Attracting and Retaining Great People: Tips Franchises Need to Know | International Franchise Association

Attracting and Retaining Great People: Tips Franchises Need to Know


Attracting great people to your franchise is one thing. But keeping them is another. Offering employee benefits can help a franchise owner achieve both.


By Neema Ardebili

However, some franchise owners view benefits as too expensive. But they don’t have to be. Here are 10 employee benefit options that may be more affordable than you think that can also help you attract prospective employees:

  1. Paid sick leave. According to the Bureau of Labor Statistics, the average cost in 2016 to employers for offering paid sick leave was 35 cents per hour worked (or about one percent of total compensation). The benefits of a paid sick leave program may outweigh this cost. With paid leave, sick employees are more likely to stay home, decreasing the spread of germs in the workplace. Note: Several states and local jurisdictions require employers to provide paid sick leave.
  2. Health insurance. Health insurance can be a significant expense for employers, but you may find cost-effective options. For example, consumer-driven health plans (CDHPs), which are typically high-deductible health plans tied to a health savings account, are generally less expensive than traditional health plans. Additionally, small employers who meet certain eligibility criteria and who offer health coverage through the Small Business Health Options Program (SHOP) Marketplace may qualify for a Health Care Tax Credit. For more information on the Small Business Health Care Tax Credit, visit the Internal Revenue Service (IRS) website at
  3. Wellness programs. If you pair your health coverage with a wellness program, you may realize significant savings. Employee wellness programs are designed to reduce absenteeism and healthcare costs by promoting physical activity, improving nutrition, and creating a healthier workplace.
  4. Flexible work arrangements. Employees with the flexibility to reasonably meet the demands of their personal lives tend to be more satisfied with their jobs. They are also more likely to be productive and have higher attendance rates than those lacking a work-life balance. Flexible work arrangements may include telecommuting (work from home), compressed workweeks (such as four 10-hour work days per week), and flextime (early arrival or departure).
  5. Retirement programs. Small employers who have concerns about the cost and complexity of administering a retirement plan may want to establish a Savings Incentive Match Plan for Employees (SIMPLE) IRA. In general, employers must have 100 or fewer employees and no other retirement plan to establish a SIMPLE IRA. Employers may also consider establishing a 401(k) plan, which offers the advantage of permitting higher contributions and has no employer contribution requirement like a SIMPLE IRA plan. However, a 401(k) is generally more complex to administer than a SIMPLE IRA plan.
  6. Professional development. Providing employees with development opportunities is a low-cost benefit and an effective retention tool. Consider mentoring, job shadowing, and inexpensive professional development classes to help retain top talent.
  7. Recognition. Recognition is a simple, low-cost way for employers to motivate employees by showing appreciation for a job well done. Consider recognizing employees through an “Employee of the Month” program, an announcement in company communications, or a note from a supervisor or head of the company.
  8. Commuter assistance. The IRS allows employees to pay for certain commuting costs on a pre-tax basis (via payroll deductions), which may result in significant tax savings for employers and employees. The IRS also allows employers to subsidize certain commuting costs on a tax-free basis. These commuter benefits apply to qualified transportation benefits that meet certain requirements, including a ride in a commuter highway vehicle, a transit pass, or qualified parking.
  9. Employee assistance programs. EAPs are programs designed to help employees manage personal issues that may be affecting their work performance. EAPs typically cover financial counseling, stress management, substance abuse counseling, family therapy and crisis management. While fees may vary based on the type of program, EAPs generally cost about $15 to $25 per employee, per year.
  10. Employee discounts. Discount programs are popular among employees and are relatively inexpensive. Consider offering employees a discount on your own goods or services, or negotiate discounts with local retailers, restaurants, or gyms for your employees. If you don’t have time to start your own employee discount program, you can contact vendors who will manage your company’s discount program for a fee.


Franchises should assess which benefits make the most sense for their business, considering the costs, the impact they can make when trying to attract great people, employee demographics, and company culture.

Once you’ve hired talented people, there are certain steps you can take to help increase retention. By keeping employees on board and engaged, you can save time and money, while improving your bottom line.

Here are seven ways to help you retain top talent:

  1. Promote your company’s culture. Employees who feel a strong attachment to their company’s culture and values tend to be more loyal and engaged. Ask yourself if your values are clearly communicated to your employees (both at the time of hire and throughout their employment) and whether your policies and practices reflect those values.
  2. Develop effective leaders. An employee might leave their job because of a poor working relationship with their supervisor. To be effective, supervisors need proper training and guidance on performance management, communication, applying workplace rules and policies, and employee development.
  3. Create an attractive compensation package. An attractive compensation package can put your company ahead of its competitors. The right mix of direct compensation (wages, salaries, commissions, and bonuses) and indirect compensation (health insurance, paid time off, retirement plans, etc.) is key. Develop a total compensation plan that balances attracting and retaining top talent with keeping labor costs under control.
  4. Pay attention to your top performers. Top performers are typically harder and more expensive to replace. Consider performance-based bonuses or greater autonomy and responsibilities to recognize and encourage exceptional work.
  5. Provide challenges. Many employees seek challenging and varied work, two factors that can keep employees engaged. Where possible, design jobs with a range of tasks and allow top performers to work on new or high-profile projects.
  6. Communicate effectively. Poor communication can lead to misunderstandings, distrust, reduced performance, and other negative consequences that can increase turnover. Communicate openly with employees about the company’s goals and business results, and give employees multiple ways to provide you with feedback, such as regular staff meetings, an employee suggestion program and employee satisfaction surveys.
  7. Find out why employees leave. Conduct exit interviews with departing employees to find out why employees resign. Exit interviews can help you identify your company's weaknesses so that they can be addressed before the next employee leaves. Exit interviews can also be used to transfer knowledge to a successor or replacement.

To help limit turnover, understand what motivates your employees and develop programs accordingly. Investing in your current employees can help your bottom line while creating a positive, productive work environment that can help your franchise thrive. 


Neema Ardebili is Vice President of Business Development & Global Franchise at ADP Small Business Services.