Finding and keeping snow crews is a top challenge for snow removal businesses. In this post, I cover how to create a bonus program to end voluntary employee turnover on your snow crews.
Finding and keeping snow crews is a top challenge for snow removal businesses. 84% of businesses surveyed for the LMN Landscaping Industry Trends Report 2023 said they struggle to find and keep qualified labor. This post covers how to create a bonus program to end voluntary employee turnover on your snow crews.
Why Voluntary Employee Turnover Is a Challenge for Snow Companies
Seasonal businesses struggle with turnover. The seasonal nature of the snow and ice management business is no exception. Higher turnover stems from lower wages, fewer incentives and a high number of available jobs.
Voluntary snow crew turnover isn’t just inconvenient for snow removal business owners. It hurts crew leads, office staff and customers too.
Crew leads are left scrambling to hire and train new employees. The business faces impacts on quality, efficiency and safety as well as customer satisfaction.
An effective way to address the turnover challenge is to create a bonus system that not only attracts seasonal workers but keeps them engaged and committed for the long-term.
The Turnover Problem
Snow and ice management companies struggle with high crew turnover. And the seasonal nature of snow work makes it hard to keep people on staff from year to year. Many workers look for other work in summer.
That turnover interrupts operations. It also requires virtually constant recruiting and training, which carry a cost and burden for the company.
Bonuses as a Solution to Turnover
Bonuses are a game-changer for voluntary employee turnover at snow removal businesses. Bonuses both incentivize employees to stay and positively impact the company by contributing to:
- Improved safety: Bonuses inspire employees to feel invested in the company’s success, which makes them more likely to prioritize safety and avoid accidents and downtime.
- Better quality: Bonuses motivate staff to pay attention to detail and provide high-quality service to clients.
- Greater efficiency: Bonuses encourage employees to be more efficient, which reduces downtime and ensures each job is done right and well.
- Reduced turnover: Employees who see the potential for added income from a bonus and are more likely to stay on.
How to Create a Successful Employee Bonus Program for Your Snow Crew in 4 Steps
Here’s how a snow removal business can create an effective bonus program that both attracts and retains seasonal snow crew members.
1. Empower Employees as Entrepreneurs
To build a turnover-resistant snow and ice management team, start by creating a work environment where employees feel they’re working for themselves and for a team goal.
This means creating an environment where everyone feels heard, feels safe and can actively contribute to setting and contributing to company goals.
Three keys to empowering employees:
- Open communication: Encourage employees to voice their ideas and concerns. Make them feel heard and valued. Don’t penalize employees who speak up.
- Goal setting: Involve employees in setting company goals. When staff have a say in the direction of the company, they feel a stronger sense of ownership.
- Ownership mentality: Instill a sense of ownership in your employees. When they feel like they’re running their own business, they naturally become more engaged and invested in the company’s success.
2. Pay for Performance, Not Just Hours Worked
Incentivizing staff with bonuses tied to individual and company success is a powerful motivator. Set up a system where bonuses are part of employee pay and reflect performance not just hours logged. Paying only for hours worked penalizes your most productive employees — the very ones most likely to turn over.
Key ways to create a bonus system that pays for performance include:
- Link bonuses to sales goals: Have a clear sales goal and a specific percentage of sales dedicated to field wages. If crews exceed their production goals without overspending on wages (as a percentage of total revenue), give them a bonus.
- Shorten the reward timeline: Consider paying bonuses each month or a quarter, rather than once a year. This helps keep employees motivated and engaged all year long.
- Practice transparency: Make sure everyone understands the bonus program and how it works and can track their progress toward it. Transparency builds trust and creates motivation.
- Be inclusive: Make sure all employees — from shovelers to supervisors — earn bonuses. Being inclusive creates a sense of fairness and encourages everyone to contribute to the company’s success.
3. Use a Measurement System
To make your bonus system effective, use a measurement system that defines success, tracks it and encourages employees to go beyond the status quo.
Here’s how to do that:
- Tie measurement to bonuses: Clearly define the key performance indicators (KPIs) you use to evaluate employee performance. Make sure they directly align with the bonus system.
- Use tools: Consider using a software tool, like LMN, to easily identify top-performing employees and reward them. A tool makes the process of tracking performance easy. A tool, like LMN, also lets you access accurate, current spending data on sales and field wages so you know at any time whether you’re tracking to meet, beat or fall short of your sales goals.
4. Use a Business Management Software
A good landscape business management software simplifies creating and managing a bonus program. For example, LMN, North America’s most popular landscape business management software, makes measuring employee performance against sales goals easy.
LMN also makes developing crews and processes to run and grow your business simple, including creating and managing a bonus program to reduce turnover, virtually effortless. LMN lets snow removal companies do the following.
Create and Manage an Operating Budget
Having an operating budget makes planning for bonuses more manageable. By understanding your financials, you can effectively allocate resources to support your bonus system.
Your budget sets the basic expectations for the company:
- What you need to sell
- How many hours you have to complete the work
- Your overhead expense limits
- A plan for company profit.
When field, office and management staff pull together and beat the baseline expectations for sales and profit, everyone can share in the rewards.
Your operating budget outlines your plan for profit and, in turn, becomes a system to set up an effective bonus program.
Create a Budget-Based Pricing System
Use your budget to set profitable sales goals and an overhead recovery system to price your work. Your operating budget gives you the information you need to set up a profitable and effective bonus system.
Your budget in LMN lets you determine:
- What you need to sell
- How many labor hours you have to do the work (your productivity rate)
- What your equipment, material and subcontractor budgets are
- An overhead budget
- A target net profit
- A pricing system based on your budgeted overhead and net profit
Use your pricing system to price all work. This lets you ensure your pricing covers costs, overhead, profit and bonuses!
Know and Use Your Labor Ratio
LMN lets you determine the profitable field labor ratio needed to support sales goals and your bonus system. This keeps your bonus program financially sustainable.
Foremen who drive more production (sales) can be paid more. And when crews beat sales goals, what was overhead can be paid as bonuses without impacting profits.
LMN CEO explains how a bonus system doesn’t impact profit and how it works.
Access Job Costing and Crew Management
Job costing lets you see which jobs are on track to return a profit or not and correct course before you lose money. It also lets you track jobs costs by materials, equipment and labor to reduce wasteful spending. Money not wasted can go into crew bonuses.
Crew management tools let you reduce wasted drive time, maximize crew capacity and quickly and easily track labor hours to the minute — no paperwork, no guesswork. You can see crew productivity in real-time at a glance and reward performance.
By implementing a well-structured, measurable pay-for-performance bonus system snow removal companies can build a resilient and motivated team that sticks around and contributes to greater long-term success.