Lawn & Landscape, November 2011
John Newlin says he, "broke down and gave out raises last year." It was a nerve-wracking decision for the president of Quality Sprinkling Systems Services in Cleveland.
"There was a lot of rumbling – we haven't had pay raises for three years," he says.
Newlin never cut pay either, even in tough times. He reduced some employees' hours, which ultimately meant they were taking home a smaller paycheck, but for morale purposes he maintained the company's hourly wage. "I guess I'm the only one who took a pay cut," he says.
This year was time to give employees a motivational boost in the form of a 3 percent raise. "It worked out – our business picked up considerably this year," Newlin says of 2011 performance, and how the firm has increased its customer base by 10 percent in recent years. In fact, he hired another service technician to help with the company's expanding lawn healthcare division.
Newlin says revenues have been flat, but with more customers on the docket and further potential to grow, he's optimistic about the coming year. "Even though it was a wet year, we did very well, and I attribute a lot of that to the fact that a lot of other contractors have cut back so much that they let go of service technicians, office personnel or closed their doors," he says. In other words, companies that are still standing strong can eat up some of the business left by failing firms.
Also, talented people are looking for jobs. Mickey Strauss, president, MSM Landscape Services, Sylmar and Ontario, Calif., says there's a steady flow of job applications coming into his business. As a start-up, Strauss says his pay rate is solid and he's not having trouble finding top talent. "We have no trouble finding inside and outside people, and we are not paying a premium for it," says the 50-year industry veteran. He notes that the pay rate now is actually less than when he owned a $60-million firm with 900 employees, American Landscape, which he previously sold.
In southwest Florida where Blake Crawford is CEO of Crawford Landscaping in Naples, paying more than competitors for labor assures he will attract a quality team member. He communicates to customers that his employees are a reflection of how the company values its customers – services cost more, but you get what you pay for. "We want to have the kind of reputation in the marketplace where you go to work at Crawford Landscaping, and we are going to demand a lot, but we are also going to pay for it," Crawford says.
In Pennsylvania, where Earth, Turf & Wood is based, Jarod Hynson also shoots to be at the upper end of the pay scale. As a result, his turnover is low, which he also attributes to higher unemployment rates. "Jobs are a little harder to come by, so I think employees aren't as quick to transition from one place to another," he says.
As for budgeting labor, Crawford focuses on the details, budgeting by days of work per month. "We turn out what our labor rate is per person and we multiply that by the days in the month," he says. And, the company factors in a 3-percent increase across the board. "That doesn't mean that everyone will get that raise, but we (figure it into the budget)." The last two years, giving this raise has not been possible.
By watching the numbers, Lee Buffington, has bumped Turf Tamer's productivity up 150 percent since 2008. "The baseline we use for productivity is dollars in revenue divided by direct hours paid," Buffington says of the northern Alabama-based firm's No. 1 benchmark for success.