It’s no secret that employee retention in franchises can be difficult and disheartening. According to the National Restaurant Association, the annual employee turnover rate in 2015 was 72.1%, compared to the total US private sector rate of 45.9%. In 2007, the restaurant rate was as high as 80.7%. In the auto industry, another franchise-based business, turnover among sales consultants was 66% according to the National Automobile Dealers Association’s 2014 Dealership Workforce Study.
In the quick service industry, turnover cost per year are $12,000 – $15,000 per location. These numbers emphasize the importance to focus efforts on building and retaining a workforce with lower turnover. But we know budgets can be tight – a raise for everyone and free college tuition is not always in the cards. So how do we motivate, recognize, and inspire? We’ve learned that a little bit can go a long way.
One of the easiest way to reward employees and – perhaps more importantly – foster a sense of brand pride is through high-quality gifts and promotional products. Let’s look at Google. Throughout their summer of employment, interns are gifted with quarter-zip sweatshirts, water bottles, notebooks, hats, pens, and the like. Getting cool branded gifts instills a sense of pride in the company as well as a sense of appreciation. One thing you do have to be careful about – the quality of the products and the quality of the design. Anyone can slap a logo on a sweatshirt and hand it out, but that won’t guarantee anyone wants to wear it.
Chances are, you or someone in your office has a plaque hanging on their wall or an award sitting on their desk. “4th Quarter Highest Sales.” “Customer Service Award.” Why do people keep these and display them where everyone can see? To keep it short – it makes them feel good to be recognized, and to have others see that they’ve contributed to the company. Making employee recognition a standard part of your year or quarter can go a long way in keeping your employees happy and motivated. Well-designed plaques and awards presented with a gift card won’t be forgotten.
When you have high-volume salespeople you want to reward or franchise owners you want to recognize for their outstanding accomplishments and revenue, one of the most memorable rewards is an incentive trip. In a study by The Society of Incentive Travel Executives, incentive programs aimed at individual workers increased performance by 27%, and programs aimed at teams increased performance by 45%. In an incentive for franchise-managing partners we manage, winners were chosen if they were in the top ten percent of all stores. These top performers earned a trip to the beautiful Secrets Akumal Riviera Maya in Mexico for a few days of relaxing, rewards, and team building – and came back refreshed and motivated.
In franchise operations, employee retention doesn’t have to be low if motivation and engagement are high. Through several levels of gifts, recognition and incentives, it doesn’t have to be complicated – it can even be fun.