Why Franchise Businesses Have Such High Employee Turnover Rates and How to Solve Them

Guest Post by Kylie Ann Martin

A franchise business seems lucrative because you no longer need to start from scratch to establish an enterprise. You only need to spruce up your branch and build trust with your target customers to stand out from other franchises. The challenge is to keep it afloat internally and externally.Franchises often have a huge employee turnover rate due to unhappy employees. Losing an employee can create a huge financial and emotional burden on business owners. Businesses spend an average of 33% of a worker’s annual salary when replacing an employee.

Think about it. Once an employee leaves, the time, effort, and money put into advertising the job vacancy and onboarding the worker go to waste. Luckily, you can prevent employee turnover in many ways. But first, let us understand why franchise workers leave.

What Causes High Turnover Rates in Franchises?

Employees have different reasons for leaving their jobs, including lack of career growth, inefficient management, substandard compensation, or burnout. According to Franchising.com, the most significant driver of employee turnover in franchising is a lack of attention from their superiors.

Employees need to know that they are valued and doing a good job. They need to feel that they are developing as workers and that their bosses look out for them. They will likely submit their resignation letters when they feel like they are mere cogs to a machine with no development or human value.

According to turnaround management consultant Baron Christopher Hanson, “Rock star employees know how to sell your product or service to anyone who walks through your door. Great employees also do not lie, cheat, or steal. They know how to spot shoplifters, and will raise their hand when they see signs of waste, lost revenues, and ways to save money.”

When you value your employees, you save your franchise from financial losses, improve employee retention, and maximize your investment in your staff. It is important to hire smart and keep the best employees with the highest potential.

How Can You Prevent High Turnover Rates?

There are many ways to save your franchise business from high employee turnover. Here are some tips to get started.

1. Workplace Culture

Employees need more reasons than earning income to come to work every day. A positive workplace culture will help them learn in a safe environment while also enjoying time at work.

2. Incentive Programs

Incentive and bonus programs are also fantastic motivators for employees. It can encourage them to perform beyond the bare minimum and increase their morale. A commission program can also motivate them to increase sales in a retail franchise.

3. Consistency

It would be best if you kept your promises not only to your customers but also to your employees. For instance, you should lead by example when setting house rules. If you say payday is on a specific date, abide by that. Staying consistent with your promises will help gain employee trust and loyalty in the long run.

4. Access to Benefits

Apart from good pay, attractive benefits can make your employees stay in your company. You can offer health and wellness benefits, educational allowance, or other perks to support their overall lifestyles.

5. Work-life balance

Your employees have a life outside their job. Overwork or burnout can affect their personal life, which will eventually cause them to resign.Stick to a balanced work shift schedule and support your employees with their time outside work. Do not bombard them with messages during their time off unless extremely necessary. Do these things, and they might realize that they are working for a company that values their personal boundaries.

Improve Employee Retention to Reduce Company Turnover

Your employees are your best assets. They face your customers daily, so it is important to give them reasons to stay loyal to your business. You will be well on your way to a lasting franchise with proper recognition, workplace culture, incentive programs, consistency, benefits, and work-life balance.