Winter Strategies for Employee Retention
For us northern tier folks, the fall is a double-edged sword. We have seemingly unlimited demand to try to serve, and we all see the clock ticking on when the weather will freeze us up and shut us down. As a business owner, that can be super stressful. It is do or die time to stock up enough cash for the winter. Maybe even more stressful is trying to make sure your employees stay strong when temps start dipping below freezing, and you can satisfy all of the customers you have scheduled. There is nothing worse than leaving that money on the table because you are short-staffed down the stretch. We do a few things in our Minneapolis and Cincinnati-based businesses to fight off the winter doldrums.
So much of our attitude in life is based on what we expected to have happened vs. what transpires. If we have extremely high expectations and then find out something isn’t going to go as planned, it can be a massive/debilitating letdown. That’s why I try to set a shallow bar with my wife, one that I can step right over, and she can remain thrilled to be married to a small business owner. LOL. Joking aside (kind of), the same is true with the expectations we set for our employees. If we hire a crew and aren’t honest with them about the seasonal slowdowns we experience and the elements we will battle down the stretch, there is no way they will physically and mentally last in our jobs. They won’t save up enough. They won’t show up on the super cold days to chip ice chunks out of a gutter. They won’t be on your team come springtime. We can’t have that. The most important thing we can do as owners is transparent with them on our work’s ups and downs and elements down the stretch. That will ensure we hire the right folks to finish out the season strong and help us stock up our cash reserves for the winter.
Unemployment Insurance & Banking Hours
I get asked all the time about what we do with our guys in the winter. We are shut down from December through mid-March, weather dependent, so we have 3-4 months of downtime. We don’t do route work (margins lower than I want). We don’t do snow removal (hours and equipment not what I want). Everyone wants to know how our employees stay afloat over the winter and maintain them for the upcoming season. I’m not going to lie and say it’s not a challenge. Of course, it is. But we are always going to try to give ourselves the best shot at retention. We used to fight having guys go on Unemployment, knowing it was going to bite us in the butt down the road.
The truth of the matter is it’s not as debilitating as we thought it would be. We build it into our business plan and set our prices accordingly to cover the cost in the model. When we do have work in the winter (we’ll do some commercial stuff, some dryer vent cleaning, and some roof raking here and there), we offer it up to our tenured employees. They can choose to take the payment that week and reduce their unemployment check by a smidge, or they can bank the money for the spring, and we’ll pay it out in March once they come back. They get the choice and people like choices. This also goes back to point #1, which is that you need to set this expectation at the get-go. Our crew has never had any issues finding temp work over the holidays if they wanted it, and many like to use the time off as a teacher might use their summer time off. When we recruit team members, we sell it as a positive and look for people that would enjoy making $40-$50K in 8 months of the year, having their winter off on Unemployment (still making about half their normal pay), and doing their hobbies and family/holiday stuff without work getting in the way, when you pitch it like that it doesn’t sound so bad!
There are always a handful of folks that want to keep working in some way/shape/form and aren’t interested in the months off. Lucky for them, there are airplanes and plenty of other companies around the country that are short on employees. While your employee might not have the wherewithal or the resources to find other window cleaning companies with that capacity and need for a couple of added crew in the winter, we all generally have that ability. Jump on any Facebook thread or land yourself at the Huge Convention or IWCA event, and you’ll build plenty of relationships with other business owners that will surely have a capacity shortage in the winter. Send them to CA, AZ, FL, or any other southern state with snowbirds for your team members who want that work and are willing to travel for a week or two. It’s worth it for those other business owners to find some cheap lodging for your crew member. At the same time, they help them out, absolutely worth it for you to help your crew member get a paycheck and reduce your unemployment cost, and worth it for your crew member that wants to get some work done in the winter—literally a win-win-win. When we do this with our guys, we strategically don’t make money off of the deal. We let the other owner know the wages that we’d pay our guy, so our guy gets paid what he is used to for the work he completes, we pay the guy’s paycheck, and the other owner pays us back for that, and that owner covers the lodging and expenses while our guy is on site. It is much cheaper for them than subbing out work, and it’s a great way for us to all help each other out during the winter.
Strong Finish and Comeback Signing Bonuses
When all else fails, money. It’s no secret that people respond to incentives, so if you are having a hard time getting crew members to stay through the entire fall season or getting them to come back in the spring, consider some strong finish bonuses and/or some comeback bonuses. This year we are paying out a $1,500 bonus to any employee that makes it until the end of the season. That’s a pretty big carrot to dangle and might seem crazy, but last year I bet we left $100k of revenue on the table because we were short on employees throughout the fall. If we had 4 more guys, we could have easily gotten that $100k, and it would have cost us a whopping $6K of bonuses. I think you can see how that pays for itself. Of course, we pay that bonus out over time. If we hire a guy in August or September, he gets $100 after the first week of training, $100 after the second week, another $500 after he makes it a month out of training, and the final $800 after we lay him off for the winter.
So, it’s a nice big carrot, but it’s not getting paid out unless that team member is pulling their weight. If they aren’t cutting it and we elect to part ways with them, no bonus from there on out. If they decide the cold is more than they can bare then again, no bonus from there on out. The same strategy holds true for the spring. We will be offering a $1,500 comeback bonus paid out through the end of June. We know once July 4th hits, our workload slows down, so we structure the bonus to be a nice big carrot for everyone to push hard through that time and ensure we have enough people, and more importantly, the right type of people, on our crew to crush it.
Whether you employ any of these strategies or not, build the business you want to run and set the right expectations for both your team and yourself. Build a winter plan that you can enjoy operating, finish strong this fall, and be ready to crush it in the spring!
As always, don’t forget to head to our website and grab our free chart of accounts download and free target budget template so you can keep your financials dialed in and your profit margin maxed out.
Dan Platta – CEO – Blue Skies Services
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