LMN presentation on "Growing Gretzkys" - how to hire and develop superstar employees in the landscape industry. Includes a 12 month overview of systems and tasks that would
7. Biggest Problem in Landscape Study after study proves it The biggest problem in the landscape industry is hiring and retaining great people Improve on this problem and you have an incredible competitive advantage
8. You Want This. Plan for Profit Pricing Systems Measurement Project Planning The Right People
12. Start With A Budget How many people do you have (worth keeping)? How many will you need? What skills/specialties do you have? What skills/specialties do you need? What can you afford?
13. Your Budget Plans … Your people and wages The hours you’ve planned The impact of overhead staff On productivity (office mgr, ops mgr, controller) On costs (designer, mechanic, delivery driver) On your prices Your ratio of field labor costs to sales
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15. Field Labor Ratio The % of sales spent on field labor wages Measures productivity Identifies your superstars Creates differentiation To create an environment where superstars develop, people need to get paid on productivity
16. Who Do You Hire? Average “Joe” Some experience, needs work OK interview Wants $20/hr Superstar “Scott" Worked for great company Looking for new opportunity, great interview Wants $25/hr
17. Let’s Assume… They’ll both work a 4 man crew… 1 lead hand - $18/hr 2 laborers - $15/hr Scott is 20% more productive than Joe
18. What Do They Actually Cost? Wage Savings: $10,000 Production Loss: $95,000
26. But Wait! Call Now And You’ll Get: Better trained staff Better quality Less demands on your time You have more time to develop the business Able to handle more responsibility
27. And We’ll Also Throw In…. Less warranty work Less mistakes, forgotten items Better paperwork Better at managing customers Improves professionalism, morale Good employees want to stay
38. Why Do You Hire At The Last Minute? When the season hits… Too busy to train or teach systems Won’t find out if they’re any good.. until they’re on the job Don’t know company values or culture Haven’t learned proper procedures (timekeeping, paperwork, vehicle maintenance) Too late to change course
39. Hiring If good people are your biggest bottleneck… …then what could be more worth your time than good hiring?
40. Hiring Process Advertise/post Pre-interview questions Book interviews Conduct interviews Select candidates (overhire?) Orient new employees
41. Posting Canada Job Bank Newspaper Agricultural stores/centers Facebook, Twitter, Website, LinkedIn Association website Trades magazines
43. Pre-Interview Send by email 50% won’t respond – good filter Read answers, pick from the best
44. Book Interview Professional – do at office, or even rent a conference room The best have several interviews – they are also interviewing you Go beyond standard questions Behavioral-type questions
45. Hiring Offer of employment 2 week working interview? 3 month probation period Offer of employment First day preparation letter Consider over-hiring?
46. Test them Out Small projects Shop organization Truck and Trailer setup Design meetings Build-test with intentional mistakes See how they handle them
47. Training, Training, Training Safety PPE, machines, accident investigation, construction orientation Systems Meetings, production planning, results reporting Maintenance, repair Yard inventory Truck/shop organization Hiring/firing Discipline, leadership
48. Training, Training, Training Paperwork Cost of lost/missing paperwork Waste, liability Budgeting training Slim margins Relationship of labor costs to sales Where the money actually gets spent The impact and true cost of mistakes
51. Implementing Systems Focus on improving your weakest areas If you are weak at production planning, don’t focus on sales. You will only make your problems worse!
52. Systems for Better Hiring Implement a Hiring and Orientation system Who hires and what’s the process? How are new employees oriented? How are new employees trained? How is training recorded?
53. Field Production Critical success factor: jobs completed on time and on budget What systems can help this?
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55. Value engineering – possible improvementsJob planners created from estimate and given to foremen Foremen take responsibility for managing: labor, equipment, materials
56. Field Production Systems Daily crew meetings on jobs – at breaks Fast meetings (aprx. 3 min) to discuss goals Surface problems/delays/waiting Record requirements during meeting Order/solve requirements daily Continuously solve problems
57. Reward Systems When employees are rewarded with just hourly pay, they have no incentive to improve. In fact… they might see increasing their productivity as costing them potential wages
58. Owners Are Paid By Performance ↑ productivity ↑ profits ↑ pay/rewards
60. Field Crew Incentives People don’t resist “change” – they simply resist change that they cannot see as a benefit Implement a reward system that demonstrates how crews will be rewarded for improving productivity
61. Health and Safety Systems Superstar employees are safe Are the trucks and sites properly equipped? Do the crews have enough training? Have the supervisors signed off on policies and responsibilities Is there zero tolerance for exceptions?
62. Health + Safety Supervisor Responsibilities Ensure all workers comply with act PPE (no exceptions) Advise employer and workers of hazards Provide written instructions Accident/near miss reporting
68. Truck and Shop Organization 5S Assign roles on each crew Inspect, inspect, inspect Hold supervisors accountable
69. Equipment Inspections + Maintenance How often do inspections occur? Document? What condition are tools being put away? Whose tools are whose? Tool/equipment sharing or check-out Where do repairs go? Record repairs + requests on paper/email
70. Supervisor Binder Time tracking forms Meeting agendas Daily meeting planner Toolbox safety meetings Equipment inspections Material ordering forms Health and safety forms
71. Continuous Improvement Solve problems Learn from mistakes Share with others Not perfect, just better 100 small improvements easier than 1 big How are you incenting?
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74. Career Development Systems In-field training Offsite training (online training) What’s their “path” to a successful career? Is it a career or a job? Seasonal layoffs? Benefits? Retirement? Success stories?
76. Better Productivity Good planning and preparation Beating/exceeding goals No mistakes/forgetting tools Properly equipped No returns for punchlist work No warranty work
78. Job To Install 40 Trees With Crew With Skid Steer + Auger attach + Opportunity Cost – 12 billable man days = $9600
79. Equipment Advantages More sales for less cost Increased sales per field hour Faster –more work done in season Safer More enjoyable for superstars More dependable Easier to manage with less supervision
85. Job Costing – Why bother? With it…. Without it….. Everybody becomes an entrepreneur Exceptional people are recognized and earn according to their true value Great people stay longer Materials are not wasted Waste elimination is natural Crews are unsure of goals Nobody keeps score – nobody wins No internal competition No basis for bonus programs or wage reviews Poor culture develops People work for a pay cheque
88. Things to Measure Sales to date Field Labor Ratio Estimated vs. Actual Sales $ per Field Labor Hour Warranty work # of implemented suggestions/improvements
89. Things to Measure - Safety Accidents/incidents Hazard reports Accident reports Training reports How are these measured/rewarded?
91. What Can You Correct Before Dec? Productivity rates Safety hazards, incidents, accidents People problems Crew leaders or crew members Equipment issues Problems, waste
92. Focus On Easy Solutions Give crews est. hours Organized shop + trucks Less time wasted Covered trailers Improve time + cost tracking Equipment maintenance More training Designated locations Systems to follow Better planning + prep Pre-job meetings Onsite meetings Checklists
94. Thinking Like Owners Company results are measured annually Companies don’t make money job-to-job When business is successful, owner makes more When business is not successful, owner makes less
95. Typical Employees Paid hourly Pay has no relation to performance Think owner will reap all rewards of hard work and productivity No system to measure performance No benchmarks for performance Work faster = less pay
99. Company Budget -> Crew Budget Break company budget down by crew Each crew can be evaluated by Field Labor Ratio Sales : Cost of Wages With a company/division ratio, you can pay for performance
100. Steps to Pay-For-Performance Calculate profitable field wages-to-sales ratio Communicate ratio to foreman If they can exceed production goals (sales), you can afford to increase their wages and maintain the profitable wages-to-sales ratio
102. Beating Your Sales Goals Shoot to beat your sales goal before end of year If you base your pricing on an overhead recovery system, then once your sales goals are hit, your overhead budget is now Paid What was overhead (20%?) is now Net Profit You can use a portion of the ‘saved’ overhead on sales beyond goal as bonus capital
103. Bonus for Performance Example Assume crew’s expected total annual wages = $125,000 (includes all hours for all crew staff) Divide total wages by labor ratio (e.g. 25%) to find production goal $125,000 divided by .25 = $500,000 $500,000 is the sales/production goal
105. Bonus for Performance Example Now assume the crew works hard and eliminates waste Non-billable hours are replaced with billable hours and productivity increases Crew hits sales goal of $500k in late Sept Crew finishes year with $700k in production
108. Bonus for Performance Example Your pricing system calculated overhead to be recovered at $500k Your crew hit $700k, beating their sales goal by $200k We can assume then that what would have been overhead on the extra $200k is now extra profit
109. Bonus for Performance Example If your overhead to sales ratio was 20%, you know you have 20% of $200k as bonus capital $200k x 20% = $40,000 You now have $40,000 in extra profitability to use as reward capital to bonus superstar performers
111. But Won’t Quality Suffer? Quality should not suffer – if the crews are doing warranty work, they are not getting any closer to hitting their production goal If they don’t hit their production goal, there is no money for bonus
114. The true cost of poor planning…. And how it impact their bottom line (wages). Then everyone speaks the same language
115. Training, Training, Training Budgeting training Health and safety training Paperwork and systems training Leadership training Culture, values training
116. Training, Training, Training Training and systems are the only way to create other people who can “clone” the owner You must take what’s in your head and put it in your people’s hands.
117. Terminating a Relationship You must be ready to terminate employees who are hurting company performance It’s hard, but its critical to business success Think of it as a professional sports team
118. Terminating a Relationship Paid too high for performance Taking up salary space Hurting top line Taking up ‘development’ space
The Landscape Management Network. Run a better landscape business for $99/month. For more information on how Dan uses his budget, watch the next video in this series, Price for Profit.
With your budget, you build a plan for profit that enablesyou to manage your company to success instead of trying to work your company to success.It starts with your Snow + Ice operating budget – your plan for profit.With a completed budget, you can create a pricing system that will calculate prices specifically for your company to ensure that you cover your job costs, your overhead costs and your profit. Next you can estimate your work using your pricing system. Your pricing system will make it clear which jobs are profitable and which aren’t. When the snow falls, your need to stay on top of production efficiency. Compare your budget numbers with your actual numbers to stay the course, or to make the right corrections at the right times.And most importantly, use your budget vs. actuals to show you exactly where you need to improve. What’s hurting your profits? Is it your employee productivity? Are you over-equipped or under-equipped? Are your overhead costs too high for your market? Are you sure your prices are covering all of your equipment and overhead costs? Whatever is holding your company back, you need to hunt down those reasons and eliminate them. A budget will not only surface where your problems exist, it can identify problems AS they happen instead of AFTER they happen.
The Landscape Management Network. Run a better landscape business for $99/month. For more information on how Dan uses his budget, watch the next video in this series, Price for Profit.
