Overseas Training Tips: International Staffing can be Very Different

By: William Edwards | 6,595 Reads | 3 Shares

Featured in: Franchise Update Magazine: Issue 2, 2015

%3Cp%3EOne+of+the+largest+challenges+in+franchise+development+is+finding+and+keeping+the+right+people+in+the+right+places%2C+from+the+top+of+the+franchisor+office+to+the+front-line+employees+at+each+franchised+location.+%3C%2Fp%3E%0D%0A%3Cp%3EA+franchise+provides+a+systematic+way+to+conduct+business+that%2C+if+followed+properly%2C+produces+a+reproducible+margin.+This+is+true+no+matter+whether+the+franchise+is+located+in+the+U.S.+or+another+country.+What+does+a+good%2C+profitable%2C+proven+franchise+bring+to+a+country%3F+A+proven+business+system%2C+a+brand%2C+manuals+with+job+descriptions%2C+technology%2C+marketing+programs%2C+sometimes+a+%22magic+sauce%2C%22+and+training--lots+of+training%2C+for+all+levels+of+employees.%3C%2Fp%3E%0D%0A%3Cp%3EHowever%2C+one+common+aspect+of+franchising%2C+no+matter+what+the+country%2C+is+the+%3Ci%3Epeople%3C%2Fi%3E+required+to+make+the+business+operate.+And+one+of+the+biggest+challenges+franchisors+face+is+staffing+franchised+units.+While+local+adaptations+may+be+needed+for+a+franchise+to+operate+successfully+in+another+country%2C+and+while+local+laws+and+regulations+vary+by+country%2C+the+business+system+behind+the+franchise+must+be+followed+for+the+franchise+to+succeed.%3C%2Fp%3E%0D%0A%3Cul%3E%0D%0A++%3Cli%3E+%3Cb%3EFollowing+a+franchise+business+system.%3C%2Fb%3E+One+of+the+first+challenges+in+working+with+people+from+other+countries+is+cultural.+When+it+comes+to+working+for+a+franchise%2C+the+concept+of+%22following+the+system%22+is+well+understood+in+the+U.S.+But+in+many+countries%2C+it+takes+time+to+educate+new+staff+on+%3Ci%3Ewhy%3C%2Fi%3E+they+should+follow+someone+else%27s+business+system.+For+a+franchise+to+succeed+in+the+U.S.%2C+a+training+program+is+needed+for+the+staff%3B+manuals+are+also+required.+In+some+emerging+markets%2C+a+structured+system+is+not+common.+Thus%2C+training--and+explaining+the+reasons+for+doing+things--is+critical.%3C%2Fli%3E%0D%0A++%3Cli%3E+%3Cb%3ELocal+laws+and+regulations.%3C%2Fb%3E+Some+countries+have+labor+laws+and+regulations+that+hinder+profitable+operation+of+the+franchised+business.+For+example%2C+European+countries+have+very+high+social+costs+and+taxes+associated+with+employees.+The+social+costs+can+be+60+to+70+percent+of+the+total+employee+cost+to+the+employer.+Also%2C+it+can+be+very+hard+and+expensive+to+terminate+an+employee.+Many+years+ago+when+I+was+working+for+the+AlphaGraphics+print+franchise%2C+we+had+a+master+license+in+Belgium+who+hired+an+apprentice+printer.+After+three+months+it+became+apparent+that+this+person+was+unable+to+produce+a+quality+product+for+the+customer.+Terminating+this+person+required+90+days+of+paid+notice+and+a+cash+payment+when+he+left+of+US%24100%2C000.%3C%2Fli%3E%0D%0A++%3Cli%3E+%3Cb%3EFinding+qualified%2C+skilled+staff.%3C%2Fb%3E+Another+challenge+of+franchising+in+other+countries+is+finding+qualified+management+for+new+locations.+Many+countries+do+not+have+a+skilled+employee+base+to+draw+upon.+A+full-size+restaurant%2C+for+example%2C+can+have+60+employees+for+three+shifts%2C+including+3+to+6+managers+of+different+skill+levels.+Often+the+solution+locally+is+to+hire+away+managers+from+other+Western+F%26B+brands+to+run+the+first+new+franchise+restaurant+in+a+country.+In+the+case+of+China%2C+it+is+hard+to+find+staff+to+hire+with+the+desired+business+experience+and+skills%2C+which+requires+a+very+large+investment+in+training+staff+at+all+levels.+Often+we+see+franchises+hire+senior+management+to+run+China+franchise+units+from+Hong+Kong+or+Taiwan%2C+locations+that+have+had+franchises+for+decades.%3C%2Fli%3E%0D%0A++%3Cli%3E+%3Cb%3ECustomer+service.%3C%2Fb%3E+Customer+service+is+part+of+the+franchise+training+program+we+expect+in+the+U.S.+Elsewhere%2C+customer+service+is+not+trained+or+part+of+many+businesses.+In+fact%2C+many+international+licensees+acquire+a+U.S.+franchise+primarily+for+its+detailed+training+programs%2C+including+the+CSR+training.+Again+going+back+to+my+time+as+senior+vice+president+of+AlphaGraphics%27+international+operations+and+development+department%2C+we+opened+our+first+store+in+Istanbul+and+had+a+great+staff+that+eagerly+soaked+up+all+the+training+we+could+give+them--including+CSR+training.+On+the+first+day+the+store+opened%2C+a+Turkish+businessman+entered+to+see+what+this+brand+was+all+about.+The+very+eager+young+lady+at+the+counter+rushed+up+to+him+and+asked+how+she+could+help+him.+This+was+so+different+from+other+stores+that+the+man+literally+ran+out+of+the+store+in+shock%21%3C%2Fli%3E%0D%0A%3C%2Ful%3E%0D%0A%3Cp%3EWaiters+in+the+U.S.+are+often+part-time+while+they+are+getting+an+education+or+working+in+a+second+job.+In+parts+of+Europe%2C+however%2C+being+a+waiter+is+a+career%2C+a+profession+sought+out+by+people+wanting+to+better+their+lives+and+those+of+their+families.+It+is+necessary+to+take+this+into+account+in+operating+F%26B+brands+in+such+locations.%3C%2Fp%3E%0D%0A%3Cul%3E%0D%0A++%3Cli%3E+%3Cb%3EPart-time+staff.%3C%2Fb%3E+The+concept+of+part-time+help+is+common+in+the+U.S.+and+helps+staff+franchises+of+all+types+efficiently.+However%2C+in+some+countries+part-time+help+is+discouraged.+Whether+the+store+or+restaurant+needs+the+entire+staff+on+a+part-time+basis+or+not%2C+they+can+end+up+paying+for+them+as+full-time+employees.%3C%2Fli%3E%0D%0A++%3Cli%3E+%3Cb%3EThe+cost+of+staff.%3C%2Fb%3E+The+cost+of+labor+varies+widely+around+the+world.+While+a+franchised+restaurant+in+the+U.S.+might+have+a+labor+cost+of+30+percent+of+gross+sales%2C+in+the+Nordic+countries+this+cost+can+be+50+percent%2C+and+in+China+15+percent--often+for+the+same+quality+of+staff%21+%3Ci%3EThe+Economist%3C%2Fi%3E+magazine+publishes+their+%22Big+Mac%22+country+index+twice+a+year.+On+a+specific+day%2C+people+associated+with+the+magazine+visit+a+McDonald%27s+in+58+countries+and+buy+a+Big+Mac%2C+large+order+of+fries%2C+and+a+large+diet+drink.+They+convert+the+total+price+into+U.S.+dollars+for+that+day.+The+basic+Big+Mac+Index+is+a+comparison+of+the+cost+from+one+country+to+another.+The+differences+are+caused+by+many+factors%2C+but+labor+is+a+major+component+of+the+cost.+The+average+price+in+the+U.S.+for+this+meal+is+about+%244.80.+In+Norway%2C+it+is+more+than+US%247+in%2C+and+in+China+it+is+US%242.%3C%2Fli%3E%0D%0A++%3Cli%3E+%3Cb%3EKeeping+good%2C+trained+staff.%3C%2Fb%3E+At+the+start+of+a+new+franchise+in+a+new+country%2C+the+franchisor+typically+trains+the+new+local+management+at+its+home+country+headquarters.+Then+the+franchisor+comes+to+the+new+country+and+trains+the+local+staff+that+will+run+the+operations+of+the+local+unit.+But+the+franchisor+cannot+come+each+time+new+staff+is+hired.+The+solution+for+many+franchisors+is+to+train+the+trainer--a+local+person+who+has+spent+months+at+the+franchisor%27s+headquarters+learning+and+relearning%2C+and+then+training+staff+in+how+the+franchise+should+operate.+One+caution%3A+in+emerging+markets%2C+expect+high+staff+turnover+as+training+staff+is+hired+away+by+other+franchises.+%28This+is+an+extremely+difficult+problem+in+China.%29%3C%2Fli%3E%0D%0A%3C%2Ful%3E%0D%0A%3Cp%3EIn+summary%2C+staffing+challenges+are+global.+What+is+also+global+is+the+requirement+that+the+person+representing+the+franchise+to+the+end+customer+be+trained+and+provide+good+customer+service+so+the+franchise+will+succeed.+Just+like+at+home%21%3C%2Fp%3E%0D%0A%0D%0A%3Cp+style%3D%22border-top%3A+3px+solid+%23DDDDDD%3B%22%3E%3Ci%3EWilliam+Edwards%2C+CEO+of+EGS+LLC%2C+has+40+years+of+international+business+experience.+He+has+lived+in+7+countries%2C+worked+on+projects+in+more+than+60%2C+and+has+advised+more+than+50+U.S.+companies+on+international+development.+Contact+him+at+949-375-1896%2C+bedwards%40egs-intl.com%2C+or+read+his+blog+at+edwardsglobal.com%2Fblog.%3C%2Fi%3E%3C%2Fp%3E%0D%0A

Published: November 25th, 2015