[Rick Carver]

I attended a dinner last night, put on by the U of D Ag dept. for the Small Bizz mentoring program that they sponsor. All the folks who were there are Landscapers, Irrigation, Hardscapers etc.
I mentor to 6 company owners in the program.

I was listening to a group of owners who were talking about how they have problems finding the employees they need to hire.
It was very interesting to hear the different problems that these folks talked about.

One issue stuck out. How to figure employee compensation.
One guy said he ask's the prospect what they know and figures from there. Start's all his guys out at 8 bucks and takes it from there. Another says he starts out at 12 bucks because he can't find anyone to work,,, etc,,, etc,,, this was the norm of the talking.

I asked if they ever looked at there numbers, first, to see exactly what they can afford per hour? No, was the answer. Everyone seemed to have the same direction regarding this issue,,, "what ever it takes".
I asked again,,,, well if you don't know what you can actually afford per hour to start with,,,,, how can you ever actually know what TOTAL compensation is affordable throughout your operation for everyone else who is on staff already?
So we talked on and on with Ideas and how to set up compensation packages that were within the companies labor budget.
Some folks will be offering less to start,, then have built in increase when certain tasks have been taught to do. Some started thinking hard about how they can compensate their already on staff employees more fairly and most importantly --- MORE CONSISTENTLY with the needs of the operation tied in.
One guy who has plenty of leads for help, can't get the guys to work. HUH??? DAHH!!! But,,, (sigh),,, he feels he has to pay a guy to pick these guys up and drop them off each day.
I suggested to pay a portion of the bus ticket that will bring the guys close enough to the shop that they can walk the 3 blocks to work and back to the bus line afterwards,,,,, Maybe he said!!!

My point is guys and gals,,,,
How do you do it? How do you come with the figure to offer newbies, and how does your creative brains work when calculating and comming up with total compensation for our employees who are sticking wid us through thick and thin?
Anyone have some cool/unique incentives that they offer employees that calculates into labor budgets? Or even what incentives calculates into overhead budgets? Not looking for the normal stuff like health care,,, etc some different stuff?

Rick

[Bill Schwab]

Rick:

We first start with the standard model employee. From the factory in Guatamala, speaking the two languages they learn at home, Mayan and Spanish as the second language. As with many countries south of the boarder, 99% of the guys quit school in the 4th or 6th grade to help in the home farm, which may be 10 acres or less. They have been given as standard equipment a work ethic second to none and a loyalty as long as we teach and give back for their hard work, which I will get to later.

Base salary starts at $12.00 per hour, and this is budgeted into each job we sign.

If they have taken the incentive to learn English, even broken English, they start at $1.00 per hour more. If they can read, (we have 2 in Adult reading classes, so they can help thier kids when they go to school forst, and second to advance within our company) they will recieve $1.00 per hour more. If they have a valvid D/L with a clean record they will start at yet $1.00 more per hour in pay. After we have given them the proper safety training in the turck and trailer combo they would be driving, we have a standard edition Naturescape Employee.

As each task they learn becomes perfected, once again through training, classes and OTJ they begin the process of learning how they can beat the budgeted hours in the jobs they work. At this time, we have 3 guys dancing around the $30.00 per hour mark, and rates from that all the way down to the base model employee.

Some may read what I called "model" when refering to our employees and might just get their knickers in a twist. Get over it. We model our employees the way we need them to produce because that is what our clients demand and deserve. After they become the model employees we need to see, then comes the good stuff. The stuff every hard working American deserves and in all rights, should get. If a person does not have these apsirations, they will never adavance beyond the third tier starting pay level. Here goes.

This year, we will have two new home owners, one closes on thier 3 bedroom town home in a month. We will have 2 citizens of the United States of America, 4 more in adult reading classes, those same 4 introduced to the American banking system and how checks and credit cards work, to attain beyond ghost status in the credit reporting system so they too can own the American dream.
Every Monday, we hold a breif meeting before they pull out of the yard to address the pressing concerns of the day and goals for the week.

Job questions are answered as they need to be regarding C/O's, progress reporting, and client satisfaction.

Payroll is every 2 weeks and bonuses are doled out every 3 months.

It is not prefect, but it does essentially what we need. Employee retention, therby maximizing productive activity by reducing training and OJT. Benefits based on how far the employee wishes to take thermselves. Benefits beyond their wildest dreams back home. Overall helping our company stay focused on things that matter most, those being hand in hand, client loyalty, and profitability. Those two things go hand in hand. We fire clients who don't see it that way.

Anywho, time to go out and see the awesome views of south bay after the storm.

[Dale Wiley]

This is all a very important part of business, and being able to prosper in business.

Having a solid Human Resources Program with job classifications and descriptions with clear bench marks for advancement ( ie Pay increases), so that is understood by all employees as to what is required to advance in the company.

Mr Carver is being very modest in his descriptions, because he developed a great Human Resources Program for use in the COMPASS System. It contains the Learn to Earn program, progressive discipline program, job descriptions, and company handbooks.

A very clear map to guide you, your company and your employees through one aspect of the value conversion process. This type of structure is REQUIRED to be successful, because it eliminates the GRAY areas that cause trouble.

[johnkeegan]

The system Bill describes has some nice ideas in it. I think I'll steal some of them when I begin hiring immigrant labor. Unfortunately, at this point I still depend solely on a "homegrown" workforce. But I know that will have to change if I expect to grow any larger.
Having said that, I'll try to offer my insight into how to maintain a steady dependable "homegrown" workforce, since many others are in the same boat and I believe it's agreed that a system designed to deal with foreign born employess may not necessarily work with "natives." And either I've been very lucky or I've done something right because compared to most in this business I've had a history of long term employess. My planting foreman is going on his 13th year, my hardscaping foreman is on his 8th (previous guy was here for 10), "foreman apprentice" is going on his 3rd year and my two college summer guys put in four 4-month stints.
First off, hire for work ethic and attitude. You can train skills but no amount of incentives will turn a turtle into a hare. We all get fooled, but weed out the slackers quick.
Second, don't play games with compensation. If you try to pay a guy that's worth $15/hour only $10/hour because your looking for a "deal," don't be surprised if he disappears. Pay him what other comparative "skilled tradesman" are getting. And find a way to offer matching retirement and (individual) health insurance through a local trade group or payroll service. Even if they don't choose to participate, their proud to say they work at a place that offers them. And give them paid sick / holiday/ vacation days. I know Rick said don't mention the traditional incentives but I'm shocked to see how many contractors don't even offer these basics. Some owners say they can't afford them...but they can afford to be constantly rehiring and retraining and wasting the finite number of billable hours?
Thirdly, treat them with respect. Praise their good work. Give them small portfolios of photos of projects they've done to show off. If you meet their wife, kids, parents, friends etc. praise them openly (don't fake it, be sincere). And take an interest in them as a person (again, don't go overboard. Even a few minutes a day is fine.) It all has to do with respect. Show it and demand it.
Lastly, make sure you provide them with the proper equipment to make the job as bearable as is possible. Whether it's trucks, skidsteers, excavators, saws, hydroseeders, powered wheelbarrows etc. I tell them if they see the need for a piece of equipment to make things easier, tell me. I'll do what I can to justify it's purchase. (I know that statement will irritate some strict "cost analysis" guys, but I try to keep my eye on the "big picture" and I believe sometimes intangibles such as worker safety and happiness are left out of these cost/analysis because they're hard to quantify. Yet, what's more important than worker retention and, therefore, the bottom line.)
And, personally speaking, I've never tried to develop a structured bonus system. For me, there are too many variables on each project for me to confidently set up a bonus system. We're usually running 2-3 jobs at once and often I'll take guys off one job to help finish another... or the soil or weather conditions throw a wrench into things... or a laborer doesn't show up... or the customer is a PITA. And I know my employees. They won't remember the 9 bonuses they got...but they will hold a grudge for the one they didn't get because of a factor they thought was out of their control.
Also, my regular employees are by their nature hardworking and focused. I respect their work habits enough to trust they try to get the jobs done professionally and efficently. Of course, it helps that I've worked beside them for years, not always an option in a bigger company.
Many of these "employee relations" techniques I've used may more suited to a "homegrown" rather "foreign born" workforce. Or maybe they are just unique to my situation. But something must be working considering my retention rates, so I thought I thought I'd pass on what tidbits I could to give some hope for those of us still fishing in the "Born in the USA" employee labor pool.

[rbriggs]

Rick, this program sounds awesome. I wish we had something similar in our area.

[Rick Carver]

Rich

It is pretty neat,,,,, It is a GREAT source for small and medium size contractos. Not to mention that all of our friendhip base grew instantly!
Check with a University that has an AG. and or business program and ask if they would consider putting a mentoring program in place.

The program also has one of this areas biggest nursery owner on staff with us. WHAT A HUGE NETWORKING opportunity this is also.

Have the best weekend folks!
Rick