatic gratuity that DaCosta set up on takeout orders (5%), bottle services (18%) and on serving dinner parties of four or more (15%).
“Two percent of the servers’ sales go to the bar; 1% to the kitchen,” DaCosta said. “It comes directly from the servers; they make 25% to 30% of the sales.”
Get Help to Retain Franchise Employees
Since the federal Paycheck Protection Program for small businesses ended in May 2021, some franchise owners can’t afford to pull more cash out of the profit bag to keep employees. That exhausted program afforded loans to qualifying small businesses that struggled with employee retention during the pandemic. There’s still hope, though.
The Economic Injury Disaster Loan or EIDL helps small businesses with operating expenses that could have been met if it weren’t for COVID-19. EIDL offers a maximum loan amount of $500,000 to any business that meets the borrower’s criteria.
“Normally, it’s used for hurricanes and other natural disasters, but since COVID was a national disaster, the government is using EIDL to help qualifying businesses,” said Small Business Advisor II Suzanne Specht, of the SBDC at FGCU.
Franchise Guardian helps franchise owners identify and apply for business loans and locate any other funding needed to start and maintain their businesses. For assistance, contact Franchise Guardian at firstname.lastname@example.org.