Will your lawn or landscaping company be easier to run if you are able to keep your best employees longer? Our experience working with over four hundred owners of companies clearly show this to be a common belief. After all, new employees create a ton of special work including recruiting, hiring, onboarding and training. The ones that stick around become an asset and (you hope) make your company run more predictably.
Let’s begin our discussion with data on employee retention.
According to the Bureau of Labor Statistics, the median tenure of employees (across ALL industries and ALL employers) is 4.3 years. Use this as a benchmark as you think about retaining your employees. How do you compare? Are you keeping people longer than 4.3 years? Or do they always leave after a few days, weeks or months?
The facts on retention…
Employees tend to stay with employers when the economy is bad. They tend to leave when the economy is good. It’s that age old game called supply and demand economics. It’s a vicious cycle for landscapers. Here’s why:
The economy is ALWAYS good for landscapers in the Spring season. The economy tends to be bad for landscapers in the Winter season. Landscape employees tend to stay put (given the opportunity) in the winter. If they leave you, the Spring of the year is when turnover tends to be the highest. That’s the time of the year when seasonal employers in the field of construction are hiring like crazy in almost every economic cycle. It’s important for you to understand this cycle.
In conversation after conversation, we listen while landscape business OWNERS complain that landscaping employees are hard to find, hard to train and hard to keep. We get it. Since landscaping is hard work in the hot sun, many NEW landscaping employees quit after a few days, weeks or months. Turnover stinks!
These facts may not feel like your friend. But they are true.
Now that we acknowledge these facts, let’s look at a very simple plan lawn and landscape business owners can use to help keep better employees longer.
We call this our Reward and Retention System. Here’s the plan:
- Provide incentives for employee referrals.
- Reward loyalty with increasing benefits.
- Provide incentives for positive customer reviews.
These powerful tactics help you boost retention of your team. We doubt you get these out of the human resources books you have read. We doubt the employee recruiting agency shared these with you either. But…this stuff is pure gold for small employers!
Before we share these three powerful tactics, we’d like to give you a warning. Many landscaping business owners believe that if they set up a “bonus system” they will keep employees longer. They falsely believe that a “bonus system” will make employees work harder. Here’ what our experience has proven to us. Bonus systems are dangerous!
In fact, until you establish a simple reward and retention system, don’t goof up your business by trying to install a bonus system. They are hard to implement. They are even harder to sustain.
We will discuss the dangers of bonus systems in our next chapter. But just in case you don’t read the next chapter, we had to mention it here. You can thank me later for this advice!
1. Provide incentives for employee referrals
Finding employees is pretty hard work. It really takes time to post ads, conduct interviews, hire, onboard and train new employees. So anything you can do to keep really good employees with you longer is a very good thing.
We encourage you to establish an incentive plan that sounds and looks like this. You simply share this verbally and in writing with your current employees.
“We plan on growing this company. In order to grow we need to add a few good people to our team. Here’s our plan. We’d like to reward YOU with $200 cash if you will simply refer your friends, family members, or business associates to our company. If YOUR referral gets hired, we give you $100 after they start. If they are still with us in 90 days, we will give you another $100. We plan to add five (or whatever your number is) people. So we plan on giving out $1000. We’d like to fill the positions in the next 30 days. Will you help us? This could be the easiest money you ever make. You could stuff this in your pocket next week.”
Two positive things are happening here. First you’ve shared a problem and asked for help. This really does get employees working to help you. Second, you’ve offered to pay extra for the service. Most people like money. So, they tend to try to help.
Here’s an important point. Anything worth doing is worth doing poorly until you learn how to do it correctly. This incentive rarely works perfectly the first time you try it. Nor will it provide you every person you need every time you need the person. But…it does work. And…if you are willing to ask your team for help two, four or six times, I’ll bet that you will be giving out $100 incentive payments and solving your employee problem along the way.
Now listen. I used the example of $200 above. You could choose to use $500 or $50. Our experience has proven to us that the incentive should be shared over two payments…never one payment. That employee you just rewarded for the referral needs to help you retain the new employee for the first few months to earn the second half of the reward. Finally, the reward needs to be large enough to get your employee’s attention.
This is a simple idea that can be turned ON when you need employees. It can be turned OFF when you have a full staff.
2. Reward loyalty with increasing benefits
Employees tend to stay longer when their benefits get better. The word “benefits” can be confusing. Many contractors think “benefits” is defined by whether or not the company provides health insurance, a company sponsored retirement program and employee stock options. As we write this message, NONE of these are required benefits for small employers.
We know first-hand that providing benefits can give you an advantage in the marketplace. However, many companies with insanely generous and extremely expensive benefits have high turnover. Consider this simple series of benefits that add about 5% to an employer’s cost over a period of two decades.
- Provide the following six paid holidays for full time workers – New Years day, July 4th, Labor day, Thanksgiving day, Christmas Eve and Christmas day.
- Provide a week, (40 hours of paid vacation) after a full-time employee has stayed with you one year.
- Add another week of vacation pay after 3 years, 10 years and 20 years with your company.
- After one year of employment, offer all employees the opportunity to contribute to a retirement program such as an employer Simple IRA and you match up to 3% of their gross pay if they participate.
Remember, we have worked with over 400 lawn and landscape business owners. We see exactly what small employers are doing with their benefit programs to try to retain employees. We have clients who provide exactly NONE of the benefits listed above. Nada – zilch – nothing outside their hourly wages are paid by the employer. We also have clients who add additional benefits like company sponsored health insurance, accrued sick leave and even paid time off for employee birthdays. However, each of these employers still face turnover – no benefits or extraordinary benefits. Turnover is part of the job as an employer.
Our recommendation is to keep your benefits plan as simple as possible. And…increase the benefits you provide based on the employee sticking with you.
3. Provide incentives for positive customer reviews
If you want to keep better employees, you need to keep things interesting at your business. There’s nothing more important for your success than happy customers. Without happy customers, you are doomed. Your employees need to know this. They must always know that their ability to keep their job is tied to happy, paying customers.
In fact, employers need to remember that customer retention is even more important than employee retention. You can’t make payroll without happy, paying customers. Your success is almost guaranteed if you keep your customers happy and paying you promptly.
So EVERY TIME a customer says, “You guys did a great job”, you should train your team on the art of turning ANY positive comment into an online review, written testimonial or video interview. Your company will NEVER have too many positive reviews. Your need to promote your business will never end. We believe our industry really needs to improve in this area.
As we write this message, one company stands head and shoulders above all others in the world of Internet Search. That company is Google. Your ability to be found online is made possible by Google. Sure, there are lots of social media tools out there in cloudlandia, but Google dominates when people go online to search for stuff they need – like landscaping services.
Google rewards companies who play by their rules with better search results. The fastest and most powerful way to get found online is to have a growing number of POSITIVE online reviews from your real customers on Google. Positive Google reviews can make you a wealthy landscaper! No kidding…
Putting a value on a real customer review might be tricky. Who’s to say that an online Google review is more valuable than a written testimonial or video interview from a happy customer that is published on your company website? We are not sure.
But we do know this. If you create a simple reward that pays each member of your team $20 when the customer provides a positive testimonial, video interview or online review, you could ramp-up your marketing in a big way while you keep your team focused on keeping customers happy.
Think about it. What would the impact of 100 positive customer reviews be for your business? What if your company boasted 4.8 out of 5 stars on Google? What if you published 25 video interviews from past customers on your website for all prospects to see? How would your on-site sales process be impacted if you handed a prospective customer a small booklet with 50 written testimonials to read while you write out an estimate? Would your company become instantly more trustworthy? Would the perception of the value of your company’s services go up? You bet it will.
One last thing. What do you think will happen with your employees if they get engaged in the process of collecting positive reviews? I’ll tell you. They will have more respect for your organization. They will take more pride in their work. YES, they might get paid a little more as they collect these reviews. And…I’m betting you…you’ll tend to keep your better employees longer. That’s a good thing. Would you agree?
Stay energized about your company and your better employees will stay with you longer. What do you think? Will these simple systems work for you? Give them a try. Then let us know what you learn along the way.