Hiring Trends Impacting the Franchise Workplace

January 09, 2017

Competition for talent is heating up as jobless rates fall and more businesses vie for potential candidates.

By Adam Robinson

When it comes to growth, the franchise industry continues to drive more and more attention. Over the past year, economic forecasts from the International Franchise Association predicted that the franchise industry would see a 1.7 percent growth, bringing the total number of U.S. franchises to nearly 800,000 systems across the country. Additionally, the number of jobs with franchised businesses has shown a steady increase, reaching 3.1 percent in the past five years.

Even with this positive news, the industry faces an uncertain path with the implementation of new federal regulations — related to the National Labor Relations Board’s joint employer decision — making it more important than ever for franchisors and franchisees to optimize the areas of their businesses that they can control.

Creating a high-performing team has long been an area where a business needs to stay ahead of trends in order to remain competitive when vying for talented candidates. Throughout 2017, look for franchisors and franchise-owned businesses to put increased focus on their internal hiring process as a strategy to keep their businesses competitive in the face of a fluid and evolving hiring landscape.

Joint employer: New era for employers

The joint-employer ruling has the potential to greatly impact emerging and established franchise brands and derail recent economic growth in the sector. If allowed by the incoming administration to go into effect, franchisees will see increased costs associated with running their franchise and a decrease in control of day-to-day operations. Before the ruling, franchisees handled conditions of employment including hiring, firing, supervision, advancement, etc., but now franchisors may be forced to step in to reduce the risks associated with litigation, forcing them to take the reins when it comes to managing employees.

Franchisors may be deemed to have indirect control over systems and processes for controlling employment and handling staffing issues. Even with the uncertainty, franchisors and franchisees can take solace in the fact that the ruling isn’t likely to destroy the established franchise business model. The ruling will have a ripple effect on processes associated with the hiring, firing and morale of your team. Therefore, the franchisees themselves must have more focus on their processes for attracting and retaining meaningful talent.

Aligning recruitment strategies

More small businesses will be focused on portraying an authentic image to interested candidates and, by extension, creating a hiring process that is more streamlined from start to finish. These days, candidates have a surplus of online forums and review sites where prospective and former employees can voice their opinion about a company’s hiring process or lack thereof. That positive or negative review can be the difference between whether a candidate applies for an open position with your business or not.

This dynamic can be especially damaging for an emerging franchise brand lacking a solid recruitment strategy or track record of success with employees. It’s imperative that the culture you’ve conveyed through your job descriptions and your employment application process be consistent with the interview experience. Hiring managers must become more responsive and transparent with candidates throughout the process to ensure the overall experience is positive, whether they get the job or not.

Annual performance reviews

Traditionally, an important component of employee development has been the annual employee review. As company cultures and employee demographics have shifted, it has become an outdated method for evaluation. This shift can be boiled down to a few key motivators: the growing influence of a younger workforce and the prevalence of social media in our lives. Studies have found that the average person checks their phone 46 times a day. Next-generation employees spend a majority of their time interacting on social media, posting information and getting instant feedback from their friends and followers.

These online social media habits have started to bleed over into our professional lives where employees are hungry for superiors to give them praise and constructive feedback on a regular basis. Millennials are concerned with how they are performing at that instant and how that performance grade impacts their potential for advancement.

That evaluation process begins from the moment the employee is brought on board and establishes a starting point from which managers can evaluate employees on a project basis. Without that initiation into your team, it’s easier for an employee’s progress and development to slip through the cracks and result in costly turnover.

Millennials and Gen-Z

The Millennial Generation — currently 83 million strong — represents the future of your business. As they take up a larger chunk of the workforce, the presence of the social media generation has done much to disrupt how businesses have traditionally developed employees. Close on their heels are the Gen-Z employees. Just as hiring managers have adapted their work cultures and hiring practices to the Millennials, the next generation is arriving and shaking things up even more.

There are many similarities and differences between the two demographics. Both grew up with the internet but Gen-Z brings a different set of skills to the workplace. Gen-Zers understand that social media is continually evolving and are more eager to embrace new methods. That means slower recruiting channels — like email — may soon be a thing of the past.

From a recruiting standpoint, franchised businesses can appeal to these types of candidates by tapping into their desire for fulfilling work. From a branding standpoint, companies can cater to this need by emphasizing the purpose inherent in the available position.

Businesses will struggle with attracting this type of employee through traditional job posting methods, where you simply list desired skillsets and job responsibilities. Instead, companies that will have the most luck in attracting those younger, highly motivated employees will adopt job descriptions that convey your company’s culture and the position’s “higher purpose.”

More difficulty attracting talent

Competition for talent is heating up as jobless rates fall and more businesses vie for potential candidates. Franchisors and franchisees will need to invest more of their time and effort into streamlining their hiring process and building a brand that is attractive to potential applicants. How your business builds its brand will determine your hiring success in the long term.

Adam Robinson is the Co-Founder and CEO of Hireology. Founded in 2010, Hireology’s hiring platform is in use with over 100 franchise clients and more than 2,000 franchisees.