Of all the talent challenges that franchise businesses are currently facing, the most pressing one is the sheer difficulty of attracting and hiring quality employees.

Over two-thirds of franchise brands reported that they don’t have enough qualified applicants for open positions.

This problem is exacerbated by high turnover rates. In 2022, only 54% of QSR employees lasted 90 days on the job. High turnover rates create a constant cycle of hiring and training, leading to significant expenses and disruption to the team.

Consistency and brand experience are critical to franchise models, so if these issues go unaddressed, they pose a direct threat to customer experience and brand loyalty. 

Franchise companies have made strides to attract new talent by offering enhanced benefits and wages, introducing flexible scheduling and emphasizing a collegial company culture. While these tactics can provide temporary relief, they don’t offer a long-term solution for understaffing and high turnover. 

Increased wages
Higher wages are a step in the right direction, but they also make it easy for competitors to quickly match or exceed the offerings, which can lead to an escalation of costs. Higher wages can’t be the only way to attract new talent in a competitive market, as they aren’t a sustainable long-term solution. 

Flexible scheduling
Flexible scheduling is another attractive benefit to candidates in the current job landscape. But this can be challenging to implement in certain franchise models that rely on strict production timelines and customer interaction. Franchises need to strike a balance between offering flexibility and meeting customer demand. 

Company culture
A positive company culture is vital, but not if it lacks authenticity. Superficial attempts to project a positive image do not address underlying issues. A genuinely positive company culture is also built on competitive wages and access to growth opportunities.

Tuition reimbursement 
Tuition reimbursement can be a great benefit for employees who want to advance their education at a lower cost. However, only 2% of employees take advantage of tuition reimbursement programs, as most employees can’t shoulder the upfront tuition costs and wait to be reimbursed later. Additionally, these programs often don’t address the franchise’s most pressing skills needs and as a result, don’t impact retention.

Because franchisees vary widely in their practices, employee benefits can be inconsistent. And without comprehensive benefits in place, things like employee development programs tend to fall by the wayside. 

But not having a robust employee development program in place can increase staff turnover rates. When employees aren’t given opportunities to advance their careers, their engagement and commitment to the company drop. And when those employees leave, replacing them can cost anywhere from 1.5 to 2 times an employee's annual salary.

On the other hand, investing in employee development can lead to a 58% increase in employee retention and even increase worker productivity.

It’s in the best interest of the franchisor to ensure that their franchisees have the resources to foster employee development. While franchisees ultimately own the decision to offer certain benefits to their employees, franchisors can lay the groundwork by making employee development programs available and easily accessible in the first place.

A successful employee development program hinges on three key features:

Employee development can lead to short-term retention as well. Many businesses know that their frontline workers aren’t going to work there forever. But even increasing employee tenure from 3 months to 12 months is significantly better for the bottom line.

Today’s talent challenges need sustainable, long-term solutions, which is why traditional benefit offerings today fall short. These talent challenges are even more acute with franchise business models. 

By investing in employee development, franchisors can ensure a more stable and committed workforce, ultimately bolstering customer experience and fostering enduring brand loyalty across both corporate and franchise-owned stores.

More resources for franchise businesses: Workforce education can be a powerful driver of talent outcomes. But how do you develop a program that meets the needs of your unique franchise system

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