Got Labor Issues? Here Is What to Do About It
Pretty much every business you can own, franchise or not, requires some sort of labor – a staff or a team around you. We are going to talk a little more about labor and labor issues, which are perennial concerns for business owners in every industry.
No matter what is going on in the economy and in the labor market – whether we have a booming economy with low unemployment or a struggling economy with businesses laying off employees and putting a freeze on new hires – there will always be some type of labor “issue” to worry about as a business owner. But should these issues (real or perceived) keep you from becoming a franchise owner?
Maybe – but maybe not. Maybe there’s a way to solve your labor problems by understanding what type of team you want to build and following strategies to decrease turnover. Let’s take a look at those strategies and the things you need to consider when building your team.
Skilled vs. Unskilled Labor
When you are thinking about owning a business, it’s important to consider what type of staff you are best at managing and want to manage. When clients work with us at FranCoach, part of our process is helping them understand this.
Do you prefer to work with a team or are you better at working by yourself? Would you like to be managing people who work in a sales type of role, like a corporate management structure? One piece of this puzzle relates to the difference between skilled and unskilled labor.
Skilled labor involves people who are already trained for the job that you need them to do. For example, think of electricians or plumbers. You’re not teaching them how to manage electrical systems or plumbing – they already know how to do that and may even be certified by an independent board to work in those areas.
Think of the girl who cuts hair at Great Clips. She wasn’t trained by the owner. She went to beauty school and learned how to do that. With skilled labor, you want to plug in these highly trained people and let them do their thing. Here is the question you want to ask yourself: Can you manage people who are doing a task that you either shouldn’t or couldn’t do? If so, then a skilled staff might be a good match for you.
When it comes to unskilled labor, you have to train your employees to do what you need them to do – whether it’s flipping burgers, mowing lawns, or anything else under the sun. Unskilled labor may be easier to find, but it can be harder to retain.
When it comes to managing unskilled labor, ask yourself these questions: Are you comfortable managing people doing tasks that you could jump in and do… even though you really should not be doing them? And do you like to train your people to ensure they are doing the task in the way that you want? If so, then you might excel at managing an unskilled labor force.
Most people have at least some level of experience managing each type of employee. Now, experience is great, but which type do you want to manage? There’s often a lot of uncertainty or openness around that question, so we often end up connecting our clients with franchises that on the surface are very different from each other. That’s because we need to compare and contrast different ways to manage a team.
We also need to understand each client’s ability and desire to delegate. Skilled labor is a great example of this. There are people we talk to who are 100% okay with letting the electrician who works for them go out and do his job without knowing at all how to do the work themselves. The very next person may feel uncomfortable with that and require the ability to do the work in order to manage people.
Some people are open to both and are unsure which option is best for them. That is okay too. When you work with FranCoach, we will help you make uncover your best fit.
There is no right or wrong, but these are things we need to be honest with ourselves about as we go through the process. It is important to get ourselves in the best position possible from a staff standpoint, and part of that is ensuring that you work with the team that is right for you.
ABH: Always Be Hiring
As we talk about labor issues and staffing, we like to use a twist on an old movie reference. Remember the film Glengarry Glen Ross? Think back to that famous scene with Alec Baldwin, when he’s standing in front of a chalkboard. “ABC,” the chalkboard says, and Baldwin’s character tells us that it stands for “Always Be Closing.” For our franchise owners, we change that C to an H: Always Be Hiring.
What tends to happen is this: An owner needs to hire three people for job X. They find three qualified people whom they really like and who are doing a good job. Then, they stop worrying about staffing. But you do need to continue thinking about labor issues, and here’s why.
What happens if all of a sudden, one of them gets sick, leaves, quits, or starts to do poor work and you have to fire them? Then you will need to go back to the beginning. You will have to post a job, start getting applicants, start interviewing, hold a second round of interviews, bring them in, and so on. It is not a quick process.
Or, on the flip side of the coin, let’s say that the three people you hired continue doing great work and the business takes off. Suddenly, you have more potential customers than you can handle. That’s a good problem to have, but it’s still a problem. Now you need to go back to the drawing board to find more people.
Keep Job Postings Up
Each franchisor is going to be different, but they will all have tons of support for you in terms of finding the people you need to hire. The franchisor will help you navigate where you should post job listings (whether that’s on Indeed, LinkedIn, Facebook, or tapping into colleges and universities). Usually, you will post on multiple platforms. No matter where you post, your franchisor will help you with knowing where to go and coming up with the job description that you’re going to post.
Here’s the trick: Just leave that job posting up. Now, you may not check it every single day, but every couple of days, you as an owner (or, as you grow, you may have an administrative assistant or office manager who can do this for you) should look at the posting. You will be able to get some new applicants, see if there is anyone who looks promising, hold initial phone screenings, and maybe even bring them in.
Even if you have to tell applicants, “Hey, we’re not hiring now,” keeping your job posting active is still worthwhile. You want to know where the bench is, so to speak. You need to know where you can go to find a pool of people the next time you actually are hiring.
It seems like a simple thing, but many people get their staff and move on. It happens almost every time. Human nature prompts us to think “Alright, we’re good,” and begin focusing on something else. As a business owner, you are often giving your attention to what is right in front of you, and with good reason – things move so quickly. That means that long-term planning sometimes gets ignored in favor of more immediate short-term needs.
But it’s essential to keep long-term planning at the forefront of your mind. ALWAYS BE HIRING. That is the biggest thing.
The Bad Boss
Everyone has had a bad boss at one point or another. Remember the old phrase “people leave their bosses, not their jobs” – we think there’s an element of truth to that. Think back to the bad bosses that you have had.
Many of us have worked for amazing people but have also had one or two people in the mix who were not so amazing. Think of them, remember that person, and then make sure you’re not acting anything like them. In fact, you can even think of what your bad boss would have done and then do the opposite. Whether it’s in terms of culture, compensation, incentives, or just the way people are treated… don’t be the bad boss that you’re remembering now.
Don’t Be This Guy
FranCoach’s founder and CEO Tim Parmeter likes to tell a story that illustrates the example of the bad boss very well. It all started in a well-known sub sandwich franchise at lunchtime. There was a line of half a dozen people, six to eight more sitting down eating, and two or three additional people waiting to pick up remote orders. It was hopping in there, but that’s kind of what you get with a sub franchise at noon.
Within 30 seconds of Tim being in there, the manager of the joint was yelling from one end of the counter to the other in order to chastise the girl who was working on the register. One small chunk of what he said was “How stupid can you possibly be?”
First of all, how stupid can this guy be to talk to a 19-year-old kid who’s working at the register like that? During the rest of Tim’s time in the restaurant, the manager proceeded to yell at about three more people. The look on every employee’s face said it all – if we went back to that sub franchise tomorrow, we’d expect to see totally different faces working there.
To top it all off, the manager didn’t limit his yelling to the employees. To everyone in the sandwich shop, he announced “‘Come manage a ____,’ they said. ‘It’ll be fun. You’ll have a great time. Man, were they wrong. This is terrible!’” While this is an extreme example, it’s a real one, and bosses like that guy are out there. Don’t be that person.
That sub sandwich franchise is going to have a labor issue at that location because that guy, for lack of a better term, was a complete and utter jackass. We all know people like him and we have all had bosses like him. Don’t be that boss as a franchise owner. It seems simple, and it is. Just don’t do it.
What to Do Instead
We will share an example on the other side too, one that illustrates what it looks like to be a good boss. It’s actually a franchisor that we work with. Tim had an opportunity to visit their corporate location, where they have a good-sized office with probably 50 or 60 employees for their franchise. They also have fantastic retention.
The office has been open for seven or eight years, and they have employees who have been there the whole time. People proudly say “I was employee seven” or “I was employee 12.” Why is that? Why have so few of their employees left?
The culture is fantastic. They make sure of that. The compensation is fair, and it’s on par with the usual for their industry and for their jobs. But they have other little incentives, too. Not everybody needs more money. Some people just need to feel appreciated.
In this office, they have a refrigerator that is absolutely stocked with beverages. Every single day, the company makes sure it is completely, 100% full. There is also a snack basket with granola bars and such that are there for all of their employees. Rumor has it that they stole this idea from an old MTV Cribs episode – but hey, it works.
If someone needs a snack or a drink throughout the day, that is one small thing they don’t need to worry about bringing to work. As Tim toured the franchisor’s facility, the refrigerator and snack bowl were two things that many people mentioned as part of their enjoyment of working there. Clearly, the little things count.
Mitigating Your Labor Issues
As a business owner are you always going to have some labor issues? Yes. So how do you mitigate that? The number one tip we can give you is to always be hiring.
We can even back that up a little bit. The first part of our process at FranCoach involves helping our clients ensure they’re starting businesses where they will be managing the staff they are best at managing and want to manage.
Then, as an owner, always be hiring. Have those jobs posted and active, and constantly be talking to people. Build a “bench” for when you need somebody. And remember, people may quit, but that’s not necessarily a bad thing.
You may have an employee who leaves their job for an amazing opportunity that the experience they gained working with you helped them get. And that’s a great thing – the next time you hire someone, you can use them as an example. But you do need to make sure you have your bench ready for when somebody leaves or when you are looking to grow and expand.
And then, take care of your people. You don’t have to be so extreme as to have a massive refrigerator with every drink known to man and a giant snack basket that makes it look like you own your own Circle K. That’s not a requirement. But you do need to take care of your people.
(Well, technically, you don’t NEED to… But if you treat your people like crap, don’t come running to us about your labor issues. We gave you fair warning.)
Give them a good culture and fair compensation. Learn about them and understand what makes them tick. Is it having Diet Coke stocked in the fridge at work? Is it two hours off on Tuesday to take their kid to the dentist? Don’t make them sweat that. Don’t be the colossal jackass at the sub place. Take care of your people.
Those things sound simple because they are. We as humans just tend to overcomplicate things. There are just three simple steps you need to follow: Find the right fit for you and for your business. Always be hiring. Take good care of your people.
Will you always have some labor issues? Will you have some pains along the way? Of course. But you will have significantly less when you adhere to these steps.
So how can you tell when you’ve succeeded? At any good business, whether it’s a franchise or not, there’s any easy way to tell when you’ve nailed it from a cultural standpoint. When you’re getting your new employees from your current employees (that is, through referrals), that’s a great indicator that your culture is shining. If someone who works for you wouldn’t tell their friend to work for you, then you’ve got a problem. Spoiler alert: YOU are the problem.
When you find the right fit, hire continually, and treat your people well, your growth will be better and your happiness and satisfaction as a boss will be significantly better. Your business will be set up to thrive and prosper – and even meet and usually exceed every one of the dreams and goals that you have.
Who Is FranCoach?
FranCoach is a national search firm dedicated to working with individuals who are interested in owning a franchise. We've partnered with over 600 of the top franchisors in the country, spanning nearly 70 industries.
Our number one goal with our clients is to help them find the absolute best franchise for them to own. Our goal with our Franchising 101 podcast series and this series of informational articles is to help educate people on all aspects of franchise ownership.
Reach out to us to learn more about potentially becoming a franchise owner. There’s never any fee for our service, so why not take the first step today toward your better tomorrow?