Commission question

[Mikey P]

Got a new situation going on here and could use some ideas.


Both my lead guys will be on a commission. (20 with help, 30 by themselves)

How do I pay them when they need to work side by side on one job with the hourly worker there?


and keep everything at 30%?


Both will bitch if less than 20, especially if one feels they did more than the other grunt wise..

 

[Lee Stockwell]

When they are working together obviously both aren't "lead techs". You have one lead, and two helpers.

The labor % loss should be equaled by a productivity rise (it likely won't because someone will let off the gas").

Hopefully they can count.

 

[Brian H]

We split the commission. In your example, it would be 15% each.

Usually the jobs that require 2 leaders are very large jobs and they don't complain.

 

[Papa John]

At 20%each (40% Total) on 1 invoice might not leave enough meat on the bone for you and your expense once you add in Employment taxes n other "burdens"? as for one tech doing more work then the other-- Im sure they will manage THAT issue between themselves.

 

[hogjowl]

We split the commission. In your example, it would be 15% each.

Usually the jobs that require 2 leaders are very large jobs and they don't complain.

This is the only way any intelligent person would handle it.

Let them bitch.

 

[ronbeatty]

Paying Commission is always a challenge, because the average worker will always be less concerned about the quality of their work than the money they can make quickly and go home. Does Stanley or Coit ring a bell.

 

[Nate The Great]

2 sets of boxing gloves..... May the best man win..... I'd split 30% and hourly the other workers.... It doesn't seem to be an everyday thing...

 

[tracywalker]

Do those of you who pay commission also have an hourly rate of pay for days that might be slow, but you need things done like cleaning up the shop? washing the van? Help carrying rugs? Mowing my grass? Or is that just written in as part of their duties as a lead tech?

 

[Mikey P]

Yes, commision or twenty an hour, which ever is greater.

 

[Bryan S. Bennett]

That seems like a logistical nightmare....

 

[Mike Draper]

If they are working efficiently I imagine 15% should be in the 35-40 dollar range for each guy per hour of work. I think thats more than fair even in Cali.

 

[Bryan S. Bennett]

That seems like a logistical nightmare....

I tug at this split to be honest.

I see it as a 5 Tier program to develop employees:

Tier 1 - Assistant Technician - Entry Level Hourly Pay, Grade 7-9 (Cost of Living Only Increase per year)
Tier 2 - Lead Technician Grade 10- Median Hourly Pay (Cost of Living Only Increase per year)
Tier 3 - Lead Technician Grade 11 - High Hourly Pay + Commission
Tier 4 - Lead Technician Grade 12 - Base Salary + Commission
Tier 5 - Lead Technician Grade 13 - High Base Salary + Commission + Profit Sharing

Thoughts.....

 

[clean image]

Bryan, What does the grade(s) stand for?

I like what you have so far...

The only possible addition , would be "extra sales" , commission.

-- What is the incentive for a tech to "pick up a shower" at end of day? Or what have you.

I also think,you need to have a guaranteed pay amount for your top guys. Some family guys are gonna need that, and would pefer guaranteed than high's and lows that a commission oriented structure may bring.

This also brings possible, additional labor cost if you have a slow week and still have to pay their guarantee.

Then you also have the employee pot(SFS) for attaboys and -reservices

 

[PrimaDonna]

Struggling with pay structure now too. Started tech off hourly, he wasn't able to "budget" with fluctuations of less than and more than 40 hour weeks. Needed to have a consistent amount to count on. So, we transitioned to salary, with the expectation of minimum 40 hours a week be put in. Fill the time doing the little things that need to get done when short 2-3 hours for the week. Handful of weeks over 40, many more than not at 40. He doesn't want to have to "find" stuff to fill the day and hit 40 hours. Would rather leave when he's done for the day and get to his personal stuff/family. I get that. Just had year review and likely going back to hourly or reduced salary based on average of 35 hours per week.

Our issue is that John/owner is the "lead" tech on the truck. While this tech has what it takes to be lead, its a tough gig to do solo as most jobs are large and multi service, and to stay on schedule it's a two man gig. Can't "pay" John and him both in a lead role (Owner's cut and then lead tech salary/commission). We aren't in a position to take John off the truck and add a second guy to be with our tech. I'd gladly pay well to have someone else be in charge of the day to day operations and be the lead and supervise another tech. This guy won't stick around if we can't move him up, but as I said, can't support that type of pay structure for him when John is on the truck too.

And, it's not as simple as taking John off the truck. We tried that once. Failed on many levels. And so I keep spinning on this hamster wheel.

 

[bob vawter]

Struggling with pay structure now too. Started tech off hourly, he wasn't able to "budget" with fluctuations of less than and more than 40 hour weeks. Needed to have a consistent amount to count on. So, we transitioned to salary, with the expectation of minimum 40 hours a week be put in. Fill the time doing the little things that need to get done when short 2-3 hours for the week. Handful of weeks over 40, many more than not at 40. He doesn't want to have to "find" stuff to fill the day and hit 40 hours. Would rather leave when he's done for the day and get to his personal stuff/family. I get that. Just had year review and likely going back to hourly or reduced salary based on average of 35 hours per week.

Our issue is that John/owner is the "lead" tech on the truck. While this tech has what it takes to be lead, its a tough gig to do solo as most jobs are large and multi service, and to stay on schedule it's a two man gig. Can't "pay" John and him both in a lead role (Owner's cut and then lead tech salary/commission). We aren't in a position to take John off the truck and add a second guy to be with our tech. I'd gladly pay well to have someone else be in charge of the day to day operations and be the lead and supervise another tech. This guy won't stick around if we can't move him up, but as I said, can't support that type of pay structure for him when John is on the truck too.

And, it's not as simple as taking John off the truck. We tried that once. Failed on many levels. And so I keep spinning on this hamster wheel.

chit sweetheart....if this was easy...
everybody would be doin' it....

wait a minute they are!!!

 

[Ron K]

Struggling with pay structure now too. Started tech off hourly, he wasn't able to "budget" with fluctuations of less than and more than 40 hour weeks. Needed to have a consistent amount to count on. So, we transitioned to salary, with the expectation of minimum 40 hours a week be put in. Fill the time doing the little things that need to get done when short 2-3 hours for the week. Handful of weeks over 40, many more than not at 40. He doesn't want to have to "find" stuff to fill the day and hit 40 hours. Would rather leave when he's done for the day and get to his personal stuff/family. I get that. Just had year review and likely going back to hourly or reduced salary based on average of 35 hours per week.

Our issue is that John/owner is the "lead" tech on the truck. While this tech has what it takes to be lead, its a tough gig to do solo as most jobs are large and multi service, and to stay on schedule it's a two man gig. Can't "pay" John and him both in a lead role (Owner's cut and then lead tech salary/commission). We aren't in a position to take John off the truck and add a second guy to be with our tech. I'd gladly pay well to have someone else be in charge of the day to day operations and be the lead and supervise another tech. This guy won't stick around if we can't move him up, but as I said, can't support that type of pay structure for him when John is on the truck too.

And, it's not as simple as taking John off the truck. We tried that once. Failed on many levels. And so I keep spinning on this hamster wheel.

Meg
Can you set up your business to ad two other people because it sounds like thats what you need.
Your owner/John needs help no matter what. He is the cash cow, you can't buy another one, he will be able to function better and longer with help, even temp help, for the really busy days. Your present guy I would set-up on a second truck with a pay structure and job/work assignment that suits his present talent and skill level with enough carrot so he can see a future. Or you might set-up like the blue man group with two trucks at one job. If you do figure this out, because you are smarter then me, please do tell. I bet this is the biggest problem 1 1/2 Truckers have.

 

[Lee Stockwell]

Ah the old "indispensable owner-operator" tale.

Get him a helper ASAP...because Mr 35 and go home is already raising red flags.

 

[Ron K]

I tug at this split to be honest.

I see it as a 5 Tier program to develop employees:

Tier 1 - Assistant Technician - Entry Level Hourly Pay, Grade 7-9 (Cost of Living Only Increase per year)
Tier 2 - Lead Technician Grade 10- Median Hourly Pay (Cost of Living Only Increase per year)
Tier 3 - Lead Technician Grade 11 - High Hourly Pay + Commission
Tier 4 - Lead Technician Grade 12 - Base Salary + Commission
Tier 5 - Lead Technician Grade 13 - High Base Salary + Commission + Profit Sharing

Thoughts.....

Makes sense to us. The only thing we are wrestling with is instead of commission why not real high salary when working not so high when not producing? Have a Base salary and a higher base when making you a profit. Kind of like profit sharing but not to commission based to invite sloppy or hurried work.

 

[rjwood]

Offer both of them their jobs if they complain. Provided you're a fair employer who is flexible for your employees, I see no reason why you should not be allowed to expect the same in return at times. But don't abuse it.

ETA: Alternate lead roles for them.

 

[rjwood]

Struggling with pay structure now too. Started tech off hourly, he wasn't able to "budget" with fluctuations of less than and more than 40 hour weeks. Needed to have a consistent amount to count on. So, we transitioned to salary, with the expectation of minimum 40 hours a week be put in. Fill the time doing the little things that need to get done when short 2-3 hours for the week. Handful of weeks over 40, many more than not at 40. He doesn't want to have to "find" stuff to fill the day and hit 40 hours. Would rather leave when he's done for the day and get to his personal stuff/family. I get that. Just had year review and likely going back to hourly or reduced salary based on average of 35 hours per week.

Our issue is that John/owner is the "lead" tech on the truck. While this tech has what it takes to be lead, its a tough gig to do solo as most jobs are large and multi service, and to stay on schedule it's a two man gig. Can't "pay" John and him both in a lead role (Owner's cut and then lead tech salary/commission). We aren't in a position to take John off the truck and add a second guy to be with our tech. I'd gladly pay well to have someone else be in charge of the day to day operations and be the lead and supervise another tech. This guy won't stick around if we can't move him up, but as I said, can't support that type of pay structure for him when John is on the truck too.

And, it's not as simple as taking John off the truck. We tried that once. Failed on many levels. And so I keep spinning on this hamster wheel.

Is John willing to alternate lead with the employee?

 

[ronbeatty]

Meg, It is not a good idea to alternate lead, John is owner and if this employee is not able to budget his time or money it is time for him to accept your terms of employment or find a new job. Do not let your employees set your compensation or work hours, that is a function of the owner.

 

[rjwood]

Just think about how much confidence, recognition and general good will the employee will feel and see if he is allowed to lead with the owner of the company.
If he is indeed good enough to perform in that capacity, why not find a way to give him what he wants, and, obviously needs?

The owner will also have the opportunity to observe his performance as a lead, while also helping him learn temperance within the role. Who knows, perhaps the owner can use a bit of humility.

It's win/win to my mind.

 

[Mikey P]

John is not NEEDED in the truck anymore.


I haven't been on since xmas and all is well.

 

[Bryan S. Bennett]

John is not NEEDED in the truck anymore.


I haven been on since xmas and all is well.

I have to agree I have been off the truck for the better part of a year now.

On rare occasion I will go out and help out on the bigger jobs but what I have found is that the guys are more than capable of doing the work and pleasing the customer.

As an entrepreneur and building a business from the ground up it's sometimes hard to realize that there comes a point in time when you need to build the team, if you want to grow.

Just like a mother bird you eventually have to push the babies out of the nest so they can grow too and learn how to fly themselves.

They will fail too just like I did (hopefully not as many times) but in the end they will learn a great deal.

Today I am more focused at running the business, increasing sales and marketing opportunities and setting up SOP systems for our business to operate more smoothly.

The guys tell me not to worry about it they got it covered!

So Meg, consider letting go and find/hire a good Assistant Tech while John focuses on helping you get the business lined up for the next truck or to run a 2nd crew for evening work with the existing truckmount,
if that's your business plan. You could develop a high end commercial cleaning business that works from 6 to 10 pm Monday through Thursday. Tadaaah!

 

[Shane Deubell]

"high end commercial cleaning business".

Talk about an oxymoron!

 

[PrimaDonna]

Is John willing to alternate lead with the employee?

And how would that work pay structure wise. He takes his owner distribution no matter what. If he isn't out 'producing" for the business, I cant sustain his owner cut and a lead tech salary structure.

He's willing, but old habits are hard to break. Customers know John is the owner. They want to deal and talk with him. Once he gets on a role and his mo jo is going, there is no reeling him in to have who ever he is working with take the lead. We've evem tried having him stay in the van the first 15 minutes so the tech starts off with the customer and can initaate the lead role. Tried private "signals" from the tech to let John know he needs to bow out and turn it back over to the tech. Just doesn't happen. He steps in the house and it's all over. LOL

We've tried many different structures over the years. John has to be "all in" on the truck , or all out. No other fit for him elsewhere in the business. We've tried. The truck and with the customers is where he shines. Not busy enough, YET, to have two trucks going. Ideally if I had our tech as a lead with an assistant and John on a truck solo or with a helper, that would be great. We just can't sustain that at this point.

 

[PrimaDonna]

John is not NEEDED in the truck anymore.
I haven been on since xmas and all is well.

I agree.

But this is all he knows. What he loves. It's truly a part of his identity.

We took him off the truck last year for a few months and I swear it would have been the end of him he didn't get back on when he did.

 

[rjwood]

And how would that work pay structure wise. He takes his owner distribution no matter what. If he isn't out 'producing" for the business, I cant sustain his owner cut and a lead tech salary structure.

He's willing, but old habits are hard to break. Customers know John is the owner. They want to deal and talk with him. Once he gets on a role and his mo jo is going, there is no reeling him in to have who ever he is working with take the lead. We've evem tried having him stay in the van the first 15 minutes so the tech starts off with the customer and can initaate the lead role. Tried private "signals" from the tech to let John know he needs to bow out and turn it back over to the tech. Just doesn't happen. He steps in the house and it's all over. LOL

We've tried many different structures over the years. John has to be "all in" on the truck , or all out. No other fit for him elsewhere in the business. We've tried. The truck and with the customers is where he shines. Not busy enough, YET, to have two trucks going. Ideally if I had our tech as a lead with an assistant and John on a truck solo or with a helper, that would be great. We just can't sustain that at this point.

If the timing isn't right, then the timing isn't right. Not much you can do other than wait. Kudos to you for all the imaginative ideas you've tried.

 

[rick imby]

Good leads are hard to find and keep. If you cannot afford to invest in the equipment and marketing to get the second lead on his own truck you both are going to have to live with him as an assistant.

The luxury of having a good lead as John's assistant may not last. He may become disillusioned with the job or get a better offer.

Maybe cut Johns days to 4 per week and have your #2 lead two days a week and a night or two.

 

[The Great Oz]

"high end commercial cleaning business".
Talk about an oxymoron!

Law firms, executive offices, designer stores, pricey restaurants... these are the people that will never look to Cintas to clean in their spaces and will pay far more than average prices. Call it somethng else if you like, but I consider this high-end commercial. It's our commercial target.