Employee retention is one of the biggest challenges faced by franchisees in the food industry. But if you fell asleep in a corner booth of one of 23 Lion’s Choice sandwich restaurants in the US for, say, a decade, you’d wake up to a lot of familiar faces. Their employee retention rate in comparison to industry standards is off the charts; in fact a few years ago there was no turnover at all in any of the 15 company-owned restaurants. So how do they do it?
Employee retention and loyalty is an important goal for any business. But keeping employees around, especially in low-skilled jobs, is tough.
How Lion’s Choice does it
Hanging on to great employees is hinged on fostering loyalty. The knock-on effect of this is simple: The way you treat your employees determines the way employees treat customers. As simple as this sounds, it’s usually employees who bear the brunt of cost-cutting: Reduced wages, no bonuses, cut hours, cancelled benefits. While many business owners can sympathise, it’s a bad move. This is how Lion’s Choice does it:
• A culture of respect
At Lion’s Choice, owners are committed to treating their employees well. Even when money is tight, Lion’s Choice franchisees spend more upfront on training, hourly wages and benefits. Franchisor Jim Tobias believes he gets every cent back: “I think some larger chains are concerned with showing good numbers and they try to squeeze as much as they can out of every employee. That’s great in the short term, but terrible in the long run.”
Developing a culture of respect at Lion’s Choice begins with managers who aren’t forced to work crazy overtime hours common to the industry. General managers are scheduled for 47,5 hours per week and never have to exceed that.
Flexibility is the rule: Lion’s Choice employs three swing managers who can fill in so that general managers can take a holiday without worrying their store will collapse, and if a manager needs to run a 30 minute errand during the day, they aren’t chastised for it.
“We want the workday to be sustainable. We don’t want our managers telling themselves, ‘Just stick it out another month.’ We want them to feel they can handle their jobs years into the future,” says Tobias.
• The benefits of benefits
Tobias offers his full-time employees at company-owned stores health and life insurance, but franchisees have the freedom to design their own benefits packages.
“We know this can be hard for franchisees in remote markets, so we don’t force the issue. But we also know fringe benefits aren’t the only way to encourage loyalty and longevity,” says Tobias.
A great boss and co-workers, interesting work and a family-friendly environment have been shown to trump extra cash for most employees. “Feelings of competence and satisfaction are often a function of training – the more in-control and involved employees feel in the job, the more likely they are to stick with it,” Tobias says.
• Hiring power
Retention lies in being particular in recruitment. “We need to empower our employees. We all need to breathe the same, we all need to know how we like to operate, what our culture is all about. Turnover is tragic, it’s a huge waste of time and money but it’s inevitable if you don’t start with the right employees.”
But identifying a qualified employee who’s in it for the long haul takes more than posting a job online.
“The biggest problem is looking for employees in the wrong place,” explains Tobias.
“Companies look in the easy pools without any big fish.” Instead he suggests taking a more proactive approach by headhunting managers who are already employed but might fall victim to layoffs, closures or want to change jobs.
“Even small franchisees should actively recruit and not just wait for a CV to be slipped under the door. Mediocrity is a slow-death. And get to know managers – actually care about them and treat them like an asset. If you take good care of them, they’ll take good care of customers and you.”
- 60% or higher
The annual percentage of staff turnover in most US quick-service restaurants. – People Report Workforce Index
- 6 years
The average tenure of associate managers at Lion’s Choice.
- 12 years
The amount of time an average assistant manager works at Lion’s Choice.
- 17 years
The work span of the average Lion’s Choice general manager.
The increase in spending by satisfied repeat customers compared to new customers.