Retaining hourly workers is one of the biggest challenges that many franchises face these days. It's one of the most important steps every business should take, but not many actually do.
Ignoring your hourly workers, and not doing anything of importance to keep them in your company, inevitably leads to low productivity, decreased sales, high turnover rate, high business costs, and ultimately failure and bad reputation.
According to a report by the Center for American Progress, turnover can cost businesses anywhere from 16% to 213% of a lost employee's salary, depending on the job position.
If you're dealing with a high turnover rate, or you've just started your business and want to make sure all your employees are satisfied with their job, you need to take certain steps. Here are the most vital steps the best franchises take to keep their hourly workers.
1. Smart Recruitment
Retaining hourly workers (and all other employees, for that matter), starts with the hiring process.
The latest statistics from the Center for Management & Organization Effectives show that up to 80% of employee turnover rate is due to bad hiring decisions.
If you hire employees who don't really fit your company's culture, it's highly likely that they'll start looking for a new job not long after the hiring process.
This is why you need to make sure that your recruiters hire new workers wisely. They need to thoroughly assess all the skills and qualifications of job candidates, and conduct multiple interviews to see if they're a perfect match for your company.
Only then will they be able to hire highly-skilled people who are genuinely looking forward to working in your company.
2. Great Onboarding
Onboarding also plays a huge part in retaining employees.
According to the Society for Human Resources Management, 69% of employees are more likely to stay with a company for three years if they had great onboarding.
Since HR managers are responsible for this part, you should make sure that they work closely with your recruiters. That way, they'll create a smooth transition process that will keep your new hires engaged.
You'll often find that a recruiter doesn't frame a company or a role particularly well during the hiring process. This often leads to new workers jumping ship soon after being hired, because they ended up with a job that they hadn't really expected.
Effective collaboration between your recruiters and HR managers will lead to a seamless onboarding process. During that process, your new hires should learn all about your mission and core values, and learn how to reinforce them.
If your onboarding process is well-structured, not only will your hourly workers stay longer with your company, but they'll also be more satisfied with their job. And you know that happy employees are productive employees.
3. Excellent Learning and Development Opportunities
After the hiring and onboarding processes comes training. However, employee training shouldn't be a one-time job. Providing ongoing training is the key to keeping your employees engaged, as it helps them improve their skills and reach their maximum potential.
According to a Gallup report, 51% of employees are actively searching for new job opportunities. The number one reason for that is career advancement.
As a matter of fact, a study by MRINetwork shows that 72% of employees are driven by career advancement opportunities.
If you don't provide your hourly workers with learning and growth opportunities, they'll simply start searching for someone who will.
Nobody wants to stagnate and feel stuck at a job. People want to train to gain more knowledge and upgrade their skills, because it boosts their confidence and self-worth. Moreover, it helps them advance in their career and ultimately earn more money.
When they receive proper training and master their skills, they'll quickly become more efficient and productive. Moreover, they'll want to stay with your company and help you achieve your goals.
Dunkin' Donuts and Domino's Pizza Case Study: Training for Better Performance
Dunkin' Donuts and Domino's Pizza case study shows that employee training truly is the key to reducing turnover rate.
Dunkin' Donuts provides its hourly workers with 6 weeks of training at the Dunkin' Donuts University in Braintree, Massachusetts. The workers spend four weeks in production training, and the remaining two weeks on developing their management skills.
What's different about Dunkin' is that they use a decentralized approach to training. Instead of having franchise owners conduct employee training, they employ their own trainers.
This helped them reduce turnover rate during training from 50% to an incredible 0.5%. It also helped them reduce their annual training costs from $418,000 to $172,000.
Quite similarly, Domino's Pizza provides rigorous employee training to improve performance. They provide 85% of the training on the job. The remaining part is conducted in the company headquarters, and includes various training ads, particularly videos.
They also use a decentralized training approach, preparing their store managers to conduct the training. They offer them a six-month MIT Program, where they learn all about helping hourly workers make the highest-quality products at an impressive speed.
4. Building a Culture of Respect
Showing your hourly workers (and all your other employees, really) that you care about them and respect them is yet another key to retaining them.
According to a survey conducted by Office Team, 66% of employees would likely leave their job if they didn't feel appreciated. When it comes to millennials, the number jumps to 76%.
This is why you need to create an enjoyable work environment, where all your employees will feel like family. Show them that you appreciate all their hard work, and that you're truly thrilled to have them around.
A simple "thank you" can really go a long way. As an old proverb goes, "Kind words will unlock an iron door." However, you should also provide your workers more tangible benefits, as kind words don't exactly pay bills (more on that later).
Lion's Choice: Keeping Employees Happy
Lion's Choice, a famous fast food restaurant company, is all about building a culture of respect. Jim Tobias, the owner of the franchise, is deeply committed to treating his employees with utmost respect and truly keeping them happy.
At Lion's Choice, general managers work 47.5 hours per week, and there's no need to work overtime. Their personal time is respected, but their work schedule is also very flexible. They can leave early if they have some personal errands to run, or if they need to pick up their kids from school.
When it comes to their hourly workers, they receive the same amount of flexibility, appreciation, and respect. Because of the flexible work schedule and no overtime work, there's an excellent work-life balance that hourly workers greatly appreciate.
Not only are they treated like family, but they also receive proper training, as well as various benefits that improve their experience with the company and keep them satisfied.
5. Offering Compelling Incentives
Every single successful franchise offers its employees enticing incentives that motivate them to push harder and go above and beyond to achieve the company goals.
Those incentives include various benefits, such as health, life, and dental insurance, retirement plans, paid time off, vacation, flexible work schedule, and many other benefits.
While these are all very important, most employees appreciate monetary benefits the most. Giving the top performers a bonus, or a raise, is the best way to motivate them to keep working hard. It shows that you recognize their efforts, and that you truly appreciate everything they do.
According to multiple successful franchises, money is the best way to retain employees and inspire their loyalty.
Apart from the benefits mentioned above, you can provide profit-sharing bonuses, trips, and vacations for top performers, gym memberships, wellness programs, and even organize annual contests and enable your workers to receive great prizes. Those can include money, but they can also include TVs, iPods, or some other valuable products.
Whichever incentives you choose to offer your hourly workers, the key is to give them something that encourages them to stay. Give them something that your competitors don't offer, so that they don't jump ship.
If you don't value their work, and don't compensate them properly for all their efforts, they'll have no problem finding someone else who will.
Chick-fil-A Setting a New Threshold
Chick-fil-A is paying $18 an hour to retain its hourly workers. The American fast food restaurant chain sets a new threshold with this sizable raise, given that the minimum wage at other fast food joints in the United States ranges from $12 to $15.
Starbucks College Achievement Plan
A large number of hourly workers are high-school graduates who are looking to gain more knowledge and acquire new skills.
One great example of a franchise using training to retain hourly workers is Starbucks. The coffee giant partnered with Arizona State University in 2014, and created the Starbucks College Achievement Plan.
The plan enables all their benefits-eligible part-time and full-time employees in the United States to earn a Bachelor's degree through the university's online program.
The best part about it is that the tuition is fully covered. All the out-of-pocket tuition costs are reimbursed directly into the paycheck at the end of the semester.
6. Streamlining Internal Communication
Effective communication is paramount for building a great culture, and keeping your employees engaged and happy.
If there are gaps in internal communication, you experience wasted hours, increased costs, inconsistencies between other franchise locations, and ultimately high turnover.
This is why you need to make sure all your workers can seamlessly communicate with one another in real time, and there are numerous tools that can help you out.
Take a look at how one Domino's Pizza franchise solved the problem of poor internal communication.
M&G Pizza Enterprises Case Study: Enhancing Communication
This Domino's Pizza case study shows that communication truly is the key to building a better workplace culture and retaining employees. It also leads to lower business costs.
M&G Pizza Enterprises, a Domino's Pizza franchise, had four communication issues:
- Inconsistent communication, leading to poor performance.
- Poor communication between store managers, leading to wasted time and money.
- Lack of connectivity, leading to low morale and high turnover.
- Lack of a central hub for storing resources.
To solve all these problems, M&G utilized an online communication platform that helped them streamline all communications, and significantly improve their operational efficiency.
They also used the platform for training, engaging and motivating employees, and rewarding them for all their efforts.
As you can certainly see, retaining hourly workers isn't as difficult as it may seem. Many companies experience a high turnover rate simply because they don't follow all these simple tips. They don't show appreciation toward their employees, and don't take the time to create a friendly atmosphere that inspires and motivates.
You can stand out from the crowd by following these simple tips, and showing your hourly workers that your company is their best fit. Hire them wisely, incentivize them constantly, and make room for them to learn and grow, so that they can reach their full potential and be fully satisfied with their job.
Workstream (www.workstream.is) is an end to end hiring software built for the hourly workforce, cutting in half the time to hire and on-board workers, via SMS / text communication, automated workflows, online document signing, and more.