Creating a Culture of Retention
Creating a Culture of Retention

As the competition for talent heats up, smart franchisees will focus on creating a culture of retention to keep the best.

Retention of good employees is one of the most critical issues facing any franchise system. After all, many franchise models depend on a young, often mobile, workforce that is still in the process of “finding themselves” and settling into their career. On top of this, many franchisees are competing for employees from similar labor pools, with very little distinction in compensation and benefits separating one model from the next. As this segment of the labor force continues to tighten, the competition for good employees will heat up, and this war for talent will become a critical factor in your growth and success. Given all of this, it is important for a franchisee to ask themselves, “How am I going to compete and win my fair share of the available talent?” For the last 2 years, this question has been a focus of much of my work at Sport Clips.

Unfortunately, traditional methods used by large companies do not provide a model for success for franchises. Thinking through a traditional employee value proposition can be useful, but this approach can be cost prohibitive and difficult to implement. Many franchisees cannot afford to compete based purely on total compensation or elaborate perk programs that entice workers to join and stay with a company. In addition, rapid promotion within franchise systems is often unrealistic. Bonus programs can work and are utilized by some models, but these payouts are often fairly modest and typically will not influence an employee’s long term decision making. So what is left? The answer is straight forward and obvious, but like many simple ideas hard to execute. The bottom line is that creating a positive store culture is the most effective way to attract and retain good employees.

For years, consultants have been spouting the adage “employees don’t leave companies, they leave people.” While an oversimplification, this is true. When all things are roughly equal, employees will leave bad work relationships for greener pastures. If franchisees are willing to significantly over pay, employees are likely to put up with a little more stress and relationship strife, but when all things are about equal, the attitude is often “why bother”. A key point to understand is that there simply aren’t large barriers to exiting when employees can quickly find an equivalent job without much effort. Under these conditions, people do leave people . . . or perhaps more specifically “work cultures” that are created by people.

With this in mind, I would suggest that Franchise Leaders invest considerable time and effort in creating a store culture that is attractive to this specific segment of the work force. Easier said than done,
but here are five areas of focus that can help you build a store culture that will attract and retain quality employees.

Hire the Right Manager – The age old debate continues: should you hire for experience or personality? In the case of a franchise store manager, the answer is simple. As long as they are smart and can learn quickly, hire for personality. The reason is obvious, in most cases you can teach a manager the processes and skills they need to run a store, but you are never going to change who they are as a person. Since the key to happy workers lies mostly with the ability of a manager to create an engaging culture, having a manager who is fun, personable, persuasive, and pleasant can’t be over emphasized. Hire a person who actually likes people and is good at creating relationships. These qualities cannot be taught, and when they do not exist in a work culture, employees quickly leave. In short, when possible hire for who they are . . . and teach them the rest.

Emphasize Positive Feedback – We are programed to think that a key role of a manager is to address all counterproductive behavior and immediately get it corrected. Even the word “feedback” causes most employees to cringe and brace themselves for information about the latest thing they did wrong. While no one would suggest that problems shouldn’t be corrected, work cultures that acknowledge and emphasize the successes of employees significantly outperform cultures based on correction. Even your worst employee is doing many things right, but these aspects of their job go unnoticed and become background noise. A good work culture is full of positive descriptive statements that specifically acknowledge what is going well. In fact, I would encourage a model that favors positive reinforcement 5 to 1 over corrective statements. This builds trust in the relationship so that when corrective feedback is needed it is heard as “helpful”, rather than an attack. When positive feedback becomes the norm, the energy of the store will greatly increase and performance will naturally improve.

Celebrate Success Often – Many franchise owners are currently recruiting the majority of their employees from the “everybody gets a trophy” generation. Millennials tend to get a bad rap since the norms that they grew up with emphasized positive reinforcement and rapid rewards. Why are we fighting this trend? Franchise owners that understand that this generation wants to celebrate collective success frequently, will have a huge advantage in the competition for good employees. Set achievable goals, be clear about how employees win, and celebrate achievements along the way. These celebrations do not have to be elaborate or costly, rather they need to be frequent and fun. I recently watched a group of store employees at Sport Clips singing “We Are the Champions” by Queen at the top of their lungs after achieving a set goal. Many of these team members posted the video on their Facebook page – instant gratification, instant fun, and most importantly, an instant ad for your store’s culture.

Make the Routine Fun – One of the reasons that franchise models are successful is that they provide a tested system for success. All franchise systems depend on a set of procedures and processes that make store operations routine and predictable. Unfortunately, from the perspective of an employee, these routines can become mind numbing. I am reminded of the YouTube video of the Southwest Airlines flight attendant who rapped the safety instructions. Or perhaps the most famous example, FISH from the Pike Place Fish Market in Seattle. In both of these cases, routine work processes were transformed into very personal and engaging employee experiences. We all know that everything can’t be fun, but when you can add humor and excitement to repetitive processes, engagement is likely to follow.

Measure Your People Efforts – Franchise owners routinely measure a wealth of financial and customer information to gain a sense of the overall performance of their stores. However, when it comes to their people efforts, they often fly blind by failing to establish even rudimentary people metrics. Start with the basics; for example, a monthly turnover rate for both your employees and managers. This will give a sense of the churn of employees and a trend line you can monitor over time. You should also consider adding basic measures around recruitment and employee satisfaction. As Peter Drucker once said, “what gets measured gets improved”, so let’s measure our efforts to retain our people. In the long run, these measures are as important to your long term success as your financial position.

By creating a work culture focused on the employee experience you can greatly increase your chances of recruiting and retaining good employees. In fact, given the nature of franchising, culture may be the
single biggest differentiator in the fight to retain top talent. In the years to come, as winning the talent war becomes the critical difference between growth and potential failure, spending time and energy on creating a great store culture will be critical to your success.