Why Franchise Businesses Need to Outsource Human Resources

HR Outsourcing for Franchise Owners

As a franchise business owner, one of your most important responsibilities is managing the people you employ. Without them, you have no business. They’re the people on the front lines. You may not interact with the end customer very much, if at all, depending on the franchise you choose but your staff will. You’ll likely spend more of your time choosing products, doing the day to day business administrative tasks, and making sure your staff has all they need to make your business a success.

If your staff does most of the dealing with end customers, they are your public face. How they behave and interact with the customers will determine whether or not you have repeat business and great referrals. Making sure your staff is taken care of is imperative. Every company needs Human Resource tools at their disposal.

1. Does the franchise you purchased offer Human Resource (HR) tools and training programs to help you managing your staff?
2. Can you rely on them for HR assistance or are you on your own?
3. Do they offer enough ways to recruit and retain good staff?

If not, have you ever considered hiring a professional outsourcing firm to handle your HR needs?

Franchises have always been notorious for staffing turnover. Folks hired to manage franchises, more often than not, last only 6 months or less in their positions before moving on. The reason for this problem is usually inconsistent and/or badly conceived recruitment practices as well as the mistake of not setting the proper expectations regarding the role of the manager and how he or she is expected to manage the work environment. It’s important to set clear goals and expectations so everyone has a pathway to achieving a common vision set by you. Your staff must view your franchise business as a professional business, not a hobby. Your staff will appreciate it if you show them that you are a well-organized and consistent employer.

Common Human Resource Challenges

Even the most experienced franchise owner can be overwhelmed by human resource demands and the challenges that come with being in compliance.
Here are just some of the most common HR issues franchises deal with:

• employee leave
• employer liability
• avoiding or dealing with employee lawsuits
• employee classification
• overtime and tips pay requirements
• hiring the right employees
• terminating employees correctly
• workplace safety and training
• onboarding and training new employees

… And there are so many more.

Consider a Professional Employer Organization (PEO)

All franchises face HR issues, but many smaller franchises are owned by one or two people who have to focus their time on running the business. They can struggle to keep up with the day-to-day challenges of being an employer and may not keep up on current legal and workplace trends. It’s unwise to be without an HR department because that is no excuse for non-compliance. It’s easy to let employment issues slide which may result in significant legal problems and painful penalty costs. Business owners need to have a complete understanding of federal, state, and municipal employment laws and if they don’t, they need to hire someone that does.

This is where the right PEO can be worth its weight in gold. It’s far more expensive to pay fines and penalties or wind up in costly lawsuits than to pay for PEO services. Not to mention the bad press that follows a business when the public finds out about some of the problems that can be created by not knowing and following the law.

Severe problems could put the franchisee in danger of losing the franchise altogether. Problems that hurt the franchise brand can mean big problems with the relationship between franchisee and the franchisor.

How hiring the right PEO can help you operate your franchise

1. You will save time:  Do you want to spend your time filing reports and taxes, finding the right workers’ compensation coverage, processing payroll, filing reports, selecting and managing employee benefits, and worrying about HR liability issues? Wouldn’t it be a lot more fun working on your franchise, creating new marketing plans, and growing the business? Maybe even growing enough to add more locations?
2. You will save money:  Working with the right PEO can be as much as 50 percent less costly than hiring an on-staff HR department while giving you the benefit of working with true HR experts. They will do all the nitty gritty work and save you headaches and money while keeping you in compliance.
3. You can spend time growing your business:  Statistically, businesses that hire the right PEO see higher growth rates than other small businesses that go it on their own. Taking this worry off their hands allows the business owner to focus on their business growth, their customers, their employees happiness, and therefore, their bottom line.
4. You will reduce your risk and liability:  Good PEO’s can help with so many issues from hiring and firing, unemployment costs, risk management programs which help to create better workplace safety, payroll reports and tax filings which need to be done correctly and in a timely manner, helping to train employees so as to maximize their job performance, and much more. When you outsource your HR needs to a PEO you get the opportunity to work with professionals that are there to help you keep your business safe from liability. You will have lots of questions and they know the answers.
5. Full Service PEO’s will help you find the best employees:  When you run any small to mid-sized business, franchise or not, it’s hard to find and keep good employees. Bigger companies can steal them away with the offer of better workplaces, better salaries, and most importantly better HR and employee benefits. A PEO can provide you with a wide range of employee benefit options as well as tools that give your employees total access to their personal HR information. They can also generate reports and information that help you manage your HR program and keep you up to date with everything that is happening with your employees.

Not all PEOs offer the same quality, services or pricing packages. Let us help you consider all your options. Yes it won’t hurt to ask other small business owners what their experiences have been or research PEOs online and look for reviews. Remember though, that this is what we do as your outsourcing matchmakers. We study the industry and keep tabs on which PEOs and payroll companies are doing it right … and which aren’t. Contact us using the form below for help.
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