Combat the Revolving Door: 5 Signs You're Driving Away Top Talent

When franchisors lead by example by setting the right culture for employees and recruit franchisees to align with similar core values who will implement best practices within their independently-owned locations, all parties benefit from higher retention.

By Adam Robinson

Employee turnover is costly. At the corporate franchisor level, finding individuals who fit with your home office culture who understand how franchise systems operate can be challenging. Recruiting and training “replacements” cost time, money and productivity. At the store level, your franchisees likely feel the pain of turnover on a regular basis, negatively impacting their bottom line.

Low retention rates are often the byproduct of a combination of internal and external factors, including economic climate. The national unemployment rate is under 5 percent — the lowest it has been in over a decade, according to the U.S. Department of Labor. While this is obviously good for businesses as they experience growth, it could negatively impact retention rates. Why? Employees are more inclined to leave if the job market is strong, as they have peace of mind they will be able to find work elsewhere.

While there’s little you can do to control external factors like job market conditions, there are plenty of changes you can make internally to help combat the revolving door. Here are some ways your franchisees may be contributing to high turnover at their stores. Similarly, you may be doing some of these things at the corporate level without realizing it

You have a manufactured culture

Your office may have the accouterments of a great culture, but feel none of the energy. Do you have an open-layout office design, yet nobody talks to one another? Creating the environment you want and finding the right employees to uphold your company culture are essential. Your franchisees will also be creating their own individual atmospheres, so make sure they have the right qualifications to uphold the culture you want.

Be sure to write concise, specific job descriptions that ask for different quantitative components, like years of experience, in addition to different qualitative factors. This could be anything from adaptability to entrepreneurial spirit and good interpersonal skills.

Your core values lack authenticity

If your employees fit your company culture, they will likely have much higher job satisfaction and be invested in your business long-term. When screening candidates, move forward with those whose personal ideology aligns well with your core values. Finding candidates whose personalities match your company culture is usually an indication that they have a similar value system as you, which is why culture fit is so crucial.

Although your core values may not be on your mind on a daily basis, they should continue to be a priority as your company grows and develops. Make sure you stay true to your core values within the franchisor office and that all your employees live and breathe the core values each day. Similarly, when recruiting franchisees, you should ensure all candidates fully understand and align with the values so they ultimately permeate throughout your system at the unit level.

You should be willing to fire a top performer for violating a core principle. Otherwise, your company ethics are just superficial soundbites that nobody really believes.

You don’t have a clear mission and vision

Lacking a clear mission and vision is another sure-fire way to lose good employees. In addition to solid values and company culture, you need to be able to convey your employees’ place and importance within your business. You do not want them to feel like another cog in the machine, especially since the success of your company is directly contingent upon their individual successes.

Make sure employees understand how they impact your business as a whole. They should know they are appreciated. Set up promotions, contests and other incentives so they feel rewarded and continue to have goals within your company. Employees need to see a track of upward mobility and different checkpoints to work toward to stay motivated to grow with your company.

If an employee starts to feel neglected, this is oftentimes one of the first internal signs they need to move on. Make sure they understand their importance and value within your company while still offering them opportunities to grow. Your franchisees should do the same with their employees.

Not everyone knows how you sell

A Harvard Business School study found that 71 percent of employees couldn’t explain their company’s go-to market strategy. Your employees can’t perform at their peak if they don’t understand your objectives. Involving employees in developing your business plan is one of the most straightforward ways to ensure they understand your overall strategy. This will help them be more efficient and productive, while also allowing for cohesion and collaboration within your company. Also highlight your company’s market strategy in new employee training, and communicate transparently if you plan on making a change in your strategic direction.

Your onboarding process is inadequate

Onboarding is the process of agreeing to expectations between you and your new employee. This should be a mutual promise of what you expect in terms of performance, and what your new team member can expect from you. The onboarding process should take around 90 days, including multiple steps and check-ins with the employee throughout.

According to a recent study by Recruiter.com, 75 percent of employees who were satisfied with their organization’s onboarding reported being loyal to their employer. They were also twice as likely to feel comfortable within their job after their first year. Onboarding sets the tone for how the rest of an employee’s time at the company will be, and it’s important to make a good first impression. Your onboarding process should be relaxed but comprehensive, with enough training to make your new employee feel comfortable in their role.

You can’t keep every employee forever. In many cases, it may be good for certain employees to move on. But you can create an internal culture that is conducive to making people want to stay. Having a clearly-defined and communicated culture, values and strategy is paramount. When franchisors lead by example by setting the right culture for employees at their corporate office, recruit franchisees to align with similar core values who will implement best practices within their independently-owned locations, all parties benefit from higher retention.

Adam Robinson is the co-founder and CEO of Hireology. He's the author of 'The Best Team Wins: Build Your Business Through Predictive Hiring.' Find out more about Hireology at franchise.org/hireology-inc-supplier.