How to fix a spoiled company culture?

Discussion in 'Business Operations' started by GatorGardener, Jun 27, 2014.

  1. whiffyspark

    whiffyspark LawnSite Fanatic
    Messages: 6,384

    If you cut their pay of course their going to leave.

    If you're boss decides to cut your hourly rate $5 an hour. You're telling me you're going to stay because the company is having "hard times". He'll no you aren't. It's not your problem. You worked hard for your money. Cutting someone's pay and asking them to stay is about the biggest punch in the face you can do to a working man

    YOU need to figure out you're over head and reevaluate your hourly rate. You simply cannot charge $30 when you have people making over 20. Plus payroll expenses, taxes, insurance etc. Common sense here
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  2. RoyalTree

    RoyalTree LawnSite Member
    Messages: 158

    Your employees are your biggest asset and your biggest expense. I definitely understand the need to evaluate your payroll situation. We also pay above what most if not all our competitors offers. This also means we expect more from our guys. Not only in productivity but also in customer care.

    I can only assume that these guys firing on all cylinders are probably worth the money they are making. The important part is to figure out how to get them optimized. There need to be performance reviews and thinning of the lazy and negative in the heard. Show your guys you believe in them. Lead them to a way they can help contribute more to the bottom line.

    Nobody wants to hear that they are the problem. If you show them how they can be the solution instead they will be much more receptive to getting behind you.
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  3. TTS

    TTS LawnSite Senior Member
    Messages: 615

    Have you run the numbers to see how you land with them on regular time? At $20/hr you will probably just break even with where you're at. Next question is how long can you sustain the business the way its going? If you can make it for a while small changes and a delicate touch can save you a few key employees and lots of headaches. If you are going under soon then you need to make drastic changes quickly to even have a chance. You will most likely be starting with an entirely new workforce at that point but it gives you a chance.

    What's your average tenure? Its not entirely uncommon to have higher level employees earning more than the billable rate as the cost can be offset by lower level employees earning substantially less. You need to look at total payroll costs compared to total billable hours. That model also requires a fair amount of turnover at the lower levels. As your average tenure creeps up your profit margin goes down.

    If the math works out for your situation leave current employees where they are and institute new pay scales for new employees.

    I agree with whiffy, if I've been here a while and you come cut my pay I'm gone no matter what you say to try to get me to stay.
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  4. AintNoFun

    AintNoFun LawnSite Bronze Member
    Messages: 1,807

    then let them go.. there will be NO COMPANY left anyway if they stick around and run it into bankruptcy.. I don't know of any other landscaper that is so generous with paid time off...

    I agree its not the employees fault, they didnt' say there compensation but my theory is you wanna get paid like the cream of the crop then rise to it.. if not ship out...

  5. 32vld

    32vld LawnSite Gold Member
    Messages: 3,983

    I want to feel for you. You make it too hard to do so at this time. When you are asked questions you give very short guarded answers as if trying to not give us the ammunition to call you on your short comings.

    You come across as you wanting to hear us to tell you that what you want to do is the way to go. Instead of doing what you need to do.

    You type from both sides of the keyboard. You want advice. You know better then anyone else.

    Your bill work out at equal to less then what you pay employees at the OT rate.

    Sounds as if your pricing is too low combined with giving guaranteed OT even when there is not OT work.

    What CPA?
    Don't need no stinkin' CPA to know that paying employees more an hour then you are billing is not going to work.

    If you spend anytime here reading other threads you will see Landscapers crying the blues that they can not afford to pay employees $12 hr and try to get away with paying straight time when they should be paying OT.

    That this industry does not allow them to pay $20 hr.

    I think most of your employees where to leave if you take away mandatory OT and full day pay and go home when it rains. They will find it very hard to get a new employer to come any where near what they would be making if they stayed with you when you take away the mandatory OT. You need to point this out to them.

    Time for a company meeting. Explain that the company can no longer afford to pay for mandatory OT. That they are wanted to stay though they are free to look elsewhere though without the needed changes the business will close so either way their jobs will be gone.

  6. PenningsLandscaping

    PenningsLandscaping LawnSite Bronze Member
    Messages: 1,853

    That... is insane. I understand you can only charge what your market will bare. Totally understandable, you won't bill out anything if you charge double your competition and can't land work.

    However, if that's what landscaping companies in your market are charging, then (I know you said this before) you're paying your employees huge amounts of money for what they do.

    You walked into a bad situation that you're trying to turn around. TPen has fantastic ideas, take what he says and run with it, because you need to turn morale around. But you need to understand, that what you're paying these guys is outrageously high.

    Your foreman that can't read or write english and has no driver's license, makes more than what some teachers in the south make with almost as much paid time off. You need to turn it around, and do whatever it takes, but those who won't get with the program? Drop them, because they're obviously clueless and entitled, because NO ONE is going to give them what they've been getting.

    What you've done so far is good, and a far cry from creating hardship for your employees. If they're milking time, not producing, ect, they're no longer good employees, they're dead weight.
  7. Kelly's Landscaping

    Kelly's Landscaping LawnSite Platinum Member
    Messages: 4,676

    I would be very careful about jumping into this.

    He has long term employees so they will come with kids and while you are not required to insure the spouse you would be required to insure each kid up to age 26.

    The tax credits are not clearly laid out as I couldn't find charts breaking down the credits.

    But what I did read was over 25 employees it gets phased out.

    It's based on hours so the share amount of overtime he has could be used to calculate and even higher number of base employees than he even has. Thus he may not qualify just off of that.

    It's based on pay averages and at 50,000 a year per employee it phases out. He has explained they are very over paid and it's quite possible they are over that threshold already. But even if they were not it will be prorated and the more they average the less the credit percentage. So you can disregard the 35% or 50% credit as it will likely in this case be less then 10%

    It works the same way for individuals for me over 46,000 a year and the credit is no more but thats not to say its worth having at 45,000 a year. To the contrary its a whole 10 dollars a month at that income bracket for me. Now you go the other way and say I put in I make 30,000 then I get a decent credit over $100 a month.

    Bottom line the same people wrote both parts of the law so you can bet the credit will be next to worthless for him in this case.
  8. Armsden&Son

    Armsden&Son LawnSite Silver Member
    Messages: 2,358


    Just saw something I would point out..

    You said that if the OP cuts their pay they will leave...

    From the sounds of it, if he cuts the pay 5 dollars an hour, they are still going to be getting paid more than any other company in the area...

    So, normally it's true that if an owner cuts pay and claims hard times, employees will walk.

    But even at a 5 dollar an hour pay cut, if these guys walk, sounds like it will turn into a 10 dollar paycut...

    Know what I mean?

    500 hours of PTO??????


    Sign me up!
  9. TPendagast

    TPendagast LawnSite Fanatic
    Messages: 10,338

    no i said get RID of the PTO and OT in exchange for the insurance.

    you can't figure in the OT and PTO as part of the insurance requirement if you aren't paying it out anymore.

    if they have wife and kids then the insurance might look more attractive,
    Like any individual, any company has to do the math and figure out the costs/benefits individually.

    when getting insurance, a single person that has kids and a wife isn't multiplied by x4.
    If the main person is 400 a month, for example.
    The whole family doesn't figure to 1600 per month.

    Its more like 1100 per month or less.

    lets take the $20 employee as an example,
    "Guaranteed" OT… so example 10 hours a week.
    What's he working (it sort of sounded like these people were year round employees?) 40 weeks a year?
    That's $12,000 per year in "guaranteed" over time paid out, not to mention pay roll matching like Fica, SS, Medicare, UI, and workers comp.
    so that could be more like $15,000-$16,000 for that ONE Employee.

    IF that employee isn't already hooked up on obummer care, he's going to pay around $400-$600 in tax penalties if he's uninsured. PLUS…he's uninsured.

    Now…if you do the standard 80/20 with the employee, at the silver special (waterer it is) at around say $1100 a month
    you have to pay $880 a month, that's $10560.00
    NOT 10,560 Plus medicare, plus UI, plus anything.
    the employee pays 2640 for the whole year.
    Factor in things like the $400 penalty he's not paying, so it's really only $2200 he pays, the fact that he actually DOES have insurance now, AND the fact that his actual pay is lower (due to not free OT) and his tax liability is less and he's likely to even get a larger return…

    And he's really only down $100 a month or less when it all comes out in the wash.

    $100/mo for insurance for a family? YES PLEASE!

    Companies with that any employees will ALSO get better rates as a whole rather than individuals so those numbers MIGHT be lower too!

    Right now at $16k for OT and 5 weeks of PTO and another $5000 plus there.
    Each guys "current benefits package" is costing the company 20k.

    REPLACING it with Obummer insurance could come out to a 50% SAVINGS…. maybe it will, maybe it won't.
    BUT it's something that SHOULD be looked into.
    Because it's an OPTION that needs to be explored.

    Can't just cart blanche cancel everything, there has to be some give an take.

    OT and PTO need to go
    Insurance is something everyone needs anyway, plus you can get your own insurance through the company plan too.

    Regardless of what people think of Obummer, his medical plan is a game changer and we need to explore how we can, if any way at all is possible, to capitalize on that game changer.

    and Kelly's, really man?
    you have NO employees…how are you qualified to comment on something you have ZERO experience on??
  10. TPendagast

    TPendagast LawnSite Fanatic
    Messages: 10,338

    IF the OP does nothing.
    His company sinks and dies.

    IF the OP cancels the 'handouts' his experienced employees are used to.
    They quit in protest.
    His company sinks and dies.

    IF the OP takes on the insurance, AND it works out to save money, gives him control of the company back….sure SOME employees might quit.
    But not all of them.
    The OP can ALSO blame it all on some fictitious Big-eared Devil in the white house.

    "the big bad government is forcing us to make these changes"
    "we HAVE to get insurance, it's governments fault"
    "we cannot afford everything AND insurance"
    "this is how the changes are going to go down"

    Then do a lot of PR and help the employees see the bright side of the changes.

    Personally, If it were me, I'd bring in a consultant and an insurance broker to explore the options with the intent of making the changes before september.

    then use the consultant and the insurance broker to explain the benefits of the change, and play the role of the "helpless" business owner who's at the mercy of that big eared tyrant.

    Bing Bang Boom.


    If the consultant and insurance broker CANT make the numbers work/pencil out…then you wasted some money on the consultant.

    Nothing compared to what you're already blowing on each employee on inflated benefits.

    for consultants I would recommend : Tony Bass, Vanderkooi, or Wilson Oyler….. I would be willing to help out personally, but Im actually already booked for the season, and I think you really need to make the changes before winter, or at the very least, explore them.

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