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As per the Franchise Employment Report-2011, franchise industry converts informal jobs into formal ones, transforming the unorganised business into an organised one. Here are some snippets from the report, which provides interesting employment statistics.
ALMOST 90 per cent of the Indians work in unorganised sector. According to NSDC estimates the total employment in the unorganised sector is expected to be about 420 million (92%) out of the total workforce of 450 million in 2008. The extent of informal employment is estimated to be at about 92-93 per cent between 2008 and 2012.
Employment in other countries
US, the largest franchise market, generated an estimated 96 lakh jobs this year. Although post downturn franchise employment has came down initially from 97 lakh in 2003, the number is increasing gradually with more and more unemployed population taking up franchise for self-employment. China, Australia and India remain the forerunners in franchise employment with respect to countries generating 30,7 and 8.5 lakh jobs annually, amounting to the franchise activity. Australia and India are two countries to have witnessed the maximum growth since 2003. It is estimated that in U.S 3.1 per cent of the total working population is employed in franchise industry while in India .2 per cent of the total working population is employed in the franchise industry.
The franchise industry generates total 8.5 lakh jobs in India. Most of the jobs are generated at the franchisee unit (60%) as the scalability of the business model enables job creation at multiple locations. The food & beverage and health & wellness sector being people intensive generates maximum jobs. Apart from this, the industry generates a considerable number of corporate jobs at various management levels.
Jobs at hierarchy levels
Franchise expansion and operations require well-defined skills and hence, generate maximum middle level (42%) and senior level jobs (45%). Only 12 per cent of the total jobs are at the entry level. So, the dynamics are quite predictable, as most of the jobs require a specific knowledge skills and abilities (KSA), which could be best addressed at middle as well as senior management levels.
Looking at the demand for various KSAs for franchise teams, business development leads the pack with highest demand (29%) followed by training (25%) and marketing (13%) at all levels. Amongst senior level jobs, 67 per cent contribute to business development and 33 per cent to training. A typical franchise team will have three to five people at entry level for business development in a particular franchise territory to manage the business of the franchisees in their respective areas, along with facilitating the company's local marketing as well as the new franchise development.
Middle-level franchise jobs generate many verticals such as business development (20%), training (30%) and operations (20%). They are responsible for the regional as well as national activities. The demand for important activities like legal and compliance is low, as both these activities are typically outsourced. Major activities of middle management include franchise development by adding new franchisees in the region, devising and executing business and sales strategies to build new business and meeting/exceeding sales quota, building and implementing account strategy to maximise its revenue streams and margins in accordance with the company expectations.
The responsibilities also include participating in setting strategy and tactics for each specific sales objectives, working knowledge of the competitive landscape and the regional business market, providing required weekly status/progress and forecasting work reports with extended franchisee team, including executive team, product marketing, product management and sales operations, to achieve sales and revenue objectives, making strategies for royalty recovery from the franchisee centres as well as developing strategies for events and media planning.
Senior management jobs are majorly contributed by business development as well as marketing (18%). A typical hierarchy in business development franchise team is: regional manager, area manager and territory managers. Training functions are normally based at the head office. Franchise teams generally manage the complete brand portfolio of companies, including the umbrella brands. The national franchise head is responsible for pan-india franchise operations. Training department has people from the HR department of the company and typically has three auditors for franchise compliance.
Franchise marketing jobs are the highest paid. Senior level marketing professionals can command a salary of minimum Rs 12 lakh and at least Rs 6 lakh per annum for a middle-level position. Other high paying jobs include business development and training, which are critical for any franchise network. Average compensation for an entry level position is Rs 1.8 lakh and Rs 4-5 lakh for the middle management jobs and Rs 12 lakh for senior level jobs.
Franchising generated jobs not only in metros but in tier I, II and III cities too. It brought both self-employment as well as corporate jobs to the smaller town of the country. However, due to lack of skilled and trained workforce, entry-level positions are still limited. Nonetheless, the franchise industry is growing at a steady pace, providing unlimited employment opportunities.
(Inputs by Shimona Talwar and Harsh Sinha)