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  #11  
Old 06-27-2014, 12:40 PM
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Locqus Locqus is offline
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^^ Agree with you there. But new owner, new thought processes etc. If he thinks its time for a change..let it be so.
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  #12  
Old 06-27-2014, 12:59 PM
Joe Shooner Joe Shooner is offline
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I would suggest against making grand sweeping pronouncements or changes. Ideally, you'd like to get your people on board with the changes you want to make.

Perhaps you should start by addressing any client-facing issues first. For instance, if quality is suffering, that provides a good opportunity to say something like, "We charge 15% more than our competition, and the hourly wage we pay you is 15-20% higher than most companies in this market. In order to justify these numbers, we need to have quality and service that exceeds expectations." - and so forth. It allows you to bring up the wage issue in a way that shows that you and your clients are willing to pay more, but you expect more in return.

Likewise, if they expect 10 hours of overtime, that should come with the expectation of getting the job done well each week. Overtime implies that you are trying to provide a higher level of service, at some expense. That means that there is a reasonable expectation that the job will be done and the client will be happy. Your employees should understand that unless the goal is accomplished, it doesn't make sense for the company to pay that much overtime.

I'd just say, be calm and rational, and try to explain it all from the standpoint of trying to serve the customers. That way, if they disagree, they're essentially saying that they aren't concerned with the customers, and that could lead to a more serious discussion.
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  #13  
Old 06-27-2014, 02:17 PM
Mark Oomkes Mark Oomkes is online now
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I haven't read through anything but this post yet, but I am going to be harsh, maybe some of this has already been covered.

Quote:
Originally Posted by GatorGardener View Post
Here are some of the compensation related issues I'm dealing with that are absolutely killing our bottom line:
Maintenance crew foremen at $20 an hour pay (even though they don't have driver's licenses) Whose stupid idea was this?

Pay for a full day on all rain days even if they leave work at 10am. Whose stupid idea was this? Do your customers pay you for that time as well as the next day when the work actually gets done?

Many long term employees with 4-5 weeks vacation time a year. Not so bad if they have been around that long.

Guaranteed OT for all employees of 3 hrs a week in the winter and 10 hours a week in the summer. Whose stupid idea was this? Do your customers guarantee you that amount of work every week?
I'll read through some replies, but wow, you have some issues.
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  #14  
Old 06-27-2014, 02:26 PM
Mark Oomkes Mark Oomkes is online now
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Quote:
Originally Posted by GatorGardener View Post
New to the forum - checking to see if anyone has ideas on this problem:

I took over our family business last year (25 employees) and have realized that the majority of employees are badly spoiled. They were treated extremely well over the past 20+ years, given annual raises every single year without fail of between 50 cents and a dollar an hour each, and now accrue large quantities of PTO as well.

I'm all for treating employees well and compensating them more than the competition to ensure we have the best employees on our side. However, I've begun to try to correct some issues - like reducing guaranteed overtime of 10 hours a week to 2.5 hours a week for all employees, and I've encountered fierce resistance and attitudes, which is expected. The real problem though now is that the employees are the best compensated by far in our market but they perform quite poorly due to the bad morale related to the cutbacks of some of the perks they've had.

I'm not sure what to do to fix this issue except to entirely clean house, which is not ideal as I would lose a ton of valuable experience and knowledge of client accounts.

Here are some of the compensation related issues I'm dealing with that are absolutely killing our bottom line:
Maintenance crew foremen at $20 an hour pay (even though they don't have driver's licenses)
Pay for a full day on all rain days even if they leave work at 10am.
Many long term employees with 4-5 weeks vacation time a year.
Guaranteed OT for all employees of 3 hrs a week in the winter and 10 hours a week in the summer.

I had a senior foreman challenge me last week in front of the other employees when I changed one of these policies and I fired him, and am already feeling the loss of his experience. But I see no other option available unfortunately for these guys that feel like I'm screwing them by trying to turn around the company.
Specific numbers would be better, but I pointed out a couple comments why this change is necessary that some of you seem to have missed.

Quote:
Originally Posted by ztman View Post
You have to first put yourself in the shoes of the long time employees. They look at it as snot nose comes in the biz without paying his dues and wants to take bread off our table.

How do you know the OP has not been working along side them for a long time?

There may be a more efficient way to run the biz on paper, but if ,what you think are your over compensated employees giving push back, your going to kill the family gold egg laying goose.

He already said it his bottom line was shrinking.

If you feel the effects of loosing one employee, imagine if ten left.
Learn the biz and get to know the fellows before you go all corporate on them.

Again, how do you know he doesn't know the biz? You're assuming a lot.

They may be paid well, but you have to look at what return they are giving you, and what you would have to pay others, with the same output, to give you the same revenue.
Things are not the same as they were 10 years ago. Or 20 years ago. The profit margins that were available during that time frame made these things possible.

What I am assuming is that the older family members started it and didn't want to make any changes that would rock the boat and now gave\sold\whatever the business to someone who wants to make it work. That person sees the problems and that these perks can't be be afforded anymore. I could be wrong with my assumptions.

Guess we'll have to wait and see what the OP says.
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  #15  
Old 06-27-2014, 05:49 PM
crusty_crab80 crusty_crab80 is offline
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Quote:
Originally Posted by GatorGardener View Post
New to the forum - checking to see if anyone has ideas on this problem:

I took over our family business last year (25 employees) and have realized that the majority of employees are badly spoiled. They were treated extremely well over the past 20+ years, given annual raises every single year without fail of between 50 cents and a dollar an hour each, and now accrue large quantities of PTO as well.

I'm all for treating employees well and compensating them more than the competition to ensure we have the best employees on our side. However, I've begun to try to correct some issues - like reducing guaranteed overtime of 10 hours a week to 2.5 hours a week for all employees, and I've encountered fierce resistance and attitudes, which is expected. The real problem though now is that the employees are the best compensated by far in our market but they perform quite poorly due to the bad morale related to the cutbacks of some of the perks they've had.

I'm not sure what to do to fix this issue except to entirely clean house, which is not ideal as I would lose a ton of valuable experience and knowledge of client accounts.

Here are some of the compensation related issues I'm dealing with that are absolutely killing our bottom line:
Maintenance crew foremen at $20 an hour pay (even though they don't have driver's licenses)
Pay for a full day on all rain days even if they leave work at 10am.
Many long term employees with 4-5 weeks vacation time a year.
Guaranteed OT for all employees of 3 hrs a week in the winter and 10 hours a week in the summer.

I had a senior foreman challenge me last week in front of the other employees when I changed one of these policies and I fired him, and am already feeling the loss of his experience. But I see no other option available unfortunately for these guys that feel like I'm screwing them by trying to turn around the company.
Having come from a company that went under for very similar reasons as you are experiencing I can tell you right now you have a very long road ahead.

What happened to us; the largest full service landscape and maint. company in our town. The owner sold out due to old age after starting from one truck. The new guy took over and ran it just as the original owner did. He had a business background but this industry is different from the rest. After a few year the money was still coming in good, so the new guy bough out a few smaller competitors, bought out a few gravel pits, and a trucking outfit. This was all gradual but it was a lot of growth. The owner (lets call him Bob) liked getting things his way and was a terrible micromanager. He was also good at making promises to clients and then forgetting because he has 1 million things on his plate. Eventually, he hired on several middle managers to help with the running of the company and it was all separated into divisions.

However, he hired on family, friends and a few young useless college girls that had lots of cleavage.

Profit margins dropped and so did the work quality. Turnover was high because we couldn't exercise as much control. Then the economy tanked with the housing crash and the bailouts back in mid 2000s. Followed by a few slower years, followed by massive construction that killed business for our retail nursery location (~1.5 mil in sales down to 1 per season down to 750k)

Many of the supervisors that were salary, hardly showed up to work. All had NICE company trucks while the crews drove 25 year rigs from the original owner. Vehicles so ill maintained (due to lack of funds in the last few years) things would fall off on the highway. But...the management still all had their trucks, paychecks, constant time off, "borrowing" equipment without any notice to take for personal use.
The foremen made good hourly wage and most were worth it. But some weeks we had 30 hours O.T. other weeks they said no OT and people either quit or job quality went to hell.

Long story short, don't micromanage everything. Train your foremen or division manager and just tell them what you want done. Then meet and review progress.

Pay your bills and your people before you start buying ridiculous equipment or property, etc.

Your equipment makes you or breaks you. Don't let it go to crap because when you sell it will be worthless.

Don't hire friends and family. Not unless you are sure they will be a great asset for your company. People are welcome to disagree here, but I will not hire friends or family. When things go sour, feelings get hurt and I don't want drama. Its just not worth it. Plus they feel like they deserve special treatment.

Pay your people what they are worth, and dig deep through all the piles of b.s. to find the foreman that is there with his heart and soul instead of just for a paycheck $$$.

List goes on and on, but as far as your problems;

Most people in this thread say "NOT to mess with what you have and your family knew what they were doing. This is exactly how you lose everyone and go under", "Like a few pots have said, they built it with these systems in place so it worked at one point"

But I would have to disagree. What worked 10 or even 5 years ago is no longer the latest and greatest. Technology changes so you have to be able to adapt. If you don't the mom and pops will outgrow you because they offer what the customer wants. The customer is the bottom line. For example; I take payment over the phone, with my phone or by email. I track where trucks are. I will soon have truck mounted cameras so I can see half the job cite with a click of a mouse. That was not available 10 years ago.

Tackle the overtime issue head on. At our old place when the hammer on OT fell some people walked. I just explained to my guys that its because company is going broke (which was obvious to just about everyone). When you lay it out plain and simple people listen and dint fight back. The bossman didn't want to deliver the bad news, he just told us to do it. So lay it out, "the company is loosing money, and we have to make these cuts in order to survive. If we don't in 6 months or a year there will be no work for anyone". That should get peoples attentions.

As far as firing the senior foreman that spoke up against you, that was good. Hopefully everyone was there to see it. Bottom line is you are still the bossman. If an employee or foreman has an issue, they talk about it with you at a good time. What he did was disrespectful, and it undermined you. That sets an example for everyone else to follow. I make bad decisions, and so did my old boss "Bob". We need employees and others to point these things out, but it has to be addressed professionally and at a different time. No arguing in front of employees and customers about policies. That is is final. And if they (or the foreman) that you fired feel so strongly about OT they either have to earn it, or they would have left anyway to get OT at your competitors.

As my previous company learned quickly, letting go of several individuals quickly got the attention of everyone. Even the 16 year old watering staff hustled. After a few weeks, about 2 or 3 of the foremen were back. They realized they didn't like the competition, and it didn't pay a damn. Upon return they were a valuable asset with a complete attitude change. However, if you do fire try to learn as much as you can before, or have someone in mind for the position. Perhaps bring back some of your family to fill in the knowledge gap for a while. It sounds like you said "entirely clean house" just try to do it in steps. I wouldn't try to replace more that 30% of your workforce at one time. But yes, clean house you MUST.

Lastly, benefits;
We had two. Paychecks were the benefits. Second benefit was saving lots of money on a gym membership. OT always has and always will be earned by those that deserve it. Slackers just drag feet on Fridays and Saturdays (we worked 4x10s usually) so why pay them OT?

We never had any guaranteed OT. That seems silly do your customers guarantee you work? Does the customer pay 1.5x wages for when you mow after you've hit 40 hours? Hah

Vacation time? No foreman had that. Ever. I guess that must be for your salary people. I know in other industries hourly workers get vacation, but I don't know of any landscaping/lawn company in Alaska that does that for their entry level employees. Management and supervisory staff MAYBE. Usually not.

"Pay for a full day on all rain days even if they leave work at 10am."
What....???
Why would they leave on a rain day? Tell them to bring a rain suite. They can wash equipment, clean offices, fix broken things. Rain days are optional, but if you want pay, then you have to work. Unless, we get rained out from a job...then we give whatever time worked plus 2 or 4 hours (depending on company I've worked for) and only strait time. This is just an understating employees must have. Rain happens, this is an outdoor industry. Their gas is covered so all is well. The time will be made up on a sat or sun.

I think i'll stop rambling here. You've got a tough road ahead of you. But clean house slowly and stick to your gut. I would tackle finding some new help, and "training and working" with what you have. Make sure people are on the same page as your for compensation. Tell them other companies dont offer squat. And if you offer that much OT, PTO and vacation let me know where you are so I can apply. lol
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  #16  
Old 06-27-2014, 09:06 PM
32vld 32vld is offline
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New to the forum - checking to see if anyone has ideas on this problem:

I took over our family business last year (25 employees) and have realized that the majority of employees are badly spoiled. They were treated extremely well over the past 20+ years, given annual raises every single year without fail of between 50 cents and a dollar an hour each, and now accrue large quantities of PTO as well.


Why did you take over the business?
Who ran the business before you and for how long?



I'm all for treating employees well and compensating them more than the competition to ensure we have the best employees on our side. However, I've begun to try to correct some issues - like reducing guaranteed overtime of 10 hours a week to 2.5 hours a week for all employees, and I've encountered fierce resistance and attitudes, which is expected. The real problem though now is that the employees are the best compensated by far in our market but they perform quite poorly due to the bad morale related to the cutbacks of some of the perks they've had.


Why are this issues for you and not issues for the past boss?


I'm not sure what to do to fix this issue except to entirely clean house, which is not ideal as I would lose a ton of valuable experience and knowledge of client accounts.

Here are some of the compensation related issues I'm dealing with that are absolutely killing our bottom line:
Maintenance crew foremen at $20 an hour pay (even though they don't have driver's licenses)
Pay for a full day on all rain days even if they leave work at 10am.
Many long term employees with 4-5 weeks vacation time a year.
Guaranteed OT for all employees of 3 hrs a week in the winter and 10 hours a week in the summer.


How was the bottom line before you took over?


I had a senior foreman challenge me last week in front of the other employees when I changed one of these policies and I fired him, and am already feeling the loss of his experience. But I see no other option available unfortunately for these guys that feel like I'm screwing them by trying to turn around the company.


It's not just changes that upset people it is even more how the changes are implemented.
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  #17  
Old 06-27-2014, 09:15 PM
GatorGardener GatorGardener is offline
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I'm impressed by the feedback - I have a laundry list of other questions I'll be asking on these forums eventually, it seems like you guys are a great resource to bounce ideas off of with some anonymity. I get how some of you may see me as a 'snot nosed kid' wanting to change everything, and that is ok as I don't really care what others think of me as long as my goals and objectives are achieved. My background is prob different from most on here - I'm a CPA and worked in the accounting field for a few years. I know business concepts well but have a lot of learning to do still when it comes to lawn maintenance and management. I worked every summer through high school and college with the business alongside many of the guys that now work for me. I appreciate their loyalty and past contributions to the company but I make business decisions objectively and have no problem letting them go if that is what I must do for the business to move forward.

I know it really is hard to give advice on a situation when there are so many factors involved that I will never be able to describe accurately on a forum - so I appreciate the attempts as they help me think it over better. It does seem like this culture and high compensation issue may just have to slowly be worked on over time.

To answer some questions - I've done some research and our total compensation is about 30-40% higher per employee than competitors in our area. I've already brought this issue up in meetings and briefings and told them that their work performance isn't 40% higher than the competition but my attempts so far to improve quality have fallen on deaf ears.

The current pay and benefit structure was perfect 10+ years ago when we were extremely profitable. But as my parents got older they became more hands off and just gave automatic annual raises to everyone so they didn't have to deal with turnover. For the 3 years before I took over my parents either broke even or lost money. I knew of their past success so decided to give up my career to bring the company back to that success and to exceed it. I read my comments from yesterday and do have to say things are not as dire as I made them seem. Since I started a year ago here we picked up a lot of clients and I changed some of our policies (we actually had 8 guaranteed OT for every employee a week in the winter and I cut it back to 2.5) and we are back to a 8% profit margin. I'm cautious though because we can lose a couple big jobs and be back in the red rapidly. Also now that I've made some of these cuts our quality is suffering - I'm getting a lot of the 'well you cut our OT so we will work slower' vibe and my account managers are telling me they are seeing a lot of guys milking time too.

I agree this is going to be a long journey. I'm confident it will be successful eventually I just want to get there in the most efficient way possible. Appreciate the tips!
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Last edited by GatorGardener; 06-27-2014 at 09:23 PM.
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  #18  
Old 06-27-2014, 09:34 PM
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94gt331 94gt331 is offline
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This is a good thread to read especially if you have a crew of employees. Good luck with your venture. Wish you the best! Lots of good advice here.
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  #19  
Old 06-27-2014, 09:38 PM
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94gt331 94gt331 is offline
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Quote:
Originally Posted by snomaha View Post
My thoughts also - what % are you dropping to the bottom line?

Don't envy you - changing a company culture is one of the tough ones. We use open book management and are very transparent with our team members. Aside from our general laborers, I want everyone to have a general knowledge of how $ flow through a business. This has helped with the notion that I fill up a truck full of $ every day.
Just curious on open book management? Does this mean you show all your team members the finances, bills, how much you make on each job, and what your costs, etc, etc are? I find that to be a interesting idea, especially in this buisiness where you need your guys to work hard to keep the bills paid on a day to day basis. This year I started being more open with the things going on in the buisness so they are in the know more, and that really helped alot with the employee morale, allways thought about opening the books to my team, just wasn't sure about that yet.
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  #20  
Old 06-28-2014, 07:11 AM
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Efficiency Efficiency is offline
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Quote:
Originally Posted by GatorGardener View Post
I appreciate their loyalty and past contributions to the company but I make business decisions objectively and have no problem letting them go if that is what I must do for the business to move forward.
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This strikes me as a cut off the nose to spite the face type comments. I used to be very black and white, my way or the hi way. I've mellowed out as time has passed and I'm a much better manager for it.

If their motivation is the issue, consider ding flat rate for the field staff. Then it's on managers to ensure quality.
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