[Stonehenge]

I've been finding that over the last 6 years of the life of my business, the primary employees I seem to attract are those that are very young. 19-22 seems to be the main age bracket.

On the up side, they tend to be young and fit. On the down side, for the most part they live at home, are not very motivated or are lazy, don't always bring a great attitude to work and can have there heads turned for $.25/hr more than what they're making now.

I haven't been able to attract too many people older than 22. These folks tend to be a bit more stable, having been around the block a few times, maybe have kids. To me they seem to be a bit more responsible, having a good deal of responsibilities already (more than someone living w/ Mom and Dad). The problem is, I never seem to be able to offer a package that these kinds of people want. What's more, if my business is ever going to start getting bigger, I need to have a few good people on board for awhile.

With that, what kind of package would be reasonable to attract these kinds of people?

When you hire these folks, what's their starting wage (range)?

Do you offer Medical/Dental? How much do you lay out for their bennies?

Are there other fringe benefits you offer?

I'm at a point (I've actually been at this point for awhile) that I have a hard time stomaching training most or all new employees each year, and I've seen the benefit of keeping people around for more than a year. I'd like to make it more, and I'm no longer afraid of writing bigger checks.

Also, what about winter work? Plowing here is spotty at best, and we're not into it yet, so what can be done there? Do you offer medical through the winter, even though they aren't employed? Lay them off and cross your fingers that they return in spring?

I want to provide a long term, stable job for a few people, but am not sure how to go about doing it.

Ok, I'm rambling a bit here, I guess because I've been faced with this each Spring and am really tired of it. Any help would be monumentally appreciated.

Jeff

[Bexter]

There is allot in your post to address ... I'll try and touch on a bit of it.

We will start and experienced guy out at around 15 per hour ... not really sure this is worth mentioning because of the cost of living differs so much from country to country...area to area.
We also offer a substantial amount of overtime pay (after 8hrs)... It really doesn't cost you that much in the long run if you take everything into consideration.... whole other topic and I’m sure many will disagree.

I think that the bigger you get the more work you can offer a couple guys work in the winter ... could you bank hours after 40 and give them a steady 40 hour check almost all year ?... I don't know ...check with a labour lawyer on that.

We lose our fair share of people every winter .. I envy companies that can work all year round ... We are a great company to work for but the reality is we can't keep everyone on all year round.
Another thing we found useful was finding a few guys work at another seasonal business for the winter ... they were driving trucks for a oil rig camp supply company .... come spring they lay them off.
Snow plowing .... we are very small ....did about 20k worth this winter ... it did help pay a bit of the wages.

I've thought about firewood ... has not gone any further than that. Just break even on it to keep another guy employed?

Perhaps making gazebos ..trellises ... benches ... to sell retail.

Also something we do ...have guys alternate taking time off ...most guys won't mind having a bit of a break.

I feel the bottom line is ... it is the nature of the beast in a seasonal business ... work on building that business so that you can afford and actually need a few guys around to do repairs etc.

[Stonehenge]

Yeah, there was a lot to address in that post - I guess my frustration just bubbling over....

I'm almost considering trying to offer a salary, or offering a higher pay that might allow them to get laid off in the winter and still do fine financially. The higher pay or salary would be a one or two year thing while I work to build a winter biz - part of my struggle last year was the chicken and the egg w/ winter work: I didn't want to chase after plowing contracts if I wasn't going to have any employees to push the snow, but I couldn't hire a year-round employee until I could promise winter work.

I cringe a little at the idea of having to build a second business (or third, I guess ) just to handle winter work, like buying woodworking tools and then investing in education, but at the same time I know I'm going to have to knuckle under at some point and do something.

Were there any other winter businesses besides the oil rig driving that worked out?

[Stonehenge]

I sort of lost track of this question - if you provide medical/dental bennies, how much do you spend per employee (avg) annually on these benefits? $1K? $2K? $5K?

[Rex Mann]

Jeff,

When I was in Ohio I was in your shoes. We did not work year
round. It was hard to get, train and retain good employees. I had my fair share of good ones. However, most were as you described.

Luckily in Phoenix, we can do pavers year round. We have mostly Hispanic workers. We do not offer them any medical or 401K. We offer them something better (in their eyes and ours). We help them become legal US citizens. We hire the attorney and pay all the fees. It also ties them to our company during the long process. Don't misunderstand me, I am not saying they had to "make a deal with the devil". Its a win win situation.

BTW: All of our foreman have been with us for at least 5 years. I could only dream of those types of retention numbers in 8-month season Ohio.

Peace,

[Stonehenge]

How much does it cost for all of that legal wrangling? Can't be cheap. Then again, you only have to do it once per employee.

[Rex Mann]

Jeff,

It ranges between 3 to 5K per guy.

Peace,

[Stonehenge]

Update:

I had a breakfast meeting with a candidate for whom I'm wanting to make some of these compensation plans for.

He's an ex-Marine, good guy, softspoken, seemed to do very well while in the Marines. (Lanelle, I told him about your annual beds )

I laid things on the line for him, told him I wanted to offer someone a salary, and that it may mean that for a portion of the winter I'm paying this person to essentially do nothing. I dug a little more into his work history, asked him a few more direct questions about some issues that I wanted clarification on, and then laid out a plan where we'd start with an hourly wage, and if things appeared to be progressing well for both of us (I continued to see more potential in him, and he still liked the idea of a long-term relationship), then we'd move to a salary arrangement.

I'm still unsure how much $$ I should sink into a benefit package, and would like to get more input here, if possible. I want to begin to build this company into a place where normal people, with spouses and families, can earn a decent living. Not just a place where I take a young person, wring him out and toss him aside.

Oddly, I found it cathartic to be so upfront about the winter work situation - I normally tried to call as little attention to that as possible. I brought the issue front and center and it seemed to make things easier.


Anyway.....

What kind of dollars are reasonable to drop on medical bennies?

[dan deutekom]

I certainly do not have the answers to the labor problem. Just observations. The first is that landscaping isn't considered as a skilled trade (with which I disagree) for the most part. This discourages a lot of younger people from making it a career. Second it is hard heavy work with terrible hours. When the rest of the population is in holiday mode it is our busiest time. The wages are either feast or famine. (Try to raise a family on that). Most companies are small family business with no place to advance for the employees. The wages are not very good compared to other low skill jobs in factories, especially when you only have 8 months of them. So the real good guys either start up on their own or end up working for larger companies that can afford to provide a decent steady income that the experienced older guy deserves. In larger companies these experienced older fellows are given the responsibility of running their own division or crews with the same turnover of younger employees that plagues the smaller companies. It is hard for a small company to provide for a management type of person. For a while you have to take a loss so that you can develop more business to pay for him. But by having this manager you will be able to have the time to do this. If you wait until you can afford this type of person you will lose business because the small business owner can only do so much before they are overwhelmed.

[Stonehenge]

Dan - you and I are on exactly the same page. I am ready to take a financial hit, right now, if it meansthat I can start with one guy who is capable of running a crew.

To me, that means a salary - talking with lawyer about how to make that happen.

That also means medical and dental - I'm on board with that, too.

Investments, 401K? One step at a time....

But I have grown this company to as large as it can possibly be, with me having the sole leadership position. Heck, last year I had more trucks than I did guys - I've dumped far more into the biz than most reasonable people would do, given the company size: 6 brick saws, 3 compactors (1 large one to be added shortly), 7 wheelbarrows, hand tools up the wazoo, sod cutter, bed edger, rototiller, 2 lasers...only one skidsteer .... I have everything I need to run 2+ crews, except the people.

But to the first question I had - how much is a reasonable amount to spend, on an annual basis, on benefits for an employee? $2K? $5K? I'm willing and able @ $2K, able and a bit less willing @ $5K, but I don't have a good sense if what a reasonable amount is.

[Paul]

Ok then this might open up a can of worms........... Have any of you thought of a union (gasp) shop? It seems to add stability to our shop and benifits are there for them.

[Bexter]

Union …Yikes! Now there is a word that most owners don’t want to hear. I can definitely see how there would be advantages to it… a steady supply of qualified workers and if they didn’t work out you would not be stuck with them for any length of time. Call up the union hall to send you another one. They also usually make decent money with benefits.
I heard a rumor of a Landscapers Union in Toronto …maybe Diginahole has some info on how they work if indeed there is one.

I believe it’s tough finding balance between adding overhead and adding revenue. As your business grows you have to add key people but as each position is filled you’re adding overhead. If you feel you have reached your capacity in your position …. And it sounds like you have, then it’s probably time to add some overhead. Ask yourself…if someone else was running the jobs would I be able to sell more work.
I believe it's called GROWING PAINS.

[Stonehenge]

Absolutely. Selling the work is not a problem. Ran some numbers when Paul asked this question a few weeks ago - I believe that with an additional $5-10K in advertising to generate more leads, and if I had the time to better work some of the leads I already get (some fall by the wayside just from lack of time), that I could sell $750,000/year.
That's with me just doing sales and design, with a little jobsite supervision wedged in there somewhere...more like drive up and yell:

GET TO WORK!!

Just kidding...

That's 3 appointments per day, 5 days per week. Close rate is 70-80%, and most clients take 2 meetings to either decide to hire us or not. So that means approx. 1 sale each day. Avg contract size for us is currently approx $6k. Avg season is 140-160 work days per year. I'd sell in late fall and winter, but for this post I'll ignore that.

Generating revenue does not appear to be the limiting factor.


But I'm looking for some quick and dirty numbers re: how much to spend on bennies.

And yeah, the 'U' word scares the crap out of me. Wait...can I say that?

[Lanelle]

I doubt that anybody is going to edit your post Jeff, so you can say whatever you want to.

[Stonehenge]