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DALLAS – About 200 landscapers descended on Dallas last month to attend GROW! 2016, a three-day conference organized by Lawn & Landscape columnist Marty Grunder (read Marty’s takeaways on page 32).
A key part of the event was a tour of Complete Landsculpture, a $15.5-million, full-service company. So before sunrise, attendees boarded a half-dozen buses to Complete’s headquarters northwest of the city. Complete’s management team had arranged a full tour of all its major business units and operations, holding nothing back.
Complete has two facilities: its headquarters in Dallas and a satellite location in Oklahoma City. It has 195 full-time employees in season and runs 28 crews. It offers design/build, maintenance, landscape lighting, irrigation, pools and water features and lawn care. The Oklahoma City branch, which employs 25 people and opened 18 years ago, also offers snow and ice management.
The following are some lessons learned from the tour:
1. Complete sources plant material from three local nurseries, as well as the online service Plant Bid. The web-based system allows it to source material from many other locations outside its typical area quickly, according to David Graeber, purchasing agent.
2. A two-man crew works from 11 a.m. to 9 p.m., and is responsible for unloading and cleaning out the crews’ trucks, gassing them up and loading material and equipment for the next day’s jobs. Project managers are emailed at 3 p.m. for the next day’s trailer requirements.
3. Each month, supervisors and other management nominate a crew of the month for high levels of quality, performance and profitability. Each of those 12 winning crews is automatically entered into a crew of the year contest. The winning crew gets parking spots near the front door, their truck gets a decal and the crew gets high-end boots.
4. Gene Freeman, VP and co-owner, says Complete’s most profitable services are tree work and landscape lighting, and so these two items are cross-sold and included in all proposals presented to clients.
5. All Complete employees are eligible for quarterly bonuses, which are paid for with 20 percent of the company’s profits. Half of supervisor incentives are paid based on a system the company calls Management by Objective. These goals are written quarterly and are very specific, like taking a Spanish class, earning a new certification or setting up a lunch-and-learn with local property managers, says Chris Strempek, president and co-owner.
6. Salespeople earn commissions on each project, but those payments are cut back or eliminated if the job misses its gross profit margin targets, Strempek says. This keeps the sales team engaged with the production team and ensures they bid the job’s hours correctly.
7. Complete uses Include’s Asset software to track sales leads and each job’s gross profit margin by line item. Complete’s purchaser reports to the accounting department, not operations or sales.
8. Jennifer Freeman, controller, says the company has moved to spend less on pay-per-click advertising and invest more in building relationships through lunch-and-learns for builders and property managers.
9. For projects valued at $10,000 or more, Freeman’s department tracks the hours and percentage of jobs completed by week. Any variance of hours is discussed with sales, production and management in real time, not after the job is completed and any profit is eliminated.
10. Complete uses its facility as a showcase for its work. In the back of the offices, it has a showroom where prospects can see and touch samples of pavers, wall facing, pool tile and gravel that could be used on their properties. It also has examples of granite countertops, gas grills and outdoor refrigerators that could be installed.
11. Each salesperson is responsible for creating a production ticket (essentially a work order) that is as specific as possible, and is then shared with the job’s production manager, crews and any subcontractors, says Bram Franklin, salesman. All Complete employees who will be involved on the job have a pre-production meeting at the job site to discuss the ticket and make any decisions necessary.
12. Franklin says Complete salespeople schedule a final walkthrough with the client after the job is finished, and present the final invoice on site to encourage prompt payment.
13. Complete uses the H-2B program for some employees, but relies mostly on referrals from current crewmembers. It offers what it calls a “1-2-3” recruiting bonus: If the person a crewmember refers stays for one month, the employee gets $100. If he stays for three months, the employee gets $200. And if the new recruit stays a year, the employee gets another $300. These bonuses are paid out in public at weekly safety meetings.
green, ice cream and everything in between
At the annual CENTS show in Ohio, attendees learned about employee relations and training. By Katie Tuttle
COLUMBUS, Ohio – Hiring and retention was on everyone’s minds at January’s Central Environmental Nursery and Tradeshow, hosted by the Ohio Nursery & Landscape Association.
“How many of you would use more employees if we gave them to you?” asked Monroe Porter, president of PROOF Management Consultants in Richmond, Virginia, in one of his sessions. The majority of those in the room raised their hands.
As a conference and trade show for all parts of the green industry, many of the educational sessions centered on running your business in regards to your employees.
Here are a few takeaways:
You scream, we all scream.During the keynote speech, Jeni Britton Bauer, founder and owner of Jeni’s Splendid Ice Creams, spoke about her business and how she’s built it to what it is today. Bauer stressed that “Every company is a community” and “your community is a lush garden if you nurture it, and it withers and dies if you don’t.”
She also said it is important to remember that customers are a part of that community, too.
When it comes to running your company, Bauer said the 21st century has provided more tools, such as social media, that weren’t around when she started her business. Those tools help with bringing people together. She says a good company will bring customers in and listen to what they have to say.
In regards to the competition, Bauer said you have to know who you are and who you’re not. A good company understands what it does that’s different from anybody else. When it comes to your business, be creative but think inside the box. “You need to know your parameters,” Bauer said. “That’s the box you create.”
be a teacher.Porter said you should recruit work ethic and teach skill. “I can teach someone a skill, but it’s very difficult to teach someone how to work,” he said.
When it comes to training, he said to do it pre-job, not post-job. “Tell them what to do, show them what to do, let them try it, observe the results and then praise or redirect,” he said. The first day of the job is when you start training because the person will listen to you and you’re not addressing anything that they’ve done critically.
Porter also suggested making an appointment every week with a different employee so you can check in to see how they’re doing. “Leadership is about being involved and connecting with people,” he said.
Recruiting.Hiring for your business should be done proactively, according to Seth Nicholson, president and chief operating officer of The Bruce Company.
“A lot of people are always reactive instead of proactive,” he said. His company tries to forecast six months ahead, which can be challenging, but he said it’s better to have extra than to fall short.
Build a better budget
LMN shares tips on what to consider when creating your annual budget and how you can make it work for you. By Kate Spirgen
Your budget can help you determine everything from how much to charge for a new job to when it’s time to upgrade your equipment to whether or not your foreman can have a raise he requested.
Mike Lysecki, chief technical officer of software company LMN, shared tips, tricks and ways to make an accurate budget for a better bottom line at the first of a two-day LMN training session, sponsored by Caterpillar, in Cleveland. Here’s are the dos and don’ts you should be thinking about when making your budget this year.
Don’t pay your workers a low wage.
“It’s costing a ton of money because your staff isn’t making good decisions,” Lysecki said. “But when you’re looking at your budget, you want to spend as little on staff as possible. That’s not always your best move.”
Do attract talent by having a good reputation and company culture, and train staff well. The more efficient your people are at getting jobs done, the more time they can spend making more money. For example, spending a little bit more on wages for a good foreman is worth it since he’ll help get jobs done faster, and be able to take on more work, Lysecki said.
Don’t guess on estimates.
And if you have guessed in the past, don’t rely on old numbers.
Do have consistent estimations
with accurate pricing and a trainable system.
Don’t be unorganized about job plans or relay out-of-date information on the status. If crews don’t have timely updates on metrics, they don’t know how they’re doing on a project.
Do have a job plan that answers the who, what, where, when and why of the project.
Use a scoreboard to see how efficient your crews are. This will also help you recognize achievers and identify underachievers.
Don’t estimate by unit price. If you’re assigning cost just by labor, rather than the price of material, you’ll end up bidding too high on easy jobs, and too low on hard jobs.
Do think of overhead costs as those that aren’t recovered in job estimates. Costs that can be recovered in estimates are overhead costs. For example, you wouldn’t include marketing costs in your job estimations.
Setting crew goals.
Field labor ratios are not only useful for determining how efficient your crews are, they can also tell you when you can afford to hire another employee, and help you explain what your crews need to do to get a raise.
Your field labor ratio is the percentage of your budget allocated to field labor. If that number is too high, either you aren’t being efficient or you need to take on more work. By calculating this number, you can also determine how much more revenue you need to bring in to justify an employee’s salary.
If your foreman wants a raise, explain to him their crew will have to do enough work to keep that field labor percent the same. Just take the crew’s combined wages for the year, divide it by your field labor rate, and that will be the goal the crew needs to meet in order to get a raise.
According to LMN, the industry average is just over 24 percent.
Getting more efficient.
By looking at how long your crews are taking to do each task, you can see how much money you’re losing to down time and whether or not upgraded equipment could be the answer.
For example, if you’re thinking of buying a covered trailer, look at how much time employees are spending loading and unloading a trailer and multiply by their wages. If a covered trailer is cheaper than the wages you’re losing, it could be a good investment.
job with larger equipment. You should be able to keep your profit margin without having to pass the price of the machine onto the customer.
Since jobs are going faster, crews can move on to other projects and make more money. “It’s a lot easier to buy equipment than it is to find more manpower,” Lysecki said. “The hardest thing to find and train and keep is people”
If you’re thinking of doubling up on equipment so that each crew has its own, look at the cost of sharing equipment. Think about the time it’s taking for someone to drive the equipment from the shop to Job A, the transfer from Job A to Job B, the unloading and then the return.
“Even if they’re just stopping for 15 minutes to talk, with four guys, that’s an hour right there,” Lysecki said.
ASK THE EXPERTS
Hot hiring issues
Q: What are the hot human resource issues affecting landscape contractors?
A: Here are three popular HR topics:
1. Wage and hours. The seasonal nature of the industry and variable hours due to the weather create unique pay system challenges for contractors. Many have found a fixed salary for a fluctuating workweek pay system to be the most practical.
This is a pay system in which an employee receives a set weekly salary, regardless of number of hours worked, but the employer only owes half time for overtime compensation. A variation of this pay system is a daily rate pay plan. In it, if an employee does not work for a day, the employee is not paid. These pay systems may be mixed with an incentive based on things like production or sales.
There are states that limit or prohibit the use of the fixed salary for fluctuating workweek method, so each employer needs to evaluate that for the state in which they do business.
Another wage and hour issue that arises in the industry involves travel time. The general principle is that home to work and work to home travel is not compensable.
Driving time is compensable, regardless of whether the employee is driving their vehicle or the company vehicle, if the employee is driving to the employer to move to job sites, or to transport supplies, tools, equipment or other employees. It is often permissible for employers to pay a different rate for driving time compared to other job duties. The hottest issue now regarding wage and hour concerns is the United States Department of Labor’s proposal to more than double the minimum salary level for employees to be exempt from minimum wage and overtime. This would affect those who have exempt supervisors, managers or team or crew leaders.
The DOL proposal would increase the exempt salary level to approximately $50,000 a year.
The DOL received approximately 290,000 public comments in response to its proposed regulations, issued on July 6, 2015.
Ultimately, the DOL may permit employers to include a nondiscretionary bonus available to the employee as part of the salary requirement.
The DOL is also considering a change to the “duties test” for exempt employees.
This particularly affects the executive exemption, which may cover a supervisor or team leader. Currently, an exempt employee who also performs non-exempt tasks may still qualify for the exemption, such as a crew supervisor who does the same work as the crew he supervises.
2. Medical issues/retaliation. Retaliation continues to be the prime claim filed by current or former employees.
That is, an employee alleges that he or she engaged in protected activity and was retaliated against for doing so. This includes complaints about safety, pay and work conditions.
One area where retaliation frequently arises is an individual who is terminated as an outcome of a job-related injury or illness.
Virtually all states prohibit an employer from terminating somebody because of a job-related injury or illness.
However, states permit such a termination when it is due to business reasons, such as employee negligence, employee failure to follow safety procedures or a positive drug test result.
Two questions employers should consider before terminating an employee are:
A. Did the employee know that the job was at risk or the action could result in termination?
B. Did the employee engage in protected activity and if so, what is the timing of that activity compared to the date of the discharge?
When the timing of the discharge is close to the protected activity, such as a job-related accident or injury, be prepared to establish that termination would have occurred regardless, and that the reason for termination has been applied consistently.
3. Harassment. Contractors are in a unique situation concerning potential harassment issues. Not only must they be concerned about the behavior of employees toward each other, but they must also be concerned about the behavior of third parties, such as customers and vendors, toward employees and vice versa.
An employer has a high level of responsibility to maintain harassment policies and training. During the onboarding process, do more regarding harassment, discrimination, and retaliation policies than just asking the new employee to sign off on them.
Take the time to review these key policies so an individual understands what is expected, what is prohibited and how to report it.
Richard Lehr Lehr, Middlebrooks & Vreeland, PC NALP HR advisor
Ask the Experts is brought to you in partnership with NALP, the National Association of Landscape Professionals. Questions are fielded through NALP’s Trailblazers, the industry’s leading company mentoring program. For more questions visit Landscapeprofessionals.org.
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