I’m heading to IFA next week, and I’ve been thinking about a question I keep getting asked: “Is it a good time to hire right now?”
It’s a fair question. The headlines have been all over the place. December’s jobs report was weak, with only 50,000 jobs added. The January jobs report just came out and it is looking a bit better than expected.
But a headline doesn’t tell you much about what’s actually happening. In fact, for franchise systems, this might actually be a good hiring environment. Let me explain what I’m seeing.
And yeah, I know… first real Clint’s Notes post and I’m a day late, diving into labor market analysis. But if I’m going to do this every week, we might as well start with something that matters.
Headlines miss the story
Monthly jobs reports create whiplash. One month looks terrible, the next looks better, and back again. But for franchise businesses — whether it’s a restaurant, fitness studio, or home services company — macro number doesn’t tell you much.
For example, I looked at the breakdown by industry for the December report. Private Education and Health Services added about 700,000 jobs. Leisure and Hospitality added close to 200,000. Construction was relatively flat, likely due to higher interest rates. Retail was also flat. Meanwhile, the January report actually showed gains, mostly due to Healthcare and Construction.
Collectively it’s not a boom, but not a bust either. The industries where most franchises operate are doing fine.
Two different labor markets
There’s a huge gap right now between office jobs and frontline jobs.
Tech companies are still deep in layoffs. Corporate America is obsessed with doing more with less. If you’re an office worker right now, I know the job market is brutal.
But the job market for frontline workers is different. You can’t automate a massage therapist or replace a restaurant manager with ChatGPT. Service businesses that want to grow still need to hire real people. And frontline roles have higher turnover, which means there’s nearly always hiring activity.
From what we see in the reports and from talking with franchisees on the ground, frontline hiring is still competitive. Franchises are competing with every other restaurant, gym, or spa for the same hourly workers. Skilled workers like electricians, nurses, and childcare providers remain in high demand. Not much has changed there.
The hidden opportunity
The massive corporate layoffs have created a pool of experienced professionals who are reconsidering everything about their careers.
A few years ago, someone with a decade of corporate operations experience wouldn’t even look at a franchise operations manager role. Now they’re reconsidering where they want to apply their talents and open to shifting industries.
Maybe you think adding another person right now isn’t your best move, especially not a senior role. But you don’t know until you meet that person.
Making a strategic hire
If you’re deep in it running a franchise, you’re probably thinking: “I need to hire another server” or “I need to replace the technician who just quit.”
Fair. You probably do need to make those hires.
But what if you were also able to make the strategic hire that could actually change your business?
Think about where you spend the most time. Are you still doing sales calls you wish you could delegate? Managing day-to-day operations when you could be planning the next location? Doing admin work at 10 PM because there’s no one else to do it?
The person who could take that work off your plate might be available right now. Maybe it’s an operations manager who can oversee multiple locations. Maybe it’s a salesperson with a proven track record. Or a bookkeeper who can save you hours.
That’s the strategic hire that changes everything. And those people are rethinking their careers right now.
What to do right now
These are the three things I’m telling CareerPlug clients to focus on right now:
- Look for the strategic hire, not just the backfill: Don’t only think about replacing the person who left. Think about the role that would actually change your business. Go beyond the immediate need and look to the future.
- If you need to hire in the next six months, don’t wait: Post the job now. You might find someone skilled enough to make you want to hire them immediately. Yes, you’ll pay them for a few extra months. But you’ll have them trained and producing value sooner. The cost of waiting almost always exceeds the cost of action.
- Don’t hold onto underperformers: A few years ago, it was so tough to hire that many employers felt like they had to hang on to whoever they had. That’s no longer the case. Give each employee the “Keeper Test” from Reed Hastings’ book No Rules Rules: “If this person were to leave tomorrow, would you fight to keep them?” If the answer is no, start looking for someone who would make you say yes.
The person who could transform your business might be looking right now. Don’t get spooked by the headlines and wait too long.
See you at IFA
So is now a good time to hire?
If you’re going to be at the conference next week, find me and the CareerPlug team at booth 700 and let’s discuss in person. I want to hear what you’re seeing in your hiring… what’s working and what’s not.
More next week,
Clint