One of the most difficult aspects of building a business is finding the right people. So when a slow marketplace threatens the need for layoffs, most savvy businesspeople fight it tooth and nail.
Craig Deimler, president of Deimler and Sons, in Harrisburg, Pa., agrees. “We've invested a great deal to find and train the people we have,” he says, “so we'll do whatever we can not to lose them. Weak markets don't last forever, so we will need these people when it turns around. Plus, replacing talented people takes tons of money and time.”
Their strategy: Hold on to the experienced people they have, provide them with as much work as they can, avoid all layoffs — and wait it out.
“During the last downturn, we had the same issue: not enough work to keep our field guys busy,” Deimler says, “so we used them to take care of all of the maintenance and remodeling needs around our office. ”
NEW APPROACH While using field staff for in-house work is a common strategy for remodeling company owners, it produces a one-two punch that can put a company in a dangerous situation. Says Deimler, “Not only were we producing less than we needed to cover our overhead, we were driving our overhead expenses up and up by using the guys for this type of work.”
When the Deimler management team saw the 2007 downturn approaching, they warned their field staff that they would be using a new strategy this time around.
All hourly employees would drop from their usual five 8-hour days (40 hours) to four 9-hour days (36 hours). “This was a drop in pay for everyone, but it still provided them with more money than the unemployment insurance that they would get if they were laid off,” Deimler says. “With everyone taking a cut of just 4 hours per week each, we could keep everyone working.”
Hourly office employees had their hours cut the same way, while the salaried office staff picked up the slack.
In the field, all employee hours were reduced as described, and the team was split into two. One team did not work on Monday and the other didn't work on Friday. Everyone liked the three-day weekend, and jobs weren't affected much at all.
“In fact, there are several benefits to this schedule,” Deimler says, “First, we have scheduling flexibility. For example, when we saw it was going to rain on Monday, we moved the folks scheduled to work that day to a time later in the week. This way, we were still producing revenue for the company and didn't miss a beat.” Neither was customer service affected. “Because we use a two-team system, someone is always on the job,” he says. “The customers aren't aware that we're slow because their job is moving ahead each and every day.”
Most employees are already back to 40 hours as the leads start flowing in again. “We got through this by being creative, by everyone sacrificing something, and by realizing that our employees are too much of an asset to lose without a fight,” Deimler says.
—Victoria Downing is president of Remodelers Advantage, helping remodelers build consistently profitable companies. www.remodelersadvantage.com; 301.490.5620.