Our industry faces significant labor challenges. Our average wages are less than other trades. We don’t attract enough good, young talent out of schools. Most companies are small businesses working without a plan, with no clearly articulated opportunities for advancement, and no formalized training. Many can only guarantee steady pay for 8 months a year and turnover is high. The work is hot, cold, wet, and dirty – sometimes all at once. It’s no wonder it’s hard to find people who want to commit their futures to our industry.
But every company has a choice. Most companies lie down and play victim to labor problems. A select few seize this opportunity to differentiate and improve. The labor problem can be an extremely powerful competitive advantage if you can turn an industry weakness into one of your company’s greatest strengths.
“If opportunity doesn’t knock, build a door.”
As a former landscape business owner, my company initially struggled with hiring and retaining good talent. During performance reviews, it became obvious that we lacked a ‘system’ for employees to envision how they fit in. We’d comment on things they did well and things they needed to improve upon. But right after the review came the questions that we didn’t have good answers for:
“When will I be re-evaluated?”
“What can I do to get to the next level?”
“What kind of pay range does this position make?”
“Where can I access training?”
There was motivation to improve but our company had no structure in place. We set to work creating a career ladder system that defined the opportunities available to staff and the criteria required to move up the ladder.
Following are the 5 steps required to implement a career ladder system for your business:
Step #1 – Define the Roles: Organize positions in your company in an opportunity tree. Even if you’ve never had formal positions, draw out what they would look like. If they’re not clear to you, imagine how your staff feels about future opportunities with your company. Make it look like a flowchart or an org chart – something that people can visualize. Use this for new and existing hires to illustrate the various opportunities available to them.
** Wages + positions are for illustrative purposes only.
Step #2 – Define Responsibilities for Each Role/Level: Clearly spell out the responsibilities owned by each role, i.e., Level B laborers must have X skills/training, Level A laborers will require X additional skills, etc. Put your company expectations in writing to give staff a clear roadmap to success. This will serve your staff and your company well. If there’s a cost to some of the training, ensure you articulate what training expenses will be covered (e.g., you’ll pay for the course, but not the time spent), and under what circumstances (e.g. you must successfully complete the course).
Step #3 –Set The Pay Grade For Each Role: Set fixed wage floors and ceilings at each role. Ceilings motivate employee development better than seniority. An A Level laborer should eventually hit a wage ceiling. In order to earn their next raise, it will be clear to them that they need to develop the skills necessary for the next role up the ladder. This is far more effective than raises based on tenure or, even worse, based on an ultimatum.
Step #4 – Align Your Goals: I believe strongly in employee incentives, especially at the foreman level. If we really want to inspire performance, we must create incentive systems that reward staff for achieving company goals. Keep your goals objective. Bonuses given without transparency for how they are calculated are forgotten faster than they are spent.
Objective goals are based on criteria like:
“To create a Destination Company®️ (that attracts and retains great employees) it’s critical to allow employees to have ownership in your company, of their roles, and in their day to day tasks. I call this Shared Leadership. It is as simple as letting employees set their own schedule (sequence of tasks) and can be more strategic such as involving them in setting up an incentive program and deciding on future direction. The more ownership they feel, the more pride they will have—and the more personal accountability they will display. When it feels like their company, they will fight to win!” Jeffrey Scott, author of Destination Company®️
Step #5 – Stick to It: You need regular feedback and reinforcement. Have a performance review at least once a year with written objectives and give your staff a copy. Only do wage reviews during scheduled performance reviews to avoid spontaneous requests for raises. Share information such as how the company is doing relative to the bonus or incentive goal(s). Discuss it in meetings and put a chart on the wall at the shop. Without regular reinforcement, this will be just another change that ‘didn’t work’.
Improve Hiring – Your opportunity tree diagram is a great tool when you’re hiring. Pull it out and show prospects the opportunities for growth in your company. You’ll excite the ‘right kinds’ of employees, and drive the ‘wrong kinds’ to find work at less serious companies.
Increase Motivation – Without an opportunity system, staff will lack drive and motivation. Visible opportunities, clear criteria, incentive systems and wage ceilings work together to provide strong incentives for improvement.
Build Culture – Raises and promotions are earned on objective criteria, not subjective feelings. Expectations (and results) are clear.
Provide Accountability – You’re putting the responsibility on your employees to develop themselves. You’ve provided the framework and now it’s up to your staff to take advantage of it.
Share Responsibility – Delegate work easier by making certain roles and responsibilities part of your opportunity criteria. Inspire others to sweat the small stuff, so you can focus on the big picture.
Maximize Profit – Worried about rising costs due to raises? Consider this: A raise of $1/hr costs about $12.00 a day after taxes, etc. If that employee is 10% more productive as a result of their training, your culture, their experience and attitude, they’ll add between $40 and $100 more revenue each day. That’s a great return on your $12.00 investment.
Defining the opportunities for your staff is not just an investment in your staff but an investment in a sustainable and consistently profitable business for you. Hiring key positions ‘off the street’ is like handing the keys to your business to a stranger. It’s how so many businesses get stuck making the same mistakes over and over again. It’s why so many owners have difficulty pulling themselves out of the day-to-day operations.
If you want better, more motivated staff, give them something to get motivated about. Hourly wages and random raises won’t cut it in this generation. Show your staff the opportunities available to them. Help them take on more responsibilities and more important roles. Build better staff, a better company, and turn an industry weakness into a competitive advantage all at once.
Mark Bradley is the CEO of LMN. Dedicated to transforming talented landscapers into profitable business owners, LMN provides the business management software and training owners need to grow. To learn more about how you can start transforming your business, FREE, with the LMN software platform, visit www.golmn.com. Interested in attending an LMN workshop? Visit golmn.com/workshops/ to register for a workshop near you.