Last month in this space, I reviewed a series of market projections for 2014 from Harvard University as well as the industry’s leading associations.
Blueprint for Success Chapter 8: A Complete Package
Human resource programs offer a competitive edge in a tight labor market.
|Home Town Restyling’s employees participate in an annual employee appreciation golf outing. Because the company invests in its employees, the turnover rate is less than 5%.|
Ask customers about their remodeling experience, and they’re apt to talk as much about the people who remodeled their home as the project itself: the company owner who understood their needs and helped solve their space problem; the carpenters who painstakingly made the vision take shape; and the office staff who ensured that paperwork was properly handled.
It’s a challenge for any business owner to find good employees, but remodelers have had to contend with a nationwide shortage of skilled tradespeople that has forced them to raise salaries, add benefits and improve the work environment to attract and retain experienced people.
On top of that, our litigious society has caused business owners to take steps to protect themselves from disgruntled employees. This means informing employees in advance of expected on-the-job behavior and retaining appropriate documentation when an employee is dismissed.
To compete in this ever-changing environment, remodeling companies have had to develop professional hiring and retention programs that mirror those used in other industries. What worked in the past is not acceptable in the present, and remodelers unwilling to change have a limited future.
One of the hardest tasks facing remodelers is finding competent tradespeople who are trustworthy, have people skills and are committed to the company vision. There are times when another company might be looking to reduce payroll and has staff available. Or colleagues might know of journeymen seeking a short-term assignment or full-time work.
Another avenue is to contact subcontractors, suppliers and tradespeople. Competent contacts might know of competent colleagues, and a person known to a third party is better than an unknown entity.
Trade schools or technical institutes appear to be the best bet for the future of the remodeling industry, but their ultimate success is yet to be determined. The contribution that trained but inexperienced tradespeople from local schools can make to a remodeling company is typically not immediate.
Probably the worst way to look for tradespeople is by placing an ad in a newspaper. Many remodelers have found this route to be time-consuming and a wasted expense, as the best tradespeople do not have to read want ads to find a new position.
Even the smallest remodeling companies should have procedures established to help determine how a prospective employee will be selected.
Prospective employees should complete a standard application. At minimum, the application should include personal information about the candidate to comply with equal employment opportunity laws (address, phone number, Social Security number); recent salary history; previous employers and where they can be contacted; type of work previously performed; tools owned; type of vehicle driven; and special skills that might be valuable to the company.
If the employee is expected to complete written reports, a writing sample should be collected. Depending upon the tasks to be performed, a math test might be necessary. Some companies even subject applicants to psychological testing to determine if they’ll fit in with the company team.
Once applications have been reviewed, arrange personal interviews. Work off a list of questions to ensure that each prospect gets an opportunity to answer the same questions and that the interviews are well-structured and controlled by the interviewer.
If the applicant is seeking a carpentry position and neatness counts, try walking the applicant back to his or her truck. By looking inside the cab, you can get a glimpse into how a job site might be kept or whether paperwork will be organized.
Just as many remodeling companies face several types of remodeling projects, their employees also must tackle a wide range of jobs. Skilled carpenters might find themselves operating heavy equipment, performing as masons or acting as surveyors. While all potential tasks could never be included in a job description, responsibilities should be duly noted.
Are employees required to present and collect invoices? Price change orders? Call the office once or twice a day? Comply with a dress code? Allowed to smoke on the job? Paid for a lunch break? Any person hired to do a job wants to know what is expected. Ultimately, whether those expectations are met will decide compensation and help an individual develop self-worth.
A well-written job description is very useful for recruitment and selection. It should be used to compare the talents of an applicant with the responsibilities of the position. The less left to chance, the better.
Training and education
Time is a luxury many remodeling companies don’t have, and a new hire is apt to begin work at a job site the first day, especially at a smaller company. New employees begin forming opinions of their new company and new job almost immediately, and being met by first-day chaos or disorder can have a lasting effect.
Ideally, new employees should be slowly immersed into the culture of the company and made to understand that they will represent the company any time they deal with a customer, subcontractor or supplier.
The best way to convey company procedures to new employees is through a company manual or handbook. While developing a manual can be a lengthy and cumbersome process, a manual helps all employees follow the same standardized procedures. As suggested by the Home Builders Institute, employee manuals should cover such subjects as:
Various employee handbook software programs on the market can be modified for use by a remodeling company. Two examples: Small Business Personnel Policies and Employee Handbook, from Administrative Solutions LLC, and Employee Policies on Disk, from Mickey Michaels.
Many business owners see continuing education as an expense rather than an investment. This is especially true in smaller companies, where the loss of an employee for a day can severely affect a production schedule. But not spending the time and money to train staff can be even more costly if employees display incompetence, insubordination or inappropriate behavior.
If time and money constraints prevent sending an employee to a course sponsored by an organization or college, Internet or correspondence programs are available that can be completed at home or in the office.
All staff in a company can benefit from attending a regional or national builder show. The shows offer the opportunity to review new building products, tools, construction techniques and software, and to attend educational seminars delivered by industry experts. Shows also provide an opportunity to meet outside of work and discuss how the company is doing and in what direction it is going.
Compensation and benefits
Remodelers know that controlling direct expenses helps the bottom line. But having motivated employees contributes to the vitality and profitability of a remodeling company, and employee compensation plays an important role.
Before developing a compensation plan, remodelers should get a sense of what the marketplace is offering by reading industry publications and questioning colleagues. In addition to hourly wages, it’s important to know what, if any, benefits are being offered to employees in similar companies.
Establishing a compensation plan or wage scale can give employees incentives to reach certain goals. You might offer a pay raise for completing a course or a longevity bonus upon completion of so many years of work. Profit sharing is another way to reward employees for hard work and loyalty.
Because of the cost of benefits packages, small remodeling companies typically have difficulty putting a package together. Sometimes benefits can be offered by working in association with other small companies. For example, an eyeglass store in the area might be willing to give a discount to a company’s employees. Or a satisfied former client who owns a business might be willing to extend a courtesy to employees.
When a company reaches the point at which profits exceed the cash needs of running the business, owners should con-sider such benefits as paid vacations, paid holidays, medical insurance and a pension plan. Do not start a benefits package unless and until there is some certainty it can be continued. New companies especially should watch cash flow. Even established companies might find that a benefits program is the first item to be cut during an expansion.
Delegation and promotion
While the day-to-day activities surrounding a remodeling company can become all-consuming, it’s important for company owners to realize that their success depends upon the employees. Ultimately, the more activities employees take on, the more time an owner can spend planning the company’s future. Once a remodeler realizes that others can assume some tasks, it’s important to delegate those responsibilities.
Pay alone will not motivate most employees. They want to be respected for their knowledge and work, treated appropriately by their employer and customers, and grow in their positions. Motivation can include expanding job responsibility and the chance to tackle more complex tasks. If employees demonstrate the ability to expand their roles, their responsibilities should increase. If they fill a position previously filled by someone else, they should be rewarded with the title of that position. They should not, however, be promoted or delegated to their level of incompetence, as this will rapidly unravel past successes within the company.
Handling employees is a complicated process that requires sensitivity and creativity on the part of a company owner and the management team. Failure to recognize good work results in employee turnover, which is costly to any company in any type of business. And pushing people beyond their capabilities results in a less-than-stellar product. Company owners should develop well-conceived policies that reflect the type of com-pany they want to create. Implementing those policies will ultimately reflect the type of leaders they are.