“It’s all about the people.” We’ve heard that expression hundreds of times. And you know what? It has been right every time.
When you think about the landscape industry, many things are true across all companies: We all use similar tools, equipment and vehicles. We all perform similar tasks. We all service similar clients. Beyond those similarities, there really is only one feature that distinguishes the successful landscape contractor from unsuccessful contractors: The people.
A landscape contractor with employees who are well-trained, customer-oriented and properly motivated has a significant advantage against the competition.
Think about it: Quality employees use tools, equipment and vehicles more effectively and safely than less skilled employees employed by a competitor. This saves the company money in reduced workers’ compensation claims, tool breakage and vehicle repair costs.
Quality employees perform job responsibilities more efficiently and with greater horticultural precision than less skilled employees. This increases the company’s gross margin and job quality scores. As we know, gross margin contributes significantly to net profit, and job quality is a key driver of job retention and attracts new clients to the company, which increases revenue.
Quality employees put the customer first and go the extra mile to ensure their satisfaction; conversely, less skilled employees simply want to get the “job” done. The personal touch between a customer-oriented employee and a client goes a long way toward job retention and word-of-mouth marketing.
The most important feature in employee retention is realizing that you only want to retain the right employees, not all employees. Retaining poor employees decreases profitability due to inefficiency, increases risk due to potential injury and damages the company’s culture by placing tenure above merit, which can lead quality employees to restrict their performance to fall in line with under-performing employees.
Best-in-class companies direct special retention efforts at the foremen and account manager positions. These two positions are vital to organizational success in that they have direct impact on driving revenue (e.g., identifying enhancement work), improving gross margin (e.g., utilizing labor and materials efficiently at the job site) and role modeling proper customer service behaviors (e.g., job retention). Accordingly, you should pay close attention to retaining the quality employees in these two job classifications.
There are three key components to improving employee retention: measurement, engagement and communication.
Every employee should receive two ratings each year: job performance and job potential. Based upon a job description, each employee should be judged from 1-5 on how well he’s currently performing his job. Second, each employee should also be judged from 1-5 on the likelihood that he will be promoted in the next 18 to 24 months. While employees should see their job performance rating each year as part of the feedback process, they should not see the job potential rating.
You should retain employees who receive a job performance rating of 3 or higher.
Employees who receive a job performance rating of 3 or higher and a job potential rating of 3 or higher must be retained. They are capable of leading the company into the future.
Most managers believe that pay is the primary driver of employee retention. It’s not. While it’s a part of employee retention, employee engagement is a greater determinant of employee retention. Employee engagement is the connection that an employee has with the company such that the employee identifies with the company, exerts discretionary effort to improve the company and wants to remain part of the company.
Employees with high levels of engagement enjoy being with the company for what it represents; employees with low engagement stay with the company merely because it’s a job. There is a big difference. Highly-engaged employees consistently take the initiative and do more than is expected of them because they sincerely want to make the company more successful; employees with low levels of engagement only do what they are told to do to keep from getting fired. Thus, the goal is to increase the level of engagement to enhance employee retention.
Landscape contractors should consider the following to increase employee engagement:
- Create an organizational vision and mission. Companies that have a written mission statement, vision statement and core values can significantly increase employee engagement. These documents show employees the company is mature, stable and strategic. Those qualities convey a sense of pride that lets employees know they should remain with the company, contribute to its operations and then share in its inevitable success.
- Create an on-boarding program. Most landscape companies’ on-boarding programs are really just a one-day orientation filled with too many safety videos, too much paperwork and too little personal concern. A real on-boarding program welcomes the employee to the team with introductions to team members, provides an overview of the company, its goals, and unique organizational culture and specifies the new employee’s work responsibilities, key accountabilities and performance expectations across 30-, 60- and 90-day time frames. This level of structure, clarity and professionalism will certainly impress a new employee to the point that his/her level of engagement will be heightened.
- Connect work with company success. For the employee to feel connected or engaged with the company, he must know how his/her specific work behaviors contribute to team accomplishment and organizational success. Thus, daily huddles should clearly communicate the work responsibilities for each employee and how those tactical responsibilities drive an organizational outcome (e.g., job quality, gross margin, job retention). Once the employee realizes that his or her work is really part of a larger effort, he is more likely to become engaged and exert additional discretionary effort to benefit the company further.
- Involve the immediate supervisor. The immediate supervisor must be a strong role model of the company’s values, have high integrity and be a coach committed to improving the new employee’s skills, professionalism and contributions to the company. The supervisor provides frequent feedback, is a good listener and represents the ethical character of the company. This type of role model can quickly increase a new employee’s level of engagement and intent to grow with the company.
- Share a development plan. As part of the on-boarding program, show the new employee a development plan that will increase his personal and professional worth during the first 90, 180 and 270 days. This plan can include: safety training, gardener training, hazardous materials training, stretch assignments and possible administrative responsibilities (e.g., receiving deliveries, vehicle inspections). This plan shows the new employee that a promotional path is available if he does the right things in the right way.
Consistent communication from multiple touch points (e.g., branch manager, account manager, safety officer) keeps the new employee feeling engaged, part of the team and optimistic about remaining with the company. This communication should focus on the work being performed by the employee, the employee’s personal interests (e.g., hobbies, favorite restaurants, family), and ideas the employee has for improving the job, the team or the company.
While effective communication is on-going, there are several key events that can formalize the communication process that can keep the employee connected, aligned, and retained by the company:
- Daily huddles
- Weekly one-on-one meetings
- Monthly pulse meetings
- Quarterly and/or annual performance reviews
- Semi-annually have the owner distribute paychecks and identify each employee by his/her first name
- Annual rewards and recognition ceremony.
This two-way communication process, balancing professional development with interpersonal rapport, spanning multiple time frames, provides a suitable framework providing the employee with ample opportunity to listen, lead and learn from others. Taken collectively, this communication network is vital to retaining the right employees, especially foremen and account managers.
During the next week, identify the top two or three key employees you have (e.g., high job performance and high job potential) and design a retention plan for each of them.
These plans should be tailored to each individual, yet will likely share some common characteristics. Share the plan with them and begin to focus on those employees as key assets capable of improving company morale, process efficiency and financial success.
The author is a consultant with The Harvest Group, a landscape industry consulting firm.