Is it 1993?
Steven Cesare, Ph.D.
A business owner from Florida called me the other day to talk about what else? Staffing, of course. The reduced labor supply, fulsome unemployment benefits from state and federal agencies, and an unmotivated workforce have severely hindered landscapers’ ability to achieve full staffing levels for quite some time. This year, it seems to be even worse. While strategic staffing techniques are beyond the scope of this blog posting, my conversation with the Florida business owner produced several initiatives he has adopted that I felt were noteworthy to share.
First, without fail, every company tells me they have an Employee Referral Program. Without fail, in the same breath, the companies always tell me they are not receiving enough applications. My standard response: “This is not a hard one to figure out, Adam Smith. You are not offering enough incentive to your employees to motivate them to achieve your company’s recruiting goals.” The results dictate the cure.
It’s not 1993 anymore! Offering $200 for a new Foreman recruit will not get any action from any employee referral program. As of this posting, the average employee referral rate to bring in a new Foreman is between $800-$850.
The Florida business owner, who was down 15% against his desired staffing levels to complete all assigned work, has offered $1,000 to any current employee who brings in a new Foreman. The payment schedule is $200 on Day 1, $250 on Day 90, and the balance of $550 if the new Foreman lasts the entire season.
Next, in addition to that Employee Referral Program, the Florida business owner is offering a $1,000 bonus to each new Foreman who joins the team. This payment is made to the new employee, not the employee making the referral. The payment schedule for this signing/retention bonus to the new employee aligns identically with that for the Employee Referral Program.
Finally, the Florida business owner is offering his employees a hierarchical bonus for each new headcount brought into the company. For example, as stated above, if a current employee brings in a new Foreman, that employee will receive $1,000. If that same employee brings in a second Foreman, that employee will receive $1,250. If that same employee brings in a third Foreman, that employee will receive $1,500, and so on. For Laborers, the payment hierarchy is $600 for the first new hire, $800 for the second, $1,000 for the third, and so on.
Naturally, the savvy business owner has adjusted his company’s estimating system, production rates, gross margin goals, and contract proposal minimums to accommodate these extra staffing burden expenses. As he explained to me, his company is losing more money by not getting assigned more work than the amount of money he has budgeted to meet necessary staffing levels. Like any savvy business owner, he’s done the math.
He knows “it’s not 1993 anymore.”
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