Irrigation Technician Compensation Plan
Steven Cesare, Ph.D.
A capitalistic business owner from Colorado called me the other day to talk about the compensation plan he has designed and implemented for his Irrigation Technicians. During hundreds of discussions with business owners over the years, I have consistently opined that their Irrigation Departments are generically underperforming across multiple metrics including revenue per employee, billable rate, gross margin, and job quality. Make no mistake, irrigation services are a well-known, yet untapped source of much-needed revenue, especially in this problematic economy.
I have long-maintained that Irrigation Technicians should be treated with conceptual similarity to 1099 workers, in that both entities are granted near complete autonomy, with uniquely-identifiable cost factors, and specifically-defined performance accountabilities. I forthrightly believe, business owners should expect more from both parties, most notably their Irrigation Technicians.
Seriously, have you ever really seen “stress” on an Irrigation Technician’s face?
In general, the “average” Irrigation Technician is paid an hourly wage rate between $24 – $28, with a basic monthly revenue expectation between $20,000 – $23,000, accompanied by a real monthly gross margin of 55%, completing an average of approximately 5 work orders per day, underscored by an hourly billable rate between $95 – $115. By the way, very few Irrigation Technicians possess a professional certification. Do you think their business owners know there are Irrigation Technician Certification Programs?
Do us both a favor and please remind them that Irrigation Technician Certification Programs exist, okay?
Back to Colorado. Three years ago, the transformational owner changed his Irrigation Department mindset, from being in the Irrigation Business to being in the Customer Acquisition Business; instead of viewing irrigation as being illustrative of mere technical proficiency, he reframed it as an entrepreneurial gateway.
In specific, he gave his Irrigation Technicians a choice between two disparate compensation plans: A wage rate of $24.00/hour or no base pay coupled with a 30% incentive on all completed work revenue. Naturally, some of the Irrigation Technicians were reluctant to participate in the latter option. Others did not waste a moment and have not looked back since.
Since that initial trepidation, all the Irrigation Technicians are now participating in the Incentive Plan.
On average, the Irrigation Technicians now make approximately $30/hour, are completing at least $30,000 in monthly revenue at a gross margin rate between 55% – 60%, servicing 6 customer work orders per day, with the discretion to work on Saturdays. The Irrigation Technicians complete work that is sold by Sales and/or Operations employees as well as work they sell on their own. They are paid $200 per day for all Company-sponsored holidays, within the 8-month Irrigation Season. For the past Irrigation Season, the Irrigation Technicians made more than $80,000, with four months off due to seasonal unemployment.
The business owner has crafted each Irrigation Technician’s service territory by Zip Code and supplied them with a standard pricing structure: $150 fee to visit and assess a job site start-up with up to 8 irrigation zones, $130 per service call excluding adjoining parts and labor that are listed on the company web site (e.g., $45 to replace 4″ pop-up spray head and nozzle, $200 to replace Apollo back flow parts 3/4″, $495 for an 8-station control clock with installation). Moreover, per his commitment to the Customer Acquisition Business mindset, the business owner plans to continue to raise his service rates until customer acquisition growth slows, rather than being based on what he originally thought were acceptable prices.
Oh, I almost forgot to tell you: For 2023, year-over-year monthly irrigation revenue has grown from $160,000 to over $210,000, with fewer Irrigation Technicians on staff.
I sincerely applaud the capitalistic nature of this sage industry leader who has successfully accessed the heretofore untapped source of irrigation revenue that still inexplicably perplexes other business owners.
His Irrigation Technicians’ faces don’t have stress on them; they are too busy smiling.
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