One of FranNet’s most valuable partners is FRANdata, the franchising industry’s leading market researchers who offer intriguing insights and strategic business forecasts. One of their latest projects tackled a persistent problem that isn’t unique to the world of franchising, but one that touches all industries – labor shortages. FRANdata joined forces with the International Franchise Association (IFA) and devised a survey to determine conclusions related to labor challenges. Earlier this year, they queried nearly 200 senior level franchise brand representatives, representing more than 85,000 franchises and just under 5,000 corporate-owned locations.
The goal? Discovering the strategies franchisors have developed for overcoming labor strife within their franchise systems. The desired outcome? The recruitment and retention of employees. Below is a synopsis of some of the most intriguing findings from their report, “Identifying and Addressing Today’s Labor Challenges.”
Labor Challenges are Widespread
Nearly nine in 10 of all survey respondents agreed that their franchise operations are facing difficulties in recruiting labor – both skilled and unskilled. 80% of all franchise brands reported experiencing some form of personnel shortages. It led to a reduction in the average number of employees per unit in over 60% of brands surveyed and almost all agreed that the labor shortage has restrained their planned growth in some form – though the level of constraint did vary widely among respondents.
Responding in Kind
Franchisors have not failed to heed the call for assistance from franchisees in their systems. Nearly half of all brand representatives surveyed revealed that they’ve taken recent action to improve employee retention. Almost 40% have directly assisted franchisees with recruiting efforts and 12% have gone a step further – altering the business model to downplay the significance of labor shortages. Pointing to specifics, some brands have worked directly with franchisees to develop job descriptions. Others have established revised training programs to onboard employees, complete with recognition programs and achievement levels. Still others have invested more capital in technology to reduce the dependence on employee labor.
The report’s findings highlight the strength and resilience of the franchising business model, with a majority of brands agile enough to respond accordingly to offer assistance and relief to franchisees in the system. The elevated level of concern surrounding the labor issue was enough to spur some brands to address the problem in real-time, with innovative and forward-thinking solutions. Some increased leadership training for employee career paths and created unique funding sources dedicated to recruiting. Others shifted a portion of expenses from coop marketing pools to recruitment at the unit level. Some even went a step further, with the addition of a dedicated internal recruiting officer to coach franchisees through their labor challenges.
You can read the full report from FRANdata and the IFA’s survey by following this link.
As the survey and report’s findings reveal, when it comes to small business ownership, there’s simply no substitute for our industry’s proven business models and franchisor support level. If entrepreneurship is a route you’d like to pursue, FranNet can help you get started today by setting up a no-cost, no-obligation appointment with a qualified FranNet representative who both lives and works in your area. Together, we can find a franchise ownership opportunity that matches up perfectly with your lifestyle and income-oriented goals.