Home' The Franchise Review : March 2015 Contents 41
The Franchise review // sPOnsOreD arTicle
THE FRANCHISE REVIEW
THE FRANCHISE REVIEW
In our research, we found that 38 per cent of surveyed MSOs
had staff turnover greater than 20 per cent – we would say
that 13 per cent is in keeping with best practice. Over half
of the organisations admitted that the retention rate was also
markedly different in certain locations, suggesting site-specific
HR problems. So, again, maintaining HR consistency is one of
the main challenges for franchisors and MSOs.
What are the potential HR risks faced by franchisors?
For franchisors, the scale of having businesses in various
locations means it can be hard to prioritise and respond
promptly to the HR issues that are being faced at each and
every individual location, leading to frustration and issues
potentially escalating. Disputes and misunderstandings
can occur in many areas, including termination, award
interpretation, performance, disciplinary action, harassment,
discrimination, adverse action, redundancies and Fair Work
Commission issues, to name just a few. If franchisors are
not properly equipped to handle and manage these kinds of
HR issues, it exposes the business to serious organisational,
operational and financial risks.
They may be liable for severe compensation penalties, not to
mention significant damage to their brand and reputation. For
franchised businesses, the brand is a staunchly protected area,
as it is key to ongoing network and business growth. It’s not just
about risk management; brand and performance are also key
outcomes of the HR function.
For example, we ask our new clients to describe how they wish
to be viewed as an employment brand. Many clients wish to be
perceived as a fair, professional employer of choice; however, it
is often an empty goal without the proper processes in place to
achieve it. Creating a strong employment brand means having
a clear commitment to key HR processes, such as onboarding,
performance management, training and development, and so
forth. If these processes are not in place or are inconsistently
delivered, employees leave and, unfortunately, it can lead to
negative market chatter and a weakened employment brand.
For franchisors that are looking for franchisees to invest, this
becomes more important than ever.
How should franchisors and MSOs protect themselves from
these HR risks?
HR issues can quickly become serious and costly, so dealing
with complaints and issues promptly is the main priority.
Inexperience can lead to inappropriate handling and exposure
to risk, so I cannot stress enough the importance of ensuring
that you have a team with the experience to understand,
analyse, interpret and ultimately know the steps that need to
This is the basis of how Elite HR Partners was born, and we
have found that our Employer Advisory service has resonated in
particular with franchisors and MSOs. We have a team of expert
consultants with an average of 20 years of Human Resources
and Industrial Relations experience between them. On-call
access to that level of knowledge and professional experience is
invaluable for performance quality and risk mitigation. Internal
HR departments should ideally be able to focus primarily on
strategic organisational issues, and area and line managers
with their own business imperatives.
One of our most significant partnerships has been with
Specsavers, which has previously been awarded the Franchise
Council of Australia’s ‘Established Franchisor of the Year’ and
‘Social Responsibility Award’, along with the Australian Retail
Association’s ‘Australian Employer of the Year’ award. We set
up an on-demand service for the Specsavers store partners
to contact us with their HR or industrial relations issues.
Our consultants assess the issues and provide practical,
immediately actionable step-by-step advice. This has resulted
in a large reduction in issues escalating into formal disputes,
and instilling greater confidence and skills in their store
partners to deal with staff-related issues, through training and
development interventions that are then developed, based on
the analysis and findings provided to the Specsavers People
and Organisation team.
Disputes and misunderstandings
can occur in many areas, including
termination, award interpretation,
performance, disciplinary action,
harassment, discrimination, adverse
action, redundancies and Fair Work
Our consultants assess the issues and
provide practical, immediately actionable
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13/03/15 11:51 AM
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