Employee Wages/Salary Increase

plazaman

If you could pay your employees more money, do you think they will cause less headaches on your and your company and perform better. Or do you think they would be unable to change?

I personally think money has alot to do with it.

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Mud Master

No...

Simply put in my experiences...an extra couple dollars and hour wont improve your bottom line, productivity, employee's attitude or work ethic..

Production incentives however tend to work a lil' better..

Install X amount of product within X amount of time and receive X amount in bonus...works well for hourly men who aren't used to getting paid by piece work.

FWIW...if a guy is dragging consistently & causing you alot of headaches, regardless of his pay..he may not be the guy you want on your job to begin with. Any man worth keeping understands the concept of you get paid what your worth, and that if he proves himself to be worth X amount..he will get it(With any respectable company mind you)

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Floordude

I ride my help so hard, they never make it to the pay raise talk, before they are gone, looking for something easier, or at least a boss that is not such a hard ass.

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KillerToiletSpider

We are union, labor is a fixed price.

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Mud Master

Also, just because I remembered this..

I know two residential contractors in my area, and also read the same thing in Remodelers Magazine.

They provide so much incentive for each employee on a given project, obviously the super will get more than the laborer, but everyone gets a cut. Now there is a max. percentage & a min. percentage they can make on any given job depending on the total contract amount.

Should they bring it in quicker than scheduled, they get the max. percentage of the bonus...If they were to bring it in on time, they have a certain percentage they get...However, should they bring it in OVER schedule, they will actually lose money.

I really wish I could find that article to back this all up because I believe the two guys here follow it, or may have even gotten it there.

But the point is, extra money is an incentive, but it has to be sparingly ya know? If they know they will make the same amount regardless, it kind of defeats the purpose. However, if they know that if they work hard enough they can make say an extra $500.00 at the end of the project on top of thier inital salary, that is just more motivation..

In all my experiences, employee & employer...it has always worked well for me.

P.S. I will try to find that article in RM, as it explains the whole process alot better, and will correct any misunderstandings about I may have, as I do not implement that system in my company.

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rino1494

An increase in pay won't make them a better employee. With that being said, if you do have a good employee, an increase in pay may keep him around instead of going elsewhere.

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Any Season

Wow, that is a guide in how not to manage. To answer the original question though, I think there is a ceiling to how much more money you can pay someone to get more production before you cross over the fine line of a person thinking they are untouchable and above criticism. You just need to figure out what the appropriate numbers are for your trade.

plazaman

Heres a quick run down. My dad has been running this business for 20+ years doing residential with very few commercial. Even to date, we havent completed much commercial. The few that we did complete, the pay was great.

Ive officially been with the company for 2 years since i graduated. Slowly, i been making changes, but it seems it such a long road ahead to where i want to go. I want to start phasing out residential and start with commercial & goverentment/city contracts. A step further would be a strictly a painting & sandblasting contractor.

Over the years, we had a high turn over rate. I think 1 reason is because 1) im assuming the pay wasnt great,
2) Residential is so much easier to get into vs. commercial. In my opinion, its what separates the average joe from the rest (no offense to the residential contractors) It has happen to us many times over the years. Guys learn work, saves up, buys a house, buys a van, and boom, hes a residential contractor.



I think if i could pay better wages, i could possibily build the business i want. But what do i know, im only a 22 year old with a vision.

Rich

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Heritage

They are employees. There is a fixed pre-determined industry value based on their level of skill...know it and pay it. Pay too much...you're losing money. Pay too little...they will move on.

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Mud Master

Rich,

For what it's worth..it is not any more difficult to get into commercial than it is residential. In fact in some aspects, it's easier. In commercial you deal primarily with GC's, Builders, Developers & Real Estate investors, Most understand construction, the process & the trade & business end. They bid out a job, knowing what the potential costs are.

With homeowners, you usually don't get any of that. There is alot more time invested in educating and walking through, also..the clean up & nit-picking is unreal(one reason I HATE home improvement work, no offense). I do a full clean up at the end, including scrapping & wiping everything down..but the HO's will get you for that one piece of dust stuck way down in the corner(FYI, government is the same way, but worse). You are not trying to work out of the HO's mind & try to duplicate what you think is in thier heads, as alot of cosmetic remodels are(Though I have to say alot of people on this site have been saying they do alot of CAD work for thier remodels now so to have a plan to work from). In commercial, there is a plan, change orders are minimal, and it is all in black & white.

Yes, the pay is better in commercial, but the applications are different & commercial spec building is more expensive that residential spec building, as well as code compliances that are different.

If you wanna get into commercial, or government work I would do one or some of the following:

1. If your a MBE,WBE or an SBA(if your not, become one)..than register with DOT, they have certain percentages of EVERY project set aside for minority and small business. Also, since you do sandblasting, its a specialty & not a whole lot of competition..being on thier bid list could have you doing highway bridges and so forth with few competitors.

2. COLD CALL. I know it sucks, but taking that minute to call, introduce yourself, asking to speak to someone in charge of procurement or even just asking to fax/email a introduction letter about you could work wonders. I did it with a buncha builders & contractors when I started 13 years ago. Most never responded, a few called and I did some jobs for them..but there is one I still work for today. When I started working for him he was doing small reno's for a property management company, had 3 guys on the payroll and did max. $300,000.00/year. Now he is doing full commercial real estate including office,warehouse,restaraunt,flex space in excess of 500,000sqft. Don't be detured by the smaller guys and jobs that seem insignificant because you never know where the contractor will go, what contacts he or her has, or what kind of relationship you will build over the years.

3. Government work is absolutly WONDERFUL if you can get into it. My dad did it everyday for 28 years, and got to the point that he had 8 guys working in one govenment building everyday 15 minutes from his office. The work was steady & the money IS GARUNTEED, as there is a check in the mail exactly every 30 days from completion. Now, as I said before, some PM/PE's are worse than Ho's when it comes to nit-picking. I remember one job I did for the US government about 6 years ago. It was 3:30 & we were just finishing up Phase I(one) of a job building offices in an old warehouse they used to house foreign war equipment. We literally had one small pile(shovels worth) of dirt left on the floor, my helper & another guy were WALKING to it to pick it up..the PM was walking around and checking it, saw the pile of dirt & denied me invoice submittal & had to wait another 60 days because he probaly got pissed off at something earlier in the day. That is common.

4. More on Government, you can register with them as you would your County, City & State government, but you wont see much from it. Your best bet is to register with ANY governments GSA services, and once your name is on the map, you will get ITB's. However, the BEST way is to know someone, because that is how you get hooked up with a PM and get all his/her work orders and are first on the list. I got alot of work from a referal from a government PM. Once in awhile you also get to do amazing work, my competitiors have done work on the pentagon, SSA, Naval Academy, APG, US Treasury Building & Plenty of US courthouses(I bid two, but was too high). Doesn't sound that good, but its all historic preservation & your name is forever imbedded in that.

5. Lastly, call friends in the business. Explain that you are trying to get into commercial & do they know any commercial contractors? If they do could they either forward your information to them, or give you thier number and do it yourself(I recommend this one, going in person plus using a respected trade member of thiers & yours as a reference is a BIG A++ in a Commercial GC's book). Networking is the KEY to success in ANY business.

Don't be so scared or think it is too hard, it is really not. And just an FYI, those guys that learn a trade, buy a home & a van than go to be a contractor, they do the same thing in commercial, your not avoiding it. I know one former super of my competitor left them telling them he was going to work for someone else, so they never signed a no-compete agreement. Well low and behold he went out on his own & took 3 major developers from them. You can do anything if you set your mind to it...but to start just follow some of those suggestions above.

GOOD LUCK!!!

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Any Season

No offense man but that is as ignorant as saying some 22 year old guy has a sandblasting company, does a few painting jobs then finds out what the competition is charging for commercial painting, then solicits all GCs in the area and undercuts everyone. Voila! You're a commercial painting contractor.

plazaman

I dont follow or you misunderstood me.. what i meant to say is that so many hacks and wannabees are in residential , not so much in commercial.

I dont understand your part about me undercutting everyone, nor did i ask any pricing info.






Mud master, thank you very much for that info. im printing it and placing it on my wall. I'll have a few more questions later.

thanks
Rich

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SelfContract

Any pay raise must tie to employee's performance review at year end. Have it clearly spell out in employee contract/brochure/manual, etc.

tnt specialty

Rate of pay has little to nothing to do with performance. It's all about ethics. The employee either has it or doesn't. If he/she is good, you'll pay to keep them. If they like the boss/working conditions, they'll be loyal/hard working.

Having and currently doing both commercial and residential. Commercial is, by far, the easier of the two to "get into", as well as execute.

Commercial is typically based strictly on price and performance, whereas residential isore of a "sales" thing.

Commercial is also typically much more straight-forward, less commplicated than residential. Plus your typically dealing with professionals who want a job done correct & quick. Whereas with a homeowner you've got to continually educate them, and "hold their hand" through the process.

A plus for residential, is that there's much more oportunity for higher profits; You don't need such a "sharp pencil"; A less efficient contractor can muddle-through and still make a profit. Whereas with commercial goes cheap-cheap, and you better be on your game, cause it's extremely competitive, and your competition is typically good at what they do.

plazaman

Comment on this.

I give raises about every 6 months. Mostly based on skills learned. My guys arent the fastest nor the smartest, 1 reason is because we dont specialize in anything at the moments. Thats about to change though. I do rennovations, and basically handle all phases in the rennovation process. The way how i look at it is that if i were to get out of a residential market, work my way into a commercial setting, i could potentially make more money, and paying greater wages. I live in NYC, so commercial def. pays well.

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