One of the things that we know as an owner/operator of a home service company, is that you must focus on team members. Nothing in your business happens without them. Though they may not be listed on your balance sheet, your people are your greatest asset.  As with everything else in business, you want to leverage your assets.  

In our previous two articles, we explained the concept of The Compensation Equation and how it affects profitability.  In this last installment, we’d like to dive a little deeper into how your compensation plan affects recruitment, retention, and company culture.

Recruitment, Retention & Company Culture

The Compensation Equation was created to help home service businesses map out custom compensation structures for each unique role. The goal is not just to pay a competitive wage, but to incentivize profitable behavior and attract/retain top talent.  How you pay going forward will affect the way your team views their roles. However, the first mindset that may need to change is your own.

It's been a standard practice in the trades to lean on bonuses, commissions, and spiffs to reward or motivate results.  However, these methods often exclude the majority of team members and can be difficult to administrate. Also, they do little to elevate your company’s culture.  Utilizing performance-based pay to incentivize each role is what will take your business to the next level and beyond.  Here’s an example using the role of CSR:

If your company charges a service fee to go on calls, but you waive the service fee to book appointments when business is slow, there's no incentive for CSRs to book the call with a fee.  That policy negatively impacts profitability. 

Valuable Incentives 

When I ran my electrical services business, we added incentives for our CSRs that paid them on a per-booking call basis in addition to their base.  We paid $1 for every booked call and $2 for a call with a fee.  As a result, the fee call became more valuable.   Additionally, I’d ask my CSR to make outbound calls during slower times, perhaps selling service agreements or putting an appointment on the board.  For successful outbound calls, I paid $5 per call.  That’s when I could see my CSRs’ mindsets change.  They learned they can earn more than just their salary based on their performance.  As a result, more revenue was generated through their efforts than what it cost the business – a win/win for the company and team. Remember, the main goal of compensation is to change and motivate behavior through performance-based pay. How you pay directly affects retention, performance, recruitment, and company culture.  

There are multiple variations of this concept that The Blue-Collar Success Group® uses to help our members.  The success we’ve had with the Compensation Equation has come from it being both customizable and scalable, based on both the market and the size of the operation.

Change, even if it’s positive, can create disruption, so when it comes to implementation, we advise starting slow.  If a business tries to change all the compensation plans at once, you’re asking for a lot of buy-ins. As an example, if I change the compensation plan in my call center, I can do it one of two ways.

Good Pay Equals Top Performance

The first way is to sell all team members at one time on the new compensation plan. The second would be to pick top performers as the test subjects and let them know you’re looking at allowing them to earn more income.  Once that gets tested and you've evidenced that it works, they now become your cheerleaders in rolling out the compensation program to the entire department.

Once that is successfully in place it moves to another department, using the previous department as social proof, not just individuals. This is more of a global approach to the entire organization and helps keep your plan scalable.

Lastly, remember that it's also a training opportunity. You're training them to develop habits that not only make your company more profitable, but that give your team opportunity and a stronger sense of value.  If you pay average, you get average. If you pay well, you get top-performing people. Therefore, the results are always going to be that you get what you pay for. And don’t think for a minute that this doesn’t trickle down to your customers and your reputation in the marketplace.  This is the key to ongoing profitability.

Your team members all need to feel that no matter what role they have in the business, they matter. 

After a journey in the HVAC industry that began when he was sixteen, Chris Crew went on to coach a large electrical company helping franchisees achieve success. Later, he shifted to owning an electrical business, growing it in a four-year span to 60 trucks, five locations, and generating $18 million. Ultimately, he sold his shares to join The Blue Collar Success Group® where he now serves as President. Chris Crew offers extensive knowledge about every facet of in-home services. www.thebluecollarsuccessgroup.com