Is your recruitment really 100%?
I find this graph from the lovely people at Greenhouse to be interesting especially from a franchising perspective. For most franchising businesses, franchisee performance is directly linked to overall business performance and profitability.
The right franchisees will generate higher sales, and if, as a franchisor, you are charging a percentage of those sales this directly improves your return. Weaker franchisees just don’t generate the same sales performance, but also don’t run their franchised business as well as they could – leading to higher staff turnover, lower customer satisfaction and more of their time spent firefighting and not enough spent on growing their and your business.
And while franchisees are often tied in for a fixed period, we all know that getting existing people to re-invest is a lot less trouble than recruiting someone new. As James Young put it in his article for Franchise Business Executive last year, “If you extrapolate the difference of a ‘good’ verse a ‘poor’ franchisee’s performance across a whole network, the cost to the bottom line of a franchise system could be many hundreds of thousands of dollars and therefore potentially millions of dollars left on the table when prospective network buyers are looking at your network.” Combine this with the average length of stay for a good versus bad franchisee and you get a very clear view of the size of your orange area in the graph.
And before you claim that your average length of stay is the same for everyone, please remember that according to the Franchise Relationship Institute the average level of disagreement between franchisees and franchisors is 18%, showing that lots of franchise relationships break down long before the end of the agreement period.
So, what should franchisors think about when recruiting in order to maximise return on investment?
What is the mix of skills, behaviours and preferences that your most successful franchisees have?
How can you capture this objectively and in a measurable way? And are you working in enough detail? Most of the franchise specifications, job descriptions and person specifications I see contain very little detail about the behavioural traits and preferences organisations are looking for, as well as those contra-indicators. So, what is your opinion on the importance of these traits for franchisee success in your business?
Takes Initiative
Wants Challenge
Persistent
Collaborative
Handles Conflict
Pressure Tolerance
Manages Stress Well
Blindly Optimistic
Impulsive
Fast but Imprecise
Self-sacrificing
Does your current process enable you to spot the strongest potential performers up-front?
While making sure people have the finances to invest is incredibly important, making sure applicants have the right skill set to be successful is right up there too. Can you effectively screen at the beginning of the process so you know who the applicants are that you should be concentrating your recruitment efforts on?
Can you ?
Easily measure franchisee candidates against the traits required for success at the start of the process in order to spot the best prospects
Pull down detailed reports later in the recruitment process showing you potential areas of concern or how to retain and engage them as individuals?
Do you have the data systems to track applicants progress in real time?
Having quality franchisee recruitment data systems where you can see the status of every applicant in real time can make a real difference in helping you snap up the best talent and in reducing the time and effort it takes for you to get applicants to navigate each stage of your process. Someone who is a great applicant for you will also be checking out other franchise or business opportunities, so making sure your process is slick is an important part of selling your business opportunity to them.
Can your applicant tracking system?
Show you the time to acquire – how long it takes from first inquiry to signing on the dotted line. Too quick indicates a rushed process, too slow suggests inefficiencies.
Identify if stages in your process are creating bottle necks?
Evaluate Sourcing Channel Efficiency – which channels or activities are finding you the best candidates?
Allow you to prioritise your activities to the best prospects.
Is your on-boarding and induction as strong as it could be?
It is easy for a potential franchisee to be dazzled by the complexity and glamour of some induction arrangements.
A week in Tahiti its a magical place ?
Well it used to sound fabulous, but in the world of COVID-19 spending a week or so locked up in a classroom with a bunch of stranger’s half-way round the world has sort of lost its charm. And while Zoom or Teams are great tools, they are not a replacement for several days face to face group training.
Think about:
What do new franchisees really need to know and be able to do by the end of induction?
What is the point and purpose of each part of your induction process?
What induction activities are going to have the biggest positive performance impact for new franchisees?
Is your support in the first twelve months meeting your franchisees needs?
The post induction period is the most dangerous time, and the franchise world is littered with people who want out after three to six months once the glamour has worn off. Many businesses will celebrate the excellent support they have in place, and certainly a lot of resources are aimed here. But the disconnect between the confident assertions of support perfection from franchisors and the reported experience from franchisees who feel unsupported indicate that this is an area where further work needs to be done. Questions you can ask yourself are:
What is the performance you expect from franchisees at 3 months, 6 months, and 12 months?
What training and support will franchisees need to hit these performance targets?
How can you capture honest feedback from franchisees about their experiences to help you improve their experience and performance?
Conclusion
At Be Astute we can help you to improve performance in the areas I’ve highlighted above.
We work with franchisors to improve their recruitment through:
The use of Harrison Assessment Talent Diagnostic software to help with initial candidate screening and later detailed reporting for traits, preferences and engagement factors
The development of real time applicant tracking and reporting systems specific to the needs of the business.
Franchisee satisfaction research
Post induction training and coaching support through our Vanquish your Sales Demons programme.
References:
https://www.analyticsinhr.com/blog/recruiting-metrics/
https://executive.franchisebusiness.com.au/cost-of-poor-franchise-recruitment/
Julia Stock July 2020