I recently interviewed an energy auditor who worked for a competitor and is doing energy audits on his own now for several different companies. He told me he got his experience at this competitors company and then got good at doing audits and retrofits to the point where he became pretty self sufficient and required little to no oversight. The owner probably thought they could do what every owner's unrealistic fantasy in business i..., and that is to put him on autopilot. Unfortunately the "set it and forget it" model doesn't work so well with managing people and you can guess this auditors next thoughts were, "boy, if I'm doing all the work, I can just do it for myself and get all the money for myself." That's just what he did and saved enough to buy a blower door and cheap IR camera (see blog about cheap IR cameras) and went into business for himself. By the way, he was smart and did not burn any bridges and still does audits for his previous employer.
His story resonated with him because I have been on both sides of his story and know so many home performance contractors who have also. Human resources is one of the core problems we have in business growth as small construction companies in home performance with tight margins and high installation standards. Employee hiring and retention are where I've learned to devote much more of my time more by trial and error than prudence. Unfortunately, as small business owners we can't offer free daycare, afternoon massages, free meals 4 times a day with Frisbee golf parks to play during spare time, but there are perks that will keep employees engaged and around for long term.
- Using ADP (or a payroll processor or DIY is better) to turn 1099 contractor employees into W-2 employees. It will cost you about 6% of their check additional in social security, unemployment and tax fees but there is a mental change and an increase in loyalty that happens when someone becomes an employee rather than an independent contractor that is beneficial for employee retention.
- Bonuses given out per job, per week or per month for meeting or exceeding company metrics, or key performance metrics. For a crew, it might be finishing jobs on time, customer satisfaction, clean up, referrals and/or quality inspection. Trial and error will tell you if your metrics are unrealistic, too complicated, too much or too little. Bonuses can be paid out on each check or withheld until the New Year to keep employees and forgone if the employee quits prior to their bonus check.
- Medical insurance is a bigger for some employees who need medicine or have kids and families. It took me a long time to even find one because I was looking in the wrong places. If you Google, "medical insurance provider (or broker)" you can find some companies, who are usually brokers. Just calling Blue Cross will give you the run around for days.
- In-house training is also very important because it puts you in front of your staff to share your experiences, vision and get feedback from your staff. If you are spent time in the trenches, create training folders of different problems and topics you want to talk about at each training. Throw in audit pictures and gather evidence of how to do it wrong and how to do it right. Quiz your employees on different scenarios and have them answer what-if questions. What if a homeowner says this, what if you break the drywall, what do you do if the machine clogs, etc.
- Certifications and training are carrots that ambitious employees can't pass up. Even if your employee leaves your company, it is worth getting them trained and certified. I have a policy of paying for training only after a year or partial reimbursement if before.
- Company vans that employees can take home with GPS tracking systems installed.
- 401K company match but if you offer it one employee, you have to offer it to all employees.
- Dental and vision insurance is just a little more money out of your pocket.
- Sick time and paid time off.
- Paid holidays.
My last bit of advice is to do some number crunching before to see from your profits what perks you can afford doing, what you want to pay yourself and what you want to go to the business. Planning helps ensure your business outlasts your employees.