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Have The Right Compensation Strategy For Carpenters Before You Hire!

Posted by Shawn McCadden on Thu, May 30,2013 @ 06:00 AM

Have The Right Compensation Strategy For New Carpenters Before You Hire Them!

Pay rate for a carpenter

 

One of the benefits of the great recession was that as business slowed down businesses got rid of underperforming and or overpaid employees.  This article is intended to help those remodelers who had or may still have such employees.   I hope by reading this information they can avoid repeating the same mistakes again as the economy eventually improves.

 

During the boom times many contractors, trying to get enough field labor to keep up with volume demands, resorted to overpaying carpenters and other field workers just to get them on board.  Also, over time, many remodelers gave wage increases to these people just to keep them, either in fear of losing them and or because another business offered the employee more money.  Additionally, many employees received wage increases based on longevity, perhaps with little or no consideration for any actual advancement in performance, responsibility or productivity.  One could fault the business and or the economy for why this was happening, but certainly not the employees.  After all, if market demand stimulated increased wages, employees would be foolish not to pursue and take the increases.

Then the bottom fell out

pay rate for carpentersThe great recession changed this scenario somewhat due to layoffs and downsizing.  The surplus of unemployed field workers got as high as 27% for the construction industry during the recession.  Unfortunately many skilled workers left the industry for other jobs, less physical jobs and or better job security.   This has set up what is expected to be a major labor shortage problem for our industry as the economy and construction pick up again.  Many contractors around the country are already reporting challenges finding skilled carpenters to keep up with construction demand.  As the demand goes up, so will the wages that carpenters can demand to either stay at their current jobs or that other contractors will use to lure workers away to work for them.

 

Finding, attracting and keeping the best carpenters will require strategic thinking

Finding good carpentersIf you plan to hire additional carpenters as your business volume picks up now is the time to put a plan together for not only finding, but also attracting good carpenters to work for your business and then to get them to stay with your business.  The compensation package you put together should not only capture their interest, but also help them see opportunities for future growth and increased compensation if they are loyal and motivated.

This provides a great opportunity for remodeling business owners to get compensation and any future wage increases in line with actual performance, rather than continue using the subjective reasons so prevalent the past.  It should only make sense for a business to put a plan in place that properly compensates employees based on the value they bring to the business.  It also makes sense to put such a plan in place so employees will know how they can and when they have earned the right to expect increased compensation.

 

Buying a boat or getting married is not a good reason to give a carpenter a raise!

pay rate for a carpenterThe automobile industry uses a flat rate manual to determine the labor costs for auto repair services.  The strategy they use is not to estimate the number of hours to do a certain task, but rather the typical actual cost of the labor to perform the task.  A repair shop that uses flat rates pays their employees for what they accomplish, not how long it took them to do it.  A construction or remodeling business could do something similar.  Such a strategy could also help the business and the employees learn where to invest training to improve performance and stimulate wage increases for those who buy into performance based opportunities.

If remodelers and other contractors continue to use purely subjective methods to determine compensation for field employees, they will be setting the example for and encouraging employees to also continue using subjective methods to assess their own performance.  If this plagued your business in the past it’s up to you to make sure it doesn’t happen again. 

Summary

Before you hire new employees or bring previous employees back into your business take the time to think out and document compensation plans based on merit.    If you introduce such a plan to job candidates it could even act as a filter.  Top performing candidates will be attracted to such a plan, but those who can’t or won’t perform will likely find somewhere else to work.  After all, as a business owner your compensation is based on actual performance.  Why not offer the same opportunity to employees.  If they make more money participating in such a plan, so will you!


Compensation plan for a carpenter


Related articles:

Successfully Grow Your Business By Creating A Ladder Of Opportunity For Employees

How To Make The Ladder Of Opportunity Happen At Your Construction Business

Simple Profit Sharing Plan For Contractors

 

Topics: New Business Realities, Hiring and Firing, Worker Training, Careers in Construction, Team Building, Employee Advancement, Business Growth, Sage Advice

How To Make The Ladder Of Opportunity Happen At Your Business

Posted by Shawn McCadden on Thu, Apr 11,2013 @ 06:00 AM

How To Make The Ladder Of Opportunity Happen At Your Construction Business

Note: This is the last article of a 3 article series on this topic (Click for article #1 or for article #2)

Turnkey business model for contractors 

Let’s use the example of creating a “Turnkey Business”

If you want a turnkey operation, which is one that runs without the need of the owner’s participation, the employees need to be self-motivated rather than motivated by the owner, their manager or short term measured motivation programs. Even if turnkey is not part of your vision, a single owner can’t wear all the hats of a continuously growing company. Vacations, health, and emergencies will at some point require the owner to delegate responsibilities to key employees.

 

Learn the “whys”

Employee motivationsThe best way to find out what will motivate team members is to ask them. While interviewing recruits or existing employees, find out not only what motivates them to grow, but also why. Connecting the “why” to the “what” can help get you, your business and that employee to where everyone wants to be much faster for two reasons.

  1. The first is the simple fact that adults choose to commit and follow through on their goals for their own, sometime selfish, reasons.
  2. Second, if the business, the marketplace or life changes at some point, knowing the why can help us find alternate ways to accomplish the long term company vision while still maintaining motivation.

 

Managing employee growth requires scheduled reviews

To help facilitate success support employee career advancement planning and implementation with a structured employee review process.  Be sure your review process identifies where the employee is today, where he or she is headed, and where you both expect them to be along their career path by the next scheduled review meeting. 

 

Generating a vision for where they will be is not enough

Career paths in construction

 

Work with the employee to identify the plan required to get there.  Include what the employee needs to do, as well as the company’s commitment and the necessary steps to help make it happen. 

Implementing a ladder of opportunity may require that the employee train and mentor his or her replacement.  Be sure the company provides "training of the trainer” early in each employee’s career path.  Education then becomes part of the company culture and facilitates constant growth among workers. 

 

Write down and maintain records of the employee review process.

Cosntruction employee performance reviewInclude in your record keeping not only the reviewer’s comments, but employee’s feedback about how well the company helps him or her to get there.  If your process includes writing down what has been agreed to at this review, both the company and the employee will know what to do between now and the next review.  You will also both know what you will be discussing at the next review.  This helps minimize the typical fears experienced by both the reviewer and the employee when anticipating the next review meeting and what they should talk about during the next review. 

If the review process is well thought out, properly documented and followed throughout each employee’s career, you have created a ladder of opportunity!

 

Related articles:

Article #1 of this series: Successfully Grow Your Business By Creating a Ladder of Opportunity For Employees

Article #2 of this series: How To Create A Ladder Of Opportunity For Your Employees

Government to Contractors: Start Hiring Convicted Felons!

Mentor Me, Please - Gen Y Business Owner Offers Peers Advise

Contractors: How To Work With Generation Y From One Of Them

Gen Y Member's Advice To Peers: How To Develop A Good Work Ethic

 

Topics: Hiring and Firing, Success Strategies, Worker Training, Careers in Construction, Recruting, Team Building, Employee Advancement, Business Growth

How To Create A Ladder Of Opportunity For Your Employees

Posted by Shawn McCadden on Sun, Apr 07,2013 @ 06:00 AM

How To Create A Ladder Of Opportunity For Your Employees

Note: This is the second article of a 3 article series on this topic (Click for article #1)

Look ahead to where you want to be

Ladder of Opportunity

 

Creating a ladder of opportunity requires that you create a vision for where you want your business to go and how you will make it happen.  It also requires that you sell the vision to existing and recruited employees. Help them see the vision and growth plans of the company so they can see where they have opportunities to fit in and contribute to the growth as well as, at the same time, accomplish their own personal goals.

The Ladder of Opportunity strategy requires that you develop a career planning strategy based on a deliberate balance between how the company needs to grow and how employees envision their roles. For example, a designer who possesses previous field and production management experience will likely generate designs that are easier, more efficient and cost effective to build. Projects designed using such experience are also more likely to be consistently profitable.

 

Hiring the right employeesGrow or get out of the way

If qualified employees do not see themselves as part of the evolution, you must either decide to keep them in their current roles, if possible, and/or realize that you will eventually need to hire someone else to fill future positions as the business grows. Be sure to seek out and retain the right people on your bus and take the wrong people off of the bus. Tolerating poor performance from some employees may give the wrong message to the more motivated workers.  

For smart employees, climbing the ladder of opportunity in a growing business means that someone else may be on that ladder rising right behind them.  Aspiring and high performance employees may become frustrated and lose motivation if they are held back in their career paths due any inability to climb the ladder of opportunity.  This being the case be watchful for the employee who tries to sabotage or hold other employees back as a way to maintain their status.

 

Managing career paths

Establishing employee career paths that benefit the business requires that you create a plan to Design/Build both the business and its employees. Decide where you want to take your business, what employee skills are needed to get there and how you will incorporate those abilities into your team’s existing pool of strengths.

Employee carreer pathsTo help manage the process of building employee skills, avoid mutual mystification. Clearly detail your vision and sell the goals involved to your team members.  Ask for a commitment for this required growth, both personal and professional, from each team member. Ask them how they see themselves fitting into this vision. Employees can choose to grow with the company, or, to be fair, perhaps they should be told that the company will out-grow them.

 

Be proactive with job descriptions

As an added caution, be careful not to develop job descriptions based on who you already have on the team. This would be like Design/Building a project for a client by only using the left over and miss-ordered materials that are collecting dust in your warehouse. How could you fulfill the purpose of the client’s project if you limit the design in such a way? Instead, Design/Build your business by creating job descriptions specific to your company’s vision and the path required to achieve it. 

Construction company job descriptionsIf you are the business owner, create job descriptions for employees who will complement the skills you bring to the business.  This helps you to concentrate on what you are best at and/or prefer to do yourself.  If you plan to eventually give up certain responsibilities, keep an eye out for your replacement and include mentoring as part of that person’s career path.  Mentoring helps socialize the employee into the nuances of the already established norms and values of both the job position and the company.

Watch for the follow up to this blog (article 3 of 3) which will be titled "How To Make The Ladder Of Opportunity Happen"

 

Related articles:

Article #1 of this series: Successfully Grow Your Business By Creating a Ladder of Opportunity For Employees

Article #3 of this series: How To Make The Ladder Of Opportunity Happen At Your Construction Business

Government to Contractors: Start Hiring Convicted Felons!

Mentor Me, Please - Gen Y Business Owner Offers Peers Advise

Contractors: How To Work With Generation Y From One Of Them

Gen Y Member's Advice To Peers: How To Develop A Good Work Ethic

 

Topics: Success Strategies, Worker Training, Careers in Construction, Recruting, Team Building, Employee Advancement, Business Growth, Culture, Leadership

Mentor Me, Please - Gen Y Busines Owner Offers Peers Advise

Posted by Shawn McCadden on Thu, Mar 21,2013 @ 06:00 AM

Justin Jones

 

Guest Blogger: Justin Jones is a licensed General Contractor, Roofing Contractor, and Plumbing Contractor based out of Palm Harbor, FL. Justin is also a writer and speaker on topics including Contractor Sales, Marketing, and Leadership. At 32 years old, he is a member of Generation Y.

 

Mentor Me, Please - Gen Y Business Owner Offers Peers Advise on How to Learn From Craftsmen

Dealing with older tradesman can be tricky at times. In my own business, I've been dealing with this interesting arrangement for the past seven years. Through the ups and downs, I have managed to form some great relationships with older tradesman.

At first, I expected them to complete tasks with incredible haste, but ultimately, I realized that there was no harm in taking things a bit slower. I set out to establish a mentor-mentee relationship with these older, more experienced tradesmen.

 

Start With Respect

Respecting older craftsmenRespect. From those first meetings with prospective employees, I've always been careful to offer the utmost respect, particularly when it came to older craftsmen. I respected them based on their many years of experience.  I took the time to listen to stories about the good ole' days and how things were done differently.  I'd smile and nod my head as I listened. Many of the stories were well-told and well-crafted, providing me with wonderful insights and lessons. I never questioned the knowledge of my senior tradesmen.  And if questions ever did arise, I was always careful to ask in a tactful manner.

Communication.  As I'm in the process of hiring a new individual, I always inquire about their communication preferences. For years, most individuals would indicate their preference for phone calls. But more recently, individuals have expressed a preference for emails and texts. Quick and concise “yes” and “no” communications amongst my team members have served to maintain an open dialogue platform. These open lines of communications have made my employees feel comfortable to call at any time if they need direction or they're second-guessing a decision. I feel this is an extremely important part of our business.

Questions. From job to job, I take the time to lend a helping hand, whether it's loading materials or inspecting trade tools. These interactions provide a perfect opportunity for asking questions. Many tools had the appearance of museum artifacts, but every once in a while, I got a chance to see these relic tools in action; my skepticism was squashed after viewing their quick time-saving functions. I got to return the favor as the building codes have changed several times over the past four years. I'd receive calls from tradesmen, who were wondering if there had been a code change. Sharing back my knowledge has proved to be a great opportunity to build rapport and return the favor.

Gen Y Bussines OwnerBuilding Rapport. Last week, I approached my team – consisting of several individuals in their late 40s and 50s. I had the opportunity to get their feedback on what they enjoyed most about working on my team.  Their answers were all based around rapport. They liked the fact I support their decisions and they were grateful for my willingness to step in and help without being asked. As the leader, I've always been quick to step in and get the project back on track if issues arise. In addition, I've learned that communication with these team members must be clear, concise and written. Accommodating them in this way has led to much better productivity and the strong rapport makes for a healthier work environment.

 

Learn to be humble

I turn 32 this year and I'm willing to admit to my team that I don’t know everything and on occasion, I need help. Many individuals in my generation believe they know everything, but Google won’t teach you how to work as team, nor will it teach you how to maintain your focus on accomplishing a goal.

Respect for older craftsmen

We work as a team as we complete tasks and gather referrals.  This team approach has created a wonderful synergy between me and my team members. We have built a relationship based upon trust and open communication.

My advice, what do you think?

Approach older tradesman and offer them the respect they deserve. Be willing to learn from these more experienced individuals. Adopt a mentor-mentee relationship and you may be surprised by how much you can learn from these older tradesmen.  Anything you would like to add?

 


Topics: New Business Realities, Recruting, Team Building, Guest Blogs, Opinions from Contractors, Generation Y, Culture