A few years ago, Lawn Dawg was analyzing why customer cancellations were slowly creeping up. The company had always taken pride in its exceptional client retention, says Jim Campanella, president of the Nashua, N.H.-based firm.
After taking a closer look at the numbers, Lawn Dawg determined that the old fluctuating overtime pay system was not encouraging quality customer service. (Employees earned a daily salary, whether or not they worked overtime.)
"It was encouraging technicians to go as fast as they could so they weren't working for a small wage on overtime hours," Campanella says.
So three years ago, the company adopted a standard hourly rate with time-and-a-half for overtime. Plus, Lawn Dawg added an incentive program with bonuses and wage increases based on factors unrelated to productivity. For example, if a technician earns landscape certification, showing a desire to be better educated in the industry, this person receives a bonus and a 10 percent hourly pay increase.
The results of this pay system are an improved customer cancellation rate and motivated employees. "They are getting rewarded, and if we need them to work a Saturday, it's not like pulling teeth to get them in," Campanella says.
As for raises, Lawn Dawg allots for up to a 5 percent raise per year for employees that meet key job responsibilities. Despite paying more for labor – Campanella says that his company probably falls in the "middle of the pack" in terms of what other green industry firms pay in his region – Lawn Dawg is more profitable, and so are its employees. "This pay system was an important piece of getting technicians more engaged with customers," Campanella says.
Punching the clock
What you pay your people is often the clearest – and can be the most contentious – way to reward them for their hard work. See the charts below for the average hourly wages and salaries for common industry positions nationwide and regionally.
Across the board, landscapers are looking for ways to keep crews inspired in tough times, when big pay raises aren't necessarily a possibility.
At Ameriscape Services in Naples, Fla., Joe Chiellini has eliminated holiday bonuses and instituted a goal-focused incentive program instead. The company wants to increase net revenues by 10 percent each year. If this is accomplished, employee bonuses reflect this percentage of the revenue. "We put the ball in their court and say, 'If we can earn this as a company, then everyone shares in it,' and that has been a huge success to date," says Chiellini, president of the firm.
Boosting Pay. John Newlin says he, "broke down and gave out raises last year." It was a nerve-wracking decision for the president of Quality Sprinkling Systems Services in Cleveland.
"There was a lot of rumbling – we haven't had pay raises for three years," he says.
Newlin never cut pay either, even in tough times. He reduced some employees' hours, which ultimately meant they were taking home a smaller paycheck, but for morale purposes he maintained the company's hourly wage. "I guess I'm the only one who took a pay cut," he says.
This year was time to give employees a motivational boost in the form of a 3 percent raise. "It worked out – our business picked up considerably this year," Newlin says of 2011 performance, and how the firm has increased its customer base by 10 percent in recent years. In fact, he hired another service technician to help with the company's expanding lawn healthcare division.
Newlin says revenues have been flat, but with more customers on the docket and further potential to grow, he's optimistic about the coming year. "Even though it was a wet year, we did very well, and I attribute a lot of that to the fact that a lot of other contractors have cut back so much that they let go of service technicians, office personnel or closed their doors," he says. In other words, companies that are still standing strong can eat up some of the business left by failing firms.
Also, talented people are looking for jobs. Mickey Strauss, president, MSM Landscape Services, Sylmar and Ontario, Calif., says there's a steady flow of job applications coming into his business. As a start-up, Strauss says his pay rate is solid and he's not having trouble finding top talent. "We have no trouble finding inside and outside people, and we are not paying a premium for it," says the 50-year industry veteran. He notes that the pay rate now is actually less than when he owned a $60-million firm with 900 employees, American Landscape, which he previously sold.
In southwest Florida where Blake Crawford is CEO of Crawford Landscaping in Naples, paying more than competitors for labor assures he will attract a quality team member. He communicates to customers that his employees are a reflection of how the company values its customers – services cost more, but you get what you pay for. "We want to have the kind of reputation in the marketplace where you go to work at Crawford Landscaping, and we are going to demand a lot, but we are also going to pay for it," Crawford says.
In Pennsylvania, where Earth, Turf & Wood is based, Jarod Hynson also shoots to be at the upper end of the pay scale. As a result, his turnover is low, which he also attributes to higher unemployment rates. "Jobs are a little harder to come by, so I think employees aren't as quick to transition from one place to another," he says.
As for budgeting labor, Crawford focuses on the details, budgeting by days of work per month. "We turn out what our labor rate is per person and we multiply that by the days in the month," he says. And, the company factors in a 3-percent increase across the board. "That doesn't mean that everyone will get that raise, but we (figure it into the budget)." The last two years, giving this raise has not been possible.
By watching the numbers, Lee Buffington, has bumped Turf Tamer's productivity up 150 percent since 2008. "The baseline we use for productivity is dollars in revenue divided by direct hours paid," Buffington says of the northern Alabama-based firm's No. 1 benchmark for success.
Learn how companies are using bonus pay and health insurance to hire and motivate employees – and keep their labor costs low – at www.lawnandlandscape.com. Search “Benchmarking.”
The author is a frequent contributor to Lawn & Landscape.