Thinking about performance pay but don't know where to start?
I run into a lot of owners who want to set up performance pay and don't know where to start. My answer is always the same: figure out your labor cost first, then build everything down from that number. Labor cost is your tech wages divided by revenue. For HVAC and plumbing, around 20% is healthy, for landscaping and window washing, anywhere from 30-35% is healthy. Find the weekly revenue each tech needs to hit that number. Example tech at $35/hour: $35 x 40 hours = $1,400 weekly wage $1,400 / 0.20 = $7,000 weekly revenue target Under $7,000, he gets his hourly. Over $7,000, he earns a bonus on every extra dollar. Keep that bonus rate at 20% or less and the bonus never pushes your labor cost past 20%. His production goes up, he takes home more, and as long as your bonus rate is under 20%, his labor cost percentage goes down. Once you know your number, you can layer in tiers and spiffs without guessing. Do you know your labor cost percentage off the top of your head? And if you're already paying performance pay, what does your structure look like?Would you use TikTok to find your next hire? đź‘€
Social media might not be the first place you look for another crew member, but 60% of Gen Z is considering the trades—and they’re already online. Has social media ever brought you a job candidate? Would you try TikTok or Reels to find your next hire? In this Masters of Home Service episode, Rich Camacho (BlueRecruit​), Haley Rogers, and Jacob Palmer get into how TikTok is becoming a recruiting tool for the trades, what kind of content attracts potential Gen Z hires, and how training, feedback, and growth opportunities give younger employees a reason to stay. Never miss an episode of Masters of Home Service. Subscribe on Apple, Spotify, or wherever you get your podcasts.
New Hiring Strategy for Skilled Trade Jobs - The Test Job
I've been implementing something that's been pretty successful so I wanted to share with the group. In my business, people need to come in and already have at least one thing they are very skilled at. As most of you know, a lot of construction people have lots of confidence and it's hard to find people that can be objectively honest about their skill level in any given trade. I mean, probably most of us are like that for the things we think we're good at. I've definitely adopted the hire slow, fire fast mindset but I got so sick of training people on all the systems just to have them not work out after a week. So I started doing "test jobs" - and it's been working really well. What are the rules? Well first you have to plan it out. It needs to be a 2 person job, that's in their wheelhouse that they claim to be in, and you pay cash for the day. I usually tell them it will be 1-2 shifts like this. I don't require them to do anything in jobber, I don't onboard them normally and I always pay at the end of the day. What am I looking for? Everyone is going to put on their best face but I look for these things as the dealbreakers. Did they show up early - if they "caught traffic" on their first day they aren't a planner and it will happen again Did they ask questions - are they going to be a robot or are they going to think about what they are doing Did they stay on task How receptive were they to receiving direction - this is a big one. Not that we need to boss them around or always be right but our manager is in his early 30s so sometimes older guys can not want to hear from them or they just don't like being told what to do in general. Did what they said they are good at line up with what actually happened Now some people still slip through and make it a couple weeks only to be let go again BUT this will help alleviate some heart ache. I will say I am in California - you are not supposed to do this technically BUT we small business owners and you have to do what you have to do sometimes. I'd say most people actually prefer this to having to do all the onboarding paperwork only for it to not work out so it's not something you'd have to sell someone on.
If you have to give up more than you want, are they the right person to hire?
I have a guy that I worked with in the past that I always told, when I start my own company I want him to work for me. He was smart, articulate, hard working and a quick learner. Now that my company is a reality, I reached out and he wants way more than I am willing to pay, and he is making it really hard to convince him to come over. I always thought he would be a great addition to my team and I always had a position in mind for him, something he could grow into. Where he is now is a dead end but with me, the sky is the limit. I wonder, is he the same person I knew when I was managing a team for another company? Should I be offering him more? Are his requests unreasonable or are my offerings unreasonable? Is he even the right person if he is going to ask for more than he knows I am willing to offer.What kind of employee bonuses are you offering your team?
I recently listened to this Masters of Home Service episode with Cory Byron (WiringByron​). It got me thinking, how are you all handling employee bonuses? Has your current approach improved team performance, or have you faced challenges? Share your experience below! Give the episode a listen if you want to learn about: Building a simple bonus system that's easy to manage Common issues a bonus plan can address How regular communication keeps your team motivated Never miss an episode of Masters of Home Service. Subscribe on Apple, Spotify, or wherever you get your podcasts.
