Experienced business owners know their greatest asset is not the furniture, fixtures and equipment in the office. It’s not even the office building, the construction equipment or vehicles. The most important asset in any company is the staff. Unfortunately for us in the aquatic industry hiring and retaining staff has been a problem for decades and most certainly in this post-COVID industry. If you are starting a company up from scratch, this article can strengthen your effort. If you are an old-line company and well-established, a little review and retrospection never hurt anyone.
Let’s start with the employees themselves and their motivation. Not everyone has the same motivation for getting and holding a job. There is the child of the owner who feels pressured into assuming the reins of the company from dear old dad or mom. But for the rest of us, the motivation may be simply money or benefits like health care or to improve our lot in life. It may be security or the fear of being destitute. It could be the prestige of working at a particular job or for a particular company. And for some, it’s just plain busyness — they need something to do and the satisfaction work provides.
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Let’s look at the other side: Once a person is hired, why do they leave? Shooting from the hip our answer might be “for a better gig,” but is it really? After four decades in business, I have found the most common reason for leaving one employer for another is the lack of appreciation — either real or perceived. With typical costs running north of $100 thousand to train a skilled laborer or a professional to be a profitable employee for the company, how can we possibly afford to lose good people? How do we prevent that?
Here are some ideas that can help a company in our industry hire well and retain its workers:
Trainability – In hiring, look for prospects who can be trained. Perhaps they do not have the highest grade-point average or a diploma, but are they trainable? Better to have a learner than an experienced worker who is intransigent and unwilling to learn.
Background – Be diligent in reviewing the resumés of prospective employees. Do they hop from job to job? Do they have unexplained gaps in their background? For certain jobs, like comptroller or finance officer, do criminal background checks.
Inquiry – Ask the prospect why they left their previous employer or why they are wanting to change jobs. There are good reasons for doing so — and bad ones as well.
Incentive – You don’t have to pay top wages in your market, but you do need to incentivize through profit sharing, performance or sales bonuses. Employees need to know that if the company prospers, they will, too. Every person in the company is a salesman or saleswoman for the company. Every single one!
Flex-time – Be flexible with time so that employees can take care of family issues and personal business. Don’t be married to the time clock. Allow compensatory time off for necessary time away from work. Manage with finger-tip control and not an iron fist.
Training – Offer training and offer rewards for completing classes and for certifications earned. Pay the expenses for training.
Reward loyalty – Make longevity worthwhile. Offer more annual vacation time after five and 10 years, for example. Celebrate major anniversaries. Give out a gold watch or two.
Golden handcuffs – Offer retirement plans lucrative enough to make staying a logical decision. This is called the “golden handcuffs” principle. These can be simple plans like Simplified Employee Pension plans or SEPs, 401Ks, Employee Stock Ownership Plans (ESOP) or the like. Set up a vesting period of say, three years, after which the company matches employee contributions.
Appreciation – Make an effort to show appreciation for their work. Some people are more motivated by a slap on the back and a thank you than by money. Some want a title (vice president, supervisor, lead tech, etc.). Give away a vacation or two each year. Have a special parking spot for employee of the month. Brag on your employees (within earshot, if possible) wherever you go.
Share success – Practice team-building by allowing everyone in the company to share in its successes. Publish pictures of their work in trade magazines. Put up posters of their projects in the office and on the website. Have company picnics. Eat together at the office. Go out for Taco Tuesday as a group. Cater lunch to the jobsite near the completion. All these things build the bonds that keep workers on the team.
Let’s be clear here: Bonuses should be tied to performance, and everyone in the company should participate based on their contribution. A small check to an intern or ‘go-fer’ will be greatly appreciated. Of course, the top echelon will receive bigger checks.
Prudent owners set aside part of a company’s profit into a bonus pool. Monthly or quarterly, the bonus pool is distributed to the employees on an equitable basis based on each employee’s contribution to the effort. The basis for earning a bonus needs to be publicized to the staff. Do this thing or that thing, and you get rewarded. The basis for a bonus may be billable hours, projects sold, profitability of projects or similar quantifiable parameters. The employees quickly learn that hard work, especially efficient work, and long hours can result in a financial windfall. Slacking off will result in a smaller bonus. Peer pressure comes into play to maintain quality and quantity of output for everyone. In some companies, bonuses may match or exceed the employee’s base salary.
The best employees are usually homegrown. They are hired on as laborers, and eventually, they become foreman or superintendent. Recognize enthusiasm in young workers and encourage their participation in company functions and training programs. In this age when construction companies are competing for experienced superintendents or project managers or just plain stealing them, it bears looking within your own organization for talent. They are typically more loyal than outsiders.
Sit with new hires and develop in writing a “Plan of Growth” for each individual. Tell them you will be glad to pay them more if they can become worth more to the company, and then show them how to do that. Hold employee reviews from time to time to hold them accountable and check on their personal growth and also to show appreciation for their efforts.
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Business schools will tell you the first step in forming a business is to decide an exit strategy. How will you get out when it’s time? Will you just lock the doors, sell the desks and wish all your employees good luck, or will you have a plan set up well in advance to insure the sustainability of the company and jobs for those loyal employees?
If you are not leaving the business to your kids and grandkids, how about developing a plan of succession for your top employees? Should you decide to simply close your doors and sell out, it will likely turn out to be a fire sale or worse, a garage sale. No one will offer top dollar for used computers, used desks, worn carpet and a backhoe, but they will offer premium dollar for an ongoing business with customers, backlog and good will, and who better to sell to than your employees? Intense loyalty will result when employees know they are part of the succession plan.
Rarely do employees have the financial wherewithal to buy you out with cash. One method to overcome this obstacle is the leveraged buy-out. In a leveraged buy-out, you convey your shares of stock back to the company, and the company will pay you for those shares from company earnings over a period of years. It might be 10 or 15 years — with interest. This way, the new owners are not paying you out of their pockets but from the company earnings. To protect you from the new ownership team’s possible failure, there are ways to keep a lien on the company, stock until such time as the buy back is complete. If they fail, you either step back in or find a third-party buyer. You get fair value for your company and the new ownership group can later use the same tool to pass the company along. Do not undervalue the retention aspect of a future ownership interest!
Don’t be the myopic business owner who looks only to next week’s profit margin. Look farther down the road, and your employees will be more loyal and more productive. Everyone wins.
Calvin T. (Terry) Brannon, P.E. is a licensed professional engineer in more than 20 states and is Engineering Faculty Advisor and Instructor for PHTA and Genesis. He has been engaged in engineering for over 52 years and over 44 years in aquatic design. He founded his consult - ing engineering firm in 1977 and continues in retirement to design, write and teach engineering and construction courses in commercial and residential aquatics. He lives in Tyler, Texas, with his wife of 52 years, Cecilia Brannon.
This article first appeared in the August 2021 issue of AQUA Magazine — the top resource for retailers, builders and service pros in the pool and spa industry. Subscriptions to the print magazine are free to all industry professionals. Click here to subscribe.