I sat in a seminar this morning titled "Going From Carpenter to Management," conducted by Les Cunningham, founder of Business Networks. Les' presentation was geared toward carpenters who aspire to become production managers, but he made an interesting point about how remodeling company owners treat their employees.
He said that there are two kinds of customers in remodeling: "external" and "internal" clients. External clients are the ones you traditionally think of when you think of your customers -- homeowners who contact your company to replace their windows, or remodel their bathroom, or put an addition on their house.
Internal clients are your employees. Just as you work hard to gain the trust of the people who invite you to do work on their homes, you must also earn the trust of the men and women who you rely on to get the job done -- and who rely on you for their paycheck.
How does this affect day-to-day operations at a remodeling company? Well, it's certainly not unusual for a remodeler to give a client something for "free" - waiving a change order, for example - particularly on a large project or a project for a loyal client.
You'd chalk that up to the cost of doing business, or the cost of retaining a strong referral. These are legitimate business decisions to make, but have you stopped to think about how this affects your employees?
If your carpenters and project managers receive bonuses based on the profitability of a job, giving the homeowner something for free can be a big deal. That "gift" cuts into your profit margin, and depending on your company structure, your employees' compensation.
With the labor shortage hanging over the industry, retaining employees is as important as ever. You wouldn't take money out of your clients' pockets, would you? You can't afford to lose good people because you don't treat them the same way you'd treat your clients.