Thought i would throw this out to those of you who have employee’s as well as the cost of operations. As alot of you know i recently went to an hourly pay scale as of Sept. 07 to hopefully help with the enormous cost of employee’s coupled with the ever growing cost of doing business ie: operation costs.As i’ve played the commission/piece game long enough!
I guess my main question is what are some of you doing to help cut expenses associated with both scenarios?
I will say im doing much better since going with a hourly pay but…on the leaner days i find it to be not much difference in over-all costs although i am weeding out the less desirable clients and bidding gigs alittle better to help compensate that.
Another thing im doing is i will be shopping my work comp this year to see if better rates are possible for me,as of right now i am inquiring through State fund (work comp ins) for my loss runs from there i will start shopping.
Also…im seriously looking to switch to a different payroll service to hopefully shave some expense as well.
Outside of that are any of you cutting hours with slower times and or cutting back on expenses that are not totally necessary?
You know Im gonna chime in on this one. Im strickly commission right now. 30% across the board. I know that we have spoke on the phone about this but the hourly thing drives me crazy on the slow days. The guys used to lolly gag around in the morning and throughout the day to get their hours in. It drove me crazy. I know that our situations are different so I wont go on. Do you still have your senior employee still working for you? Hows he taking the hourly thing?
No hourly for us. Too many people just milking the clock. Percentage makes the guys take that extra job at the end of the day, make the window count extremely accurate, cuts back on call backs and I think it motivates employees to hustle and do a stellar job every time. Best of ALL, the company knows what it brings in as soon as the bill is written. The only time the guys aren’t making bank is when they are doing commercial store front work. We have almost all of our guys fully trained in residential and commercial. This way everyone has 1 or 2 days of commercial so the pay field is leveled. This is the first year the company is paying this way, we like it and so do the guys and girls.
Thanks for the input guys! As for Steve’s question …he’s dealing with it of course i still hear some static but…like i told him nothing personal ALL business!
I can totally relate to the commission game,wish i could still be playing it sometimes as that would be the hot ticket on the leaner days but…just not doable for me because…my main guys was use to getting 37% alone nevermind a helper or 2nd guy.
You see out here to keep a good cleaner there is NO way a low commission would work.I believe in part its due to the cost of living (here in cali) but nevertheless,i save big time on labor with hourly on decent days. At least the difference i would be paying out on commission is handling the cost associated with that employee matching taxes,work comp etc.
I believe call backs can happen with both scenario’s hourly or commission because if there hauling (commission mentality) there more prone to make mistakes (especially on slammed days) the only downfall with hourly is you have to pay them to go back to fix whereas…commission it wouldn’t cost you to send them back but…then there’s the gas & wear & tear on the vehicle.
See where your coming from Craig. Its hard to keep everyone happy and be fair all the time. And I believe we are in the same boat with the high cost of living. Here in New Jersey I know the cost of living is the highest in the country or very close to it. If a couple of our guys have a real bad week we try to throw them a little extra money just to show we care and we want them to stick around.
Yeah…no doubt! Its really a catch 22 i try myself to help ease the burden but…i can only do so much. I’ve been at this long enough to see how things can “unfold” with both scenario’s(HOURLY VS COMMISSION) of course…i was using the worst case to make my example.
Thats why i threw out what i did to get a feel for how some of you deal with it?
I know from experience good employee’s pay they dont cost but…lets face it the bottom line is “Profit” when thats affected greatly we start to really examine things a bit closer as with what i’ve been doing.
I talked to a guy at the convention last year about how he pays. He has multiple crews and pays his crew leaders a percentage (40%). The helpers get an hourly wage that is taken out of the crew leaders percentage. It seems to make sense because the crew leaders keep the hourly guys hustling. Also the more the crew leaders up-sell services the more they make. The crew leaders are responsible for all call backs too. So if there is a call back they are losing money. Even more incentive to keep the hourly guys on track. He did tell me that his system only really works if you have multiple crews.
I myself pay hourly now because I am there to start and finish almost all jobs and I only have 1 full time employee year round. And hire seasonal help as needed. Sure the leaner days I don’t make out as well but I make a killing on the big days.
Hey Craig, I thought you were using some service for employees. Workman’s Comp and the payroll is not included? What is included?
Yeah bro…im using a payroll service,its great as far as less headaches associated with the over-all payroll headache but…its 34.73% on top of what my guys make!! Thats the kicker;) I too am much happier now with the hourly set-up but…as both you & i stated the leaner days SUCK!!
Its all good when the milk & honey’s flowin on the fat days but im just shopping around to see if there is possible a little better of a deal,especially on the work comp!
I think that different scenarios work in different parts of the country. You cant argue with that. I agree with your post Alex on commission. I know what Im briging in at the end of the day. Guys will ask for more work which cleans up the schedule in our busiest periods. Im showing more profit now than when I was on an hourly system. The only drawback in my opionion is keeping track of commission and the employees submitting their invoices. You have to be really on the ball Its win win in my situation.
Im in my third year of commission based pay. I have a ton less troubles compared to the hourly pay scale. I have ran a commission (lead man) along with a hourly employee (college student with a little experience). I cut the lead mans % back to absorb some of the pay for the hourly guy. No go—. Milking the clock scenario all over again. Payroll coming in around 38 to 41 %. Hourly has always sucked bigtime for me. Commission paid employee seems to slow down with a helper. Taking longer lunches, hanging out at the shop in the morning and at the end of the day. It eats my company’s bottom line. Im officially done with college help too. Our Fall season is twice as busy as the Spring. I need an employee to stick around at least 10 months of the year.
I do things a little differently than most, I guess. I don’t use strictly commission or strictly hourly. I use both. I pay my full-time, and now my part timer, $X/hour + a commission of 10% each. It keeps that slow days from being to rough and makes the nicer days seem easy.
There are rules though to making the commission. If a guy is late for work, leaves early, doesn’t finish his route (of course there are emergency scenarios that don’t play into effect here) then he does NOT get commission for that day. If I go back and see that there is a issue, he won’t get it. If there is a call-back, he looses it, and finally, if he quits mid-pay period, he won’t get it. Infact, he gets paid minimum wage for his last payperiod if he quits without notice.
They work well together and keep each other going throughout the day. They do however work a little slower when I am not there, but who hasn’t seen this.
I have a few other part-timers that get paid hourly, but they work so sporadically that its just easier on me.
I dont see the advantages to running hourly with commission really. If your guy has a $500.00 day and you are paying this guy $15.00 per hour, what incentive is it for him to get through the job efficiently? He already knows that he’s banking 10% already. Why bust his chops to get it done any quicker? It would be more money for him to "milk it out " if he can get away with it. Can you elaborate a little bit more on this? Thanks.
ive worked for 3 different window companies out here and all i can tell you is i hate hourly pay.
it just seems to slow me down. wenever i show up to the job and the boss is there i know im gonna have to slow it down a little bit.
and i told him too why would i wanna hustle and work 5 hours wen i can slow down and work 8 hours.
wenever i get paid on % it means im doin the job bymyself or with another guy.
wut ****es me off the most is wen the boss shows up to do a few windows and sais he has to go just so he dont have to pay out a %. im not an idiot i know exactly wut hes doin.
I continue to use the hourly method for my crew members and am happy with it. My crew leaders are salaried. I save a ton of money during the slower season by filling up 4 full days rather than 5 mostly full days. My hourly employees do tend to lag a little when the days are short to milk the time. They understand that there are slower season and that there may be days that they don’t clean. As long as you tell them when you hire them and put this in their handbook, you should be okay. This is just another backdoor way in saving money. I usually don’t tell them when we have a short week until a day or two before. This also helps them from milking the hours the four days before.
If there are touch up jobs to be made or re-do’s I just get my salaried guys to do the job. This works wonders for me. One, they try to get done quicker and two is they are focus on the quality so they won’t have to go back. If they do have to go back I don’t have to spit anymore hours out.
It works well for me since the crew leaders are motivated to work quicker and are keeping an eye on the members as well so that they can go home earlier.
This has saved me plenty of money. I’m thinking adding a real small commission for the leaders in the future just to motivate them to reduce time. They would get a percentage of the time save that the hourly workers didn’t work.