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Why diversity matters for franchises

Written by Jon Card on Monday, 07 March 2016. Posted in People

Having a diverse workforce isn’t just about equal opportunities. In fact, employing people of all races, ages and backgrounds can breathe new life into a franchise

Why diversity matters for franchises

Diversity in the workplace is a laudable aim that receives much lip service from business leaders. However, in reality, it’s an area where many fail to make progress. There are various explanations for this but ultimately it must be admitted that the UK simply isn’t as meritocratic as most would want it to be.

The franchise industry cannot be fully exempted from this critique. However, it does appear that franchises – reliant as they are on processes, criteria and best practice – are significantly more successful in creating diverse workforces than other businesses.  According to the bfa’s most recent statistics on diversity, 81% of franchisees describe themselves as white British, which is roughly in line with the general population. The statistics go on to show that only 70% of newer franchisees were white British, suggesting the industry is embracing racial diversity.  

However, the sector still appears to have some issues attracting women as 77% of franchisees are male. Cathryn Hayes, head of business support for the bfa, says the industry needs to do more to promote the success stories of women in franchising. “There is still more to do to ensure that the sector fully reflects the diversity of the UK,” she says. “For instance, the 2015 bfa NatWest survey showed that the number of female-owned franchises is only 23%.”  

Customers

A diverse workforce tends to bring a variety of perspectives and outlooks, enabling businesses to think more clearly about the people they are serving and fine-tune their offerings accordingly. Rachael Saunders, director of Business in the Community, which promotes ethical practices in the workplace, says the UK is projected to become increasingly racially diverse. She believes it’s time for all employers to rethink their hiring practices as those that fail to recruit from a wide pool of backgrounds are less likely to be successful than those that do. “Employers whose workforces do not reflect the customers and communities they serve risk losing out on the best talent and the benefits they can bring to a business,” she says.    

Saunders points to research from business consultancy McKinsey & Company that shows organisations scoring well for gender and ethnic diversity were more likely to outperform those that did not. She says that too many businesses are overlooking the benefit of employing older staff and the UK’s economy is suffering as a result. “Business in the Community’s own research found that older workers who had been pushed out [of work] could contribute up to £88bn annually to the UK economy,” she says.  

To make their recruitment process reflective of society, franchises need to put a range of procedures in place. Saunders says the best approach is to measure diversity in the organisation and then set targets. “To ensure their recruitment processes are fair and open to all, we would encourage all employers to set and publish recruitment targets for diversity and hold senior leaders accountable for achieving these targets,” she says. “External recruitment agencies should be made aware of them too.”  

Problems in the hiring process can appear at any stage and franchises aiming to get a crystal clear view of recruitment need to take data from each step of the process, Saunders suggests. “Employers should also measure and monitor recruitment of women, ethnic minorities and older workers throughout each stage of the process,” she says. “This data can then be used to identify gaps and barriers in the recruitment process and ensure it is accessible to everyone.”  

In addition, franchises should train staff on the subject of unconscious bias as part of their usual training procedures. “Staff training on issues such as unconscious bias and inclusive management can help to reduce groupthink, which may impact recruitment and progression processes when people unconsciously select those who look, think and act like them,” says Saunders.  

Employers often complain that they struggle to get a broad mix of candidates and can only recruit those that apply. However, franchisors aiming to boost diversity should consider how jobs are advertised in their networks and realise that different channels appeal to different groups. “Employers should ensure they use a wide range of recruitment channels in order to reach the widest possible talent pool,” says Saunders. “For example, younger people may prefer to use social media channels to find out about vacancies, whilst older people may stick to tradition and look at newspaper advertisements.” 

 

Best practice  

Perhaps one of the reasons the franchising industry is more diverse than the wider business sector is that it has such stringent criteria and processes in place. For many in the franchise industry, diversity is a by-product of a meritocratic approach to business. Martin Bunney, head of franchise recruitment at Belvoir, the lettings and estate agency franchise, says a franchise that is not diverse is probably not recruiting the best people. “In a way I would advise that any business focuses on the best outcomes,” he says. “If this does not result in diversity then an opportunity has likely been missed. Our portfolio certainly benefits tremendously from all walks of life.”  

Figures released from Belvoir to Elite Franchise show that about 14% of its franchisees are from different ethnicities, with some of their white franchisees coming from countries other than the UK. Approximately 29% of Belvoir’s franchisees are women, a higher number than the franchising industry average. Bunney says its staff recruitment and training programmes are also designed to avoid any discrimination. “Our primary aim is to ensure we have a robust business plan that’s supported by the right people operating a franchise,” he says. “At no stage do we discriminate against ethnicity, gender, race or religion. If you met our owners it would be patently obvious that this is the case.”

Some industries benefit from diversity, whereas others simply demand it. The fashion and beauty industry is one such industry, suggests Andy Phouli, chairman of Rush Hair and Beauty, the hairdressing franchise. “Hairdressing is a very diverse industry as a whole,” he says. “Hairdressers thrive on interacting with colleagues, peers and clients from all walks of life.”

Rush promotes its business across B2B channels and social media as it expects this to help it reach a wide audience and therefore attract a diverse response. “The majority of our advertising and promotion focuses on industry B2B publications, which we know from experience reach a wide audience,” says Phouli. “Our other main channel of promotion comes from social media, which is all-encompassing.” The company also has a robust equal opportunities policy and Phouli says employees are encouraged to report incidents if they feel it has fallen short.

Nevertheless, he stresses the recruitment of franchisees is based on the ability to do the job and nothing else. “The nature of our industry means that we haven’t faced any diversity issues in franchising,” he explains. “Our franchisees are selected on their ability to run a successful business. If they meet the requirements, show strong leadership and customer care skills, that is what matters to us.”  

About the Author

Jon Card

Jon Card

A writer and journalist specialising in small business and enterprise, Card works as a freelancer for The Guardian and was previously editor of Birmingham Living magazine. He is a proud father of a gorgeous little boy and a big fan of the USA.

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