How to Engage Franchise Employees

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Linda Blackshear is the type of employee every manager dreams about. As front-desk manager at the Holiday Inn Express in Columbus, Ga., she comes up with ideas to boost morale and let guests know she cares. Linda once checked in a group of young military men who were soon graduating from basic training. She asked them if their parents would be attending the graduation. All of them said yes except one. He told her that his mother had passed away when he was younger and that he later became homeless. At 18, he chose to go into the military.

Linda decided he should have someone at graduation show support and pride for him. When he saw her there, his smile lit up the room. She did the unexpected—and created a fantastic memory for her guest.

At Intercontinental Hotels Group (IHG), people like Linda deliver on our mission of creating experiences we define in the branding phrase “Great Hotels Guests Love.” Such employees are key to well-run hotels, outstanding revenue growth and delivery on brand promise. When people love what they do and see the difference they make in people’s lives, they deliver great results.

In hotels where our employee engagement scores are high, so are our customer satisfaction scores.

To build great brands at IHG, we need highly motivated and trained people who are inspired to deliver consistently high standards for our guests and superior performance for all our hotel owners. Yet IHG’s business model is based primarily on franchising hotels rather than directly owning or managing them. Approximately 86 percent of IHG-branded hotels operate under franchise agreements. About 14 percent operate under management contracts or are owned by the company. So, last year, for the first time, we began developing talent management programs for franchise hotels—and enlisting franchise owners’ support for providing such talent management initiatives. In April, our franchise owners began to tap select HR tools and processes to hire, train, involve and recognize employees. Let me tell you how we developed these new programs.

The Franchise Relationship

Unlike at the independently owned and operated franchised properties, we have direct control of quality and service standards only at our managed and owned properties.

During the past five years, our Global Human Resources group has developed a strong culture and an employment brand focused on employee engagement. Two themes define what we expect from our colleagues and what they can count on from managers and corporate leaders. The first is “Winning Ways,” the qualities we are looking for and the values we all share. The second is the “IHG commitment” to give every employee “room to be yourself.”

We’ve invested in world-class HR processes and tools to hire, train, involve and recognize team members in our corporate locations and in the hotels IHG manages for owners. There’s a sound business principle behind the ideal: Our brands are delivered by people on the front line. Proud, customer-focused employees such as Linda bring the brand to life for our guests through their behaviors and actions.

We’ve made financial investments in developing tools tailored to each of our seven brands. We know we’re on the right track because we conduct employee surveys twice a year to measure how closely managers deliver on our commitments. Ninety-two percent of employees say they are proud to work for IHG. Equally important, we can document higher guest satisfaction scores in our owned and managed hotels across all brands since we implemented this initiative.

Leaders in the hospitality industry have traditionally focused on the physical aspects of the guest experience—everything from beautiful lobbies to cool amenities. But in an industry where employee turnover is typically 30 percent—twice the average rate for all other sectors—and labor costs represent one-third of operating expenses, people are key. We can document that in hotels where our employee engagement scores are high, so are our customer satisfaction scores.

However, most of the people who work in IHG-branded hotels aren’t directly employed by IHG. They work for individual franchise owners who may own one or more IHG-branded hotels. The franchise owners face the same challenges we do. Hence, better HR tools and processes can assist the franchise community in achieving the results we’ve experienced.

Now, without mandating the employment practices of our franchisees, we’ve developed resources for franchise owners to use at their discretion to hire, train, involve and recognize their own workforces.

We chose to focus on tools and processes that offer the greatest impact on performance for front-line employees and provide a competitive advantage for the brands.

Our corporate colleagues in operations and marketing are among our biggest supporters of this measure because they see the competitive advantage that people deliver for our brands.

Having Tools Is Not Enough

Here are a few lessons learned from our journey:

Ask franchise owners what they want. Two years ago, we began asking our franchise owners about their needs. Sixty-five percent said they wanted help finding, developing and retaining employees. They identified this as a top challenge, indicating a clear business need.

Involve strategic partners. Gain the support of executive leaders and stakeholders from the legal, operations, finance and marketing departments. These individuals must join HR professionals in determining the constraints and opportunities of such a plan. We have a better plan because our partners made contributions.

Collaborate within human resources. IHG is a global company, so we set up work streams by subject matter and region. Our functional specialists in our HR Centers of Excellence at the global center and in each region are involved in building, communicating and delivering these tools to the franchise community.

Get on the road. Our ideas evolved as we discussed them with owners. We went to the owners’ association committee and board meetings. We spoke with franchise leaders and individual owners. We listened to and chatted with everyone about how to make this plan useful and easy to use.

Provide options. Some franchisees manage large organizations with multiple hotels; they have HR processes for their companies. Others manage small businesses where owners or general managers do much of the HR work. We are providing options, tailored by brand, that give them flexibility. And, owners can now leverage some of IHG’s existing business relationships with external vendors for employment background screening and measuring employee engagement. These will be available to owners at our negotiated prices.

Make it understandable and easy. Franchise owners will access all the tools through an easy-to-use website on the existing company intranet. They’ll go to the website, access their brand, choose their language and download the materials. Every brand has a personality; each set of HR tools reflects that specific brand.

Leverage channels already in place. Instead of creating additional training sessions, we are introducing the HR tools and processes as part of existing instructor-led brand service training scheduled in 2011, or through e-learning. This reduces time away from the office and expenses for franchise owners. Teams of area operational support managers and brand service consultants, who are already in the field and interacting with the franchise hotel teams, help support the HR tools and processes when owners choose to use them.

Communicate, communicate again. Repeat. On a global project such as this, with many parts and an aggressive deadline, there’s always a chance for misunderstanding. Regularly scheduled conference calls with our program work-stream leaders keep us focused and connected. We continue to listen to our franchisees.

Test. Prior to launching this program, we piloted these tools at select hotels to test ease of use. We connected with franchise HR professionals to gain their insights and refined our plan.

Measure what you treasure. In our first year, we will be gathering baseline information from franchisees and from guest satisfaction surveys. We will use the information to refine and improve the program.

At IHG, we know that engaged employees increase guest satisfaction, and hotels with engaged employees achieve higher financial performance. Our franchise leaders agree, and our relationships with them have never been stronger.

Highly motivated and skilled people like Linda Blackshear clearly understand how they contribute. They are essential to the strength of all our brands. As they proliferate, these HR tools and processes will give our franchise community another competitive advantage by supporting and developing such employees.

The author was senior vice president, Americas, for human resources and global learning at Intercontinental Hotels Group. She recently moved to AFC Enterprises Inc. in Atlanta, where she is chief talent and HR officer.