You know who you are — the franchise owner who struggles with the conflicts between working “on” or “in” the business. You’re not alone — this happens in franchises of all sizes. Owners may come into a franchise with a lifetime of experience in their industry after working their way up through the ranks. Or maybe they had the urge to take on a new challenge. In either case, the temptation to work the business yourself is a big one.
But whether you own a small franchise and are just beginning to staff up, or have a larger franchise with multiple employees, the fact is that you can’t do it all.
So where is your time best spent? Although you may be more comfortable staying “in the weeds” (working in your business), the most successful franchisees realize they need to focus on developing strategies, coaching employees and generating new clients (working on your business).
Of course, this is easier said than done. There are only so many hours in a day or week, despite the time you put into the business. One solution gaining momentum among successful franchisees is that of outsourcing HR functions to a professional employer organization (PEO) for HR-related tasks such as workers’ compensation, payroll, benefits, policies and procedures, hiring, termination and the myriad tasks many franchisees would prefer to ignore.
What to Know About Workers’ Comp Costs
Workers’ compensation is often top of mind for franchise owners. They know they need it, but assume all rates are created equal. We advise our clients that rates, while set by states, are also based on the size of the operation and eligibility for discounts based on a documented safety program or drug-free workplace. The most important factor, though, is the loss history and ability to qualify for an experience modifier.
But there’s more to it — and that’s premium costs. A combination of safety training and audits, creation of a safe work environment and enforcement of safety rules, as well as a wise selection of carriers, can make a difference in premium costs. Here’s where a PEO can help with developing safety programs and offering more favorable premiums.
What About Payroll?
It’s only after you start doing payroll yourself that you realize how time-consuming it is, along with the risks and minefields that await you with reporting and compliance. Payroll is more than just cutting checks — it’s also the time you spend compiling timesheets, checking pay rates and verifying deductions and garnishments. And that’s before you face reporting, fines for late reporting and the many regulations imposed on businesses. It’s not practical to hire all the help you need and you know you didn’t start your franchise to do payroll, reporting and compliance.
So why “do it yourself” when you can work with experts who take the burden off you?
And So Much More …
Although workers’ comp and payroll may be at the top of the franchisee’s list, they are often just the tip of the HR iceberg. There’s also the need for benefits selection and management, customized employee handbooks (what we consider the first line of defense against litigation), job descriptions, anti-discrimination policies, hiring issues, progressive discipline, termination processing and so much more.
The good news is that all of these services are available, under one roof, with one vendor who can offer assigned team members in each service area. Even better is that the right PEO can do it affordably, often for less than what larger franchises pay staff members or multiple vendors — which is surprisingly affordable for small franchises. Combine that with the benefits you gain by having more time to focus on sales and marketing to build your franchise’s business, and we’d say that’s a pretty good recipe for success.