How the Great Resignation Impacted the Franchise Industry

With Covid sparking unprecedented resignation rates, what has been the effect on franchises?                                                                             Today, we’ll look at the Great Resignation in Australia and what challenges and opportunities it’s opened up for franchise owners.

The Covid Hangover

With lockdowns and fear of infection, many people spent more time in their homes in 2020 than any previous year in living memory.                   New ways of working had to be introduced, with many businesses looking toward technology to recreate work environments virtually.

The effects of these monumental changes are felt today and will continue for many years.                                                                                     One effect is people’s attitude to work-life balance.

Burnout is a global epidemic. Covid allowed many to pause and take stock for the first time in years, perhaps decades.                                         The overwhelming conclusion is that they want more fulfilment, whether that’s at work or home.

As a result, the Great Resignation became a popular global theory.

However, how far did it penetrate Australia?

The Great Resignation in Australia

This term, coined in the USA, describes people who resigned due to reevaluating their jobs during the pandemic.                                       Increasingly, people are putting themselves first. They are looking at other employment options if their current job does not offer enough flexibility and adequate benefits.

In August 2021, of the 12 million employed Australians, more than 21 per cent worked from home, fuelling the desire for flexibility. 

However, when it comes to Australia, that data does not back up a resignation trend.                                                                                     Australia's resignation rate has decreased over 2022, according to the ABS.                                                                                                   However, there is still a lot of uneasiness, and people are investigating other options.

This presents a tremendous opportunity and a considerable challenge for franchises. Both, when handled properly, can lead to greater success.

The opportunity for franchises

When current business owners are asked what motivated them to leave their jobs, they nearly always mention factors such as being their own boss, better work-life balance, fulfilment, etc.

It stands to reason that many of those reassessing their jobs and careers after the pandemic would consider starting their own business. 

We can also assume that a reasonable proportion of these people will start a business through franchising.                                                              A franchise is a tempting option for many of these people who are likely to have funding and are eager to establish their new path.

It is clear that Australians can make sound, considered career moves, even if they are not resigning in droves.                                                     There are more opportunities than ever for entrepreneurs who have the desire to follow their dreams.                                                                   This means that franchisors have the opportunity to acquire new talent at a time when the talent pool of entrepreneurial minds is booming.

After a couple of very rough years in the market for so many, franchises need to be primed and motivated to get deals done in order to expand again.

The challenge for franchises

Many franchisors have benefited from the Great Resignation with access to new entrepreneurial-minded candidates. However, some franchisors are experiencing pain as they lose employees moving on to franchise ownership with a different franchise. 

Many franchises focus on and praise sales. But staff retention should be just as important as it costs money to replace exiting employees, not to mention causing an extra burden on remaining staff which could cause them to leave - a vicious circle.

The key here is to systemise talent retention in the same way most franchises systemise their sales process.

Ideas are creating a formal onboarding procedure and an internal operation manual to prevent you from having to recreate your intellectual property after a key employee leaves.

Also, create a culture of innovation. While a franchise needs to have a core mission, you don’t want the attitude of “that’s just how it’s done.”

In addition to helping retain staff, this forward-thinking approach will likely attract newer staff. 

Make sure your team knows that you’re happy to discuss and test new ideas they have and regularly reward those who show innovative flair. This will greatly improve your employees’ perception of fulfilment in their roles. 

Turning employees into franchisees

It’s understandable why many franchises would see turning employees into franchisees as the ultimate solution. 

Yes, you still lose an employee you will need to replace at some point. But you gain a franchisee, which is better than losing them altogether.

It’s also an attractive prospect for employees. The opportunity allows them to realise their entrepreneurial dreams while staying with a familiar organisation. They have seen the business in action, are already part of the culture, and, hopefully, have seen the franchise flourish. 

You have already overcome one of the biggest hurdles in franchise sales via ‘built-in’ credibility.                                                                         Where the dream can turn into a nightmare is when franchisors are too eager to press fast forward on the recruitment process. 

There can be a tendency not to follow the same stringent vetting processes as outside candidates. Familiarity can breed a sense of confidence in a person’s capabilities that are misplaced. 

Ensure you test your employees for the same hard and soft skills as you do for anyone applying to be a franchisee. 

You do no favours by ‘going easy’ on an employee, to yourself or them. Franchisees that don’t have the right skills and personality traits are detrimental to the franchise and the franchisee.

Also, because turning employees into franchisees can seem like the answer, some franchises may inadvertently pressure employees.                   This will, again, lead to unsuitable people being awarded franchises. 

The data proves that the Great Resignation is not happening in Australia, but even if it was, turning employees into franchisees without consideration and due diligence will not solve the problem. You create a bigger problem.

Coping with the Great Resignation in 2023

The Great Resignation started in America, with evidence of the theory in Europe and other parts of the world.

However, in Australia, there is no evidence to prove its existence.                                                                                                                     However, there is certainly a Great Restlessness. This could lead to the Great Resignation.

Franchises that are strategically planning for the future, creating opportunities for their staff with an eye on work-life balance and flexible working will succeed.                                                                                                                                                                                                   Additionally, those who proactively engage restless talent from large corporates will access a pool of highly qualified prospects with the financial means to become franchisees. 

How you handle this restlessness could make or break a franchise. 

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