Posted by Charley Cormany, EFCA Executive Director
In all the discussions about how to best save energy and power the future, people sometimes forget that the clean energy system of tomorrow will be built not on spreadsheets or by some fancy computer modeling tool, but by hardworking crews in the field. These folks often don’t get enough credit for what they do. But as those of us who’ve run businesses dedicated to building this future know, attracting and keeping the skilled workers who make it all possible is often the biggest challenge.
When you become a business owner you quickly learn the true cost and value of employees. Good ones are hard to find, especially in tight labor markets where there are more jobs than bodies. California is experiencing a significant labor shortage in the trades right now.
I think the situation is even worse for the home performance industry. Home performance work is much harder than other construction trades. Spending all day in a hot attic or a wet crawlspace is difficult on a good day and can be downright miserable on hot summer day or in the middle of winter. I think most workers would prefer being outside digging a ditch or swinging a hammer rather than crawling around in a dirty attic or wet crawlspace.
As a result, contractors tell me the same story over and over again: we have enough business, they say, but we can’t find the labor to support growth. Too much work might sound like a good problem to have, but it often leads to poor decisions.
My own home performance company failed not from lack of sales but from labor challenges. My business partner and I made many mistakes and ultimately the demise of our company was due to lack of qualified labor. Having the right people in the right place is a fine art.
One thing you learn pretty fast running a contracting company is that there is a delicate balance between sales and production volume. If you sell more than you can produce, you lose customers. If your sales don’t keep up with production, your guys go home early. To achieve balance and grow effectively you need great people on both teams.
So how do you find the labor to perform these tasks? More importantly, how do you keep good workers on your team?
After running crews for decades, here are six things I’ve learned.
1. Hire slow and fire fast
If you’ve been in business for any length of time, you’ve heard the expression “hire slow and fire fast.” It’s good advice, but I’ll be the first to admit that I’ve made the mistake of not following it on several occasions.
Hiring can be fun. You get to meet all kinds of people and eventually pick one to be part of your team. Firing people is never fun, at least for me.
The thing to keep in mind, though, is that employees are expensive and training new employees is a big investment. Every time you hire someone new, that person needs to take time to learn your process and understand your company culture to get up to speed. This is why companies that can afford it use human resource experts. But for most small business owners, having a dedicated HR person is not feasible.
This means that whoever is responsible for your company’s hiring needs to take extra care, do research and ask a lot of questions to avoid making a costly mistake. Almost anybody can be pleasant for a few weeks, but after the novelty wears off, a person’s true colors come through.
Here’s a story that demonstrates my point. We had an HVAC tech who was a little weird but did great work. The problem was that he loved to talk, often about radical ideas– government conspiracy stuff—which made it difficult to find folks who could work with him. He treated customers well, but he was hard on support crew and supervisors. He was often less than reliable, especially on Monday mornings after a rough weekend.
In retrospect, it probably would have been good to hire a replacement for him sooner, as we were forced to anyway when he moved on. Good HVAC techs are hard to find, and in order to meet our production demands, we made hasty decisions, completely ignoring the hire slow rule.
The person we hired had 12 years of HVAC experience, which made it easy to get him up to speed. The problem was, he was in the habit of taking shortcuts to save time, a common approach in the HVAC industry. It didn’t take long until quality control became an issue.
Home performance is a business of details and the details matter. When we tested-out his work it would fail: ducts leaked, there was high static pressure, furnace settings weren’t properly configured, etc. This was because he had never been asked to work at this level before (which is a pretty sad statement about the HVAC industry’s accepted best practices).
When we pushed back and made him do things over, the correct way, he got frustrated. He probably thought we were too picky, as sealing ducts instead of crushing them was something he had never been asked to do. I had hoped that being forced to go back and fix things would get old, and eventually, he would learn to do it right the first time. When he got frustrated, I would try to calm him down by reminding him he was being paid by the hour. I was basically saying, “I will pay you what it takes to do it right,” and yet he continued to fall back into his old ways. Eventually, his old employer made him an offer he couldn’t refuse and he moved on.
2. Get buy-in
The problem with that HVAC tech wasn’t just that we hired too quickly. It was also that he didn’t buy-in to what we were trying to do. He didn’t believe in home performance, hadn’t been formally trained, and I honestly don’t think he cared.
By contrast, when I worked at Recurve, the entire crew was required to take a three-day home performance class offered for free by PG&E. In fact, everyone in the company had to spend some time in the field in order to have an understanding of what we were trying to achieve.
At first glance, this approach seems incredibly expensive—and it is. But in the end, the upfront cost of training your crews is a lot less expensive than constantly hiring and training new workers who don’t understand or care what you’re trying to achieve.
There is always an opportunity cost when you hire someone new, as training them takes you away from your normal duties. Having experienced crews that can solve problems and do good work with minimum input allows you to focus on your job and makes your life easier overall.
Ultimately, I think our business’ biggest mistake was not getting “buy-in” from workers on what we were trying to achieve.
3. Provide a clear path for advancement
So, once you have some good employees, how do you keep them happy so they’ll stick around?
One thing that is often overlooked is making sure that there is a clear path for advancement. Workers are often more willing to do the hard part of the job if they recognize it won’t last forever.
In our business, our crews consisted of crew leads and workers. The crew lead drove the truck, dealt with homeowners, filled out paperwork, chased materials, and did most of the HVAC work on the furnace itself. The other workers spent a great deal of time in the crawlspace or attic pulling ducts and getting covered in mastic (a sealant used on ducts). If those workers knew they had a chance to become a crew lead, they were more likely to stay on.
It’s important to clearly define ways employees can grow and improve. At one company I worked for, pay scales were increased as you acquired new tools. The logic was if you had more tools you were likely to be more productive. Another approach to this was to give crews a tool stipend every month as part of their pay. Again, the concept is that job-specific tools tend to save time and make crews more productive.
4. Education counts
Many companies offer additional pay based on training or certifications. Training typically pays off in the form of increased productivity.
Since educated crews are more productive, perhaps you should consider providing the education. Sending employees to classes or providing on-the-job training (OJT) is a great benefit. One approach is to schedule jobs so that your crews finish early one day a week and return to your shop for some training.
Another tactic I used was photos. At our weekly tailgate safety meeting, I would hold up two pictures from our jobs. One was an example of really good work and the other showed a problem. The challenge was to identify which was which. This was a very simple form of OJT, but it worked. Over time our crews learned how to do better work and were more critical of their own results.
5. Incentives can work
Another idea is to create incentives for doing good work. Bonus structures can be effective, as long as they are perceived to be fair. A bonus for getting jobs completed on time can be very useful. I would suggest that customer satisfaction should be a part of your bonus structure as well.
Bonuses don’t have to be expensive to be beneficial. We used to have competitions amongst crews to see who could make the tightest duct system. The prize was a case of beer and bragging rights. It was amazingly effective.
Using bonuses as a way of acknowledging difficult conditions is a good idea too. A friend told me about a contractor he knew who would pay his crew a flat $150 bonus for work in any crawlspace less than 18 inches high. He incorporated the bonus into their pricing structure to cover costs and then shared it with the crew.
6. Say “thank you”
One of the easiest things you can do to keep your employees happy is simply saying “thank you.” I am very serious here. The simple act of acknowledging your employees and thanking them goes a long way towards building effective teams. It’s amazing how often managers forget to do this.
Your success is based on your employees
The bottom line is that your bottom line depends on your workers. You need to acknowledge their contributions and listen to their challenges. You should provide some form of continuing education or training, and make sure they buy into what you are trying to achieve.
Well trained, happy employees reduce labor costs
In the home performance industry, labor accounts for around 75 percent of a company’s costs. You can try and pinch pennies by buying cheaper materials or asking vendors for discounts, but in the end, happy, well trained, crews who do good work without tons of supervision will save you far more.
Focus on building happy crews who are trying their best to do good work. Be fair, pay them as much as you can, and say thank you. Recognize that the boots on the ground, doing the hard work, are the real heroes of the industry. These simple steps will go a long way in creating and retaining happy employees and making your business a success.
Efficiency First California
Image from iStock