Thanks to the Great Resignation, franchisors will find new opportunities and challenges in 2022
In 2021, more than 38 million people quit their jobs. As people try to figure out the root cause of this enduring trend, it’s no wonder Google has more than 1.4 billion hits for “The Great Resignation.” For franchisors, this can present an enormous opportunity, or it can present a significant challenge, both of which, if addressed appropriately, can lead to even greater success.
First, the opportunity. Many of those leaving their jobs are looking to start their own business and we can assume a fair proportion of them will do so through franchising. In fact, 5.4 million new business applications were filed in 2021, which is one million more than the year before. Many of these exiting employees have capital to invest and an eagerness to be their own boss and set their own future, so franchising is a tempting path.
Should you as a franchisor allow, or even encourage, your own employees to buy one of your franchises?
This raises the interesting question: Should you as a franchisor allow, or even encourage, your own employees to buy one of your franchises? The upside, you get a franchisee who already knows your brand well. The downside, you lose internal talent. It’s not at all unusual for those close to the franchise organization to express an interest in owning a franchise. After all, they have seen the business in operation, are already part of the culture, and, hopefully, have seen the brand prosper. The franchisor and the system likely already have credibility in their eyes, so you have already cleared one of the biggest hurdles in franchise sales.
But franchisors should be beware of the “pressure” to award a franchise to an employee or other insider. These candidates need to be vetted for the same hard and soft skills as any other candidate. The candidate must meet net worth and liquidity thresholds. And if these employee-candidates have had access to financial information, be sure they aren’t interpreting that as a promise of their future performance as a franchisee. But even if you do not award a franchise, there is no preventing people from moving on, and, thus, the challenging part comes into play.
The challenge. While the Great Resignation has benefitted numerous franchisors by supplying them with a pool of new candidates who are motivated to own their own business, it occasionally is causing franchisors some pain, as some of their own employees head for the greener pastures of franchise ownership. It will always be important for companies (especially franchisors) to concentrate on and celebrate sales; but retaining your valued staff members is equally important. Losing staff costs time and money and imposes additional burdens on your remaining team.
Driving toward success. Just as creating a franchise and its inherent sales process requires developing effective systems, the cultivation and retention of in-house talent can also be considered from a systemization perspective as well. And, as in franchise sales and development, this systematization should be done effectively, while still maintaining a “human touch” when dealing with human resources. One way to encourage new talent and hopefully manage turnover is for companies to strike a balance between systemization and innovation. Consider the development of formal onboarding processes, field consulting manuals, and internal organizational documentation (an internal operations manual if you will) to ensure that the Great Resignation does not force you to recreate your own Intellectual Property when a key employee leaves.
An organization needs to adhere to its core mission and persona
An organization needs to adhere to its core mission and persona, if you will, while at the same time avoiding the “that is how it has always been done” syndrome. This future-forward vision may not only help retain staff but can also encourage newer staff and perhaps help attract even more candidates when job openings do occur. One way to ease into this type of evolution is to express a willingness to test ideas brought in by new staff and to also encourage such innovation from existing staff.
So whether you’re dealing with an influx of potential franchisee candidates who are exiting other corporate careers, or managing the exodus of your own staff during these unprecedented times, you’ll need to make sure you have solid methods in place to manage people and resources on both sides of the equation. These overriding goals will need to be managed concurrently through intelligent strategies and well-developed systems. As the Great Resignation is likely to continue, franchisors can take this prevailing employment trend as an opportunity to evolve as an organization and, if done properly, create even greater success moving forward across the entire organization.