Here’s one more way you, your business, and your employees can benefit from the current remodeling recession:
The slowdown presents a great opportunity to get your employees’ compensation in line with their actual performance. And, if you plan to remodel your approach to business between now and recovery, the slowdown provides a timely opportunity to set a clear understanding of how employees can increase their compensation going forward, by taking on more responsibility along the way.
Re-Raise the Bar
In the recent past when work was plentiful, many remodelers overpaid new hires just to keep up with the workload. Besides overpaying, many also lowered their standards, hiring almost anyone who was available. What’s more, they often had to increasing wages for existing employees, to prevent them from going elsewhere.
Some of you probably felt hostage to certain employees. Knowing you needed to keep projects moving and would be in a compromised position if they left, they demanded more money. The old saying “You get what you pay for” didn’t necessarily hold true. I bet many remodelers and production managers felt like underpaid baby sitters for overpaid carpenters.
It was an employees’ market then, but not any more.
Now that it’s an employers’ market, remodelers are strongly situated to establish fair compensation strategies for existing and future employees. I am not suggesting dropping the wages of current staff just because many candidates are ready to take their jobs.
Rather, I am suggesting that you rethink your job descriptions and employee career paths, writing or rewriting them so they address your business’s current challenges as well as its future goals. Career paths should, in a linear fashion, describe how an employee can grow with and within the business. For example: how a new helper can progress his or her trade skills from floor sweeper to master carpenter, and from requiring direction from his or her superiors to managing entire projects as well as all of the resources assigned to a project, including other employees.
Pass Off Some Hats, and Explain the Benefits of Wearing Them
Another opportunity courtesy of the recession: If you want to move away from wearing all the hats in your business, pass some along to trained employees.
From my experience, the best way to do this is to help employees see their career path options and how their choices will affect their future compensation. When I owned my business, I remember encouraging one of my best carpenters to become a Certified Lead Carpenter. He said he preferred to stick with being a carpenter and stay out of project management.
I shared that it was only fair for me to inform him that he was already near his peak earning potential as a carpenter, and that he would probably get only cost-of-living increases going forward. On the other hand, his potential compensation could increase to $X if he were a lead carpenter who increased earned gross profit dollars by managing entire projects, subs, and other employees.
I also suggested the impact of his age; he was in his 50s, and how long would he be able to maintain a carpenter’s physical performance and therefore his compensation?
After further consideration, this employee embraced lead carpenter training, increased his compensation as he proved his abilities, and is still a valuable and productive member of the business. For the most part, he keeps cabinet and trim installation for himself while managing others who complete the much more physical tasks at the jobsite. This was a win-win
Pinpointing the Right Price
So, how to find the right number? I suggest you determine field employees’ compensation by considering their physical performance, their competence to complete the tasks assigned, and the responsibility and leadership they demonstrate. If you think of the first two items as points along the both as points along X and Y axes, the intersecting point of measure for both should indicate a fair compensation relative to their value to the company.
In the long run, even a decent carpenter – one who just needs more experience to improve his trade skills and speed – can earn more than a master carpenter if he manages the major aspects of a kitchen renovation.
Most employees and business owners don’t look at compensation in this way.
If your employees don’t want to buy into the career path strategy, or you feel they’re just not the right fit for your company anymore, not to worry.
One remodeler recently shared with me that he posted a help wanted ad for a lead carpenter at 12 noon and had 25 resumes by 5 p.m. Within a week, he had more than 200. He said it was interesting to note that almost every applicant claimed experience bringing jobs in on time and on budget, but only two said they were Certified Lead Carpenters.
Good employees are out there. Establish sound criteria to filter through the list. And before you hire, use your career path and compensation strategy as additional qualifiers.
Shawn McCadden founded, operated, and sold a successful design/build remodeling business. A co-founder of the Residential Design/Build Institute and former director of education for a national K&B remodeling franchise, he frequently speaks at industry events and consults with remodeling companies. email@example.com