- THE MAGAZINE
It has been a long road, but after 20 years in business I'm finally giving myself a raise. But this increased financial success got me thinking about what I make and what I pay my techs. In fact, we totally reevaluated things within the past year or so and in the process turned up the profit and start paying techs very good wages.
For example, if you meet my bare minimum as a tech, you'll make $40,000 in the first year. And you will either start to excel and make close to a grand a week in the second year or you won't be around after that. I am so very tired of accepting mediocrity with my employees!
I have a guy on track to make in the mid $50s this year, which is his first year with me, and he will be in the mid $60s next year. Although this is higher than we paid in the past, my percentage of gross going towards payroll is actually less now. Now I have fewer people doing more work and getting better pay for it.
But Steve, other carpet cleaners in my area tell me I am paying my people too much. In fact, they are calling me super angry because, in their words, I am “upsetting the wage scale” and now their employees are demanding more money too! In fact, several of my competitor’s techs have called asking me if we are hiring!
So am I paying too much? And thanks for all you do for us, Steve!
-Reflecting in Roanoke
Reflecting, I am very proud of the business model you have profiled above.
I am firmly convinced as an industry we do not nearly pay our technicians well enough. (I know I didn't when I was in business and shame on me!)
The result? You really do get what you pay for and sometimes you don't even get that! So if you are paying marginal wages don’t be surprised if you get marginal workers, and even worse, marginal human beings!
Remember that you are sending your employees into your customer's inner sanctum, their home. So if your workers are sub-standard, this can have some major moral (not to mention legal) implications for you!
Your financial results of paying more as of now are interesting and encouraging, Reflecting. More money for higher quality workers, which in turn translates into higher profits for the company. Excellent! I hope this continues and please keep us updated here at “Ask Steve!”
I too question the conventional wisdom on what as an industry we pay our carpet cleaning technicians. I mean, where is it written that a journeyman crew chief has to be lower middle class his entire life? No wonder we have turnover!
On this subject of “paying too much,” I always challenge our SFS seminar attendees with two questions:
1) “Are your employees earning at least 20% more than they could anywhere else in your market area doing the same type of work?” (I stole this one from the Maine mail order entrepreneur, L.L. Bean.)
2) “Are you paying your employees enough that, if they wish, they can qualify for a house loan?” (Of course, they may spend all their wages on beer and fishing lures but that is not the point.) Most quality people have the American dream of owning their own house and if you don't give them that opportunity, they will go elsewhere.
There is always a long silence in the SFS seminar after I propose these thought-provoking questions. I hope all of my “Ask Steve” readers reflect on them too.
And no, I don’t think there is such a thing as paying your people too much. As long as you are covering all of your overhead (including setting aside funds for depreciating equipment that will need to be replaced) and saving for future expansion, plus paying yourself a nice salary and still making a profit, why would you pay any less?
I always told my employees I would be delighted if they made more money than I did! And why not? If you have structured your compensation so that when your employee makes more you make more why would you restrict their earnings?
Actually one of the best ways to pay your people more is to dramatically increase their commission rate on additional services they sell. (Carpet protector, “Stay Beautiful” maintenance plans, etc.) Then book each tech one less job per day. With this extra time for selling (remember you have to give them training on how to do this) they will make more money and be less tired.
NOTE: Some of the best sales training you can give your employees is found in my free manual “Up-selling on the Home Front.” Download if for free HERE. Or just write me at stevet@JonDon.com and I will e-mail you the training course!
Of course, with this book less/sell more strategy, you will have to hire more employees which you probably should have done anyway because most of us (myself included when I was in business!) work our people too hard and have no reserve. And you will have to buy more equipment which will make your distributor happy too!
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