Employees Happy, Relatives Latch On

January 21, 2008
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Steven B. Andrade sits at his office desk in San Diego, Calif. The president of A.O. Reed & Co. said he expects a lot from his employees, but he also tries to “treat each fairly and pay each well.” Andrade also said he gives each freedom because “I don’t want to baby-sit.” (Photo by Casey Dean.)

SAN DIEGO, Calif. - You know you have a great place to work when:

• Retired employees are more than willing to cook at their former company’s Christmas party. (That’s saying plenty, especially since this means preparing a meal for approximately 500 guests.)

• Fathers, sons, and brothers all work for the company, plus in-laws, cousins, and other relatives.

• Thirty-five employees have been with the company 20 years or more. Nine have been employed 30 years or more, and one, project manager Paul Sorchy, has put in 38 years of service.

• The company’s medical and dental plans cover each employee and each family member at no cost, other than co-pays.

All of the above - and so much more - explains why A.O. Reed & Co. was selected as the West region winner in The NEWS’ 2007 Best Contractor to Work For contest. Everyone who works under president and CEO Steven B. Andrade cannot say enough about working for the 93-year-old contracting company.

“All our employees are treated like family, even though we are very large,” said Ed Blum, manager of special projects. “I have worked here 11 years, and it is the best company I have worked for.”

TRAINING, OPPORTUNITIES

There’s no argument from any of the 550-plus employees, both salaried and union. Go ahead and circumnavigate the company’s always-active grounds, or step into the confines of A.O. Reed’s various departments - from new construction to light commercial and service to the sheet metal and piping fabrication shops. Interview those present and running about. You will get nothing but glowing remarks.

“We have a ‘ma and pa shop’ feeling, with the performance of a Fortune 500 company,” is how maintenance sales manager Alex Page put it. “We focus on family and promote from within.”

Opportunities certainly do exist within the company, which predominantly deals in new construction. Training, for example, is as high on A.O. Reed’s “must-do” list, as is providing safety and health benefits, competitive salaries, and a comfortable, productive working environment. As service training coordinator, Blum said employees average 108 hours of training per year, including education at the union training center and classes run by vendors.

“They make it happen,” said 49-year-old service tech Doug Janway, who has been in the trade 30 years. “I went to Denver for a week for a Trane controls class. And they did not ask for my first born to do it!”

Installer Luke Meeker prepares to head off to another A.O. Reed construction project. “The biggest part I like about this job is waking up and knowing that the people you work with will help you in any way,” said the six-year employee, who also appreciates the opportunities presented to employees. Meeker is scheduled to move into a sales position early this year. (Photo by Casey Dean.)

In other words, ask and you just might receive it, be it training or an entirely new position. For example, Luke Meeker, an installer for six years, is moving into project sales this year. He wanted to move into such a spot several years ago, but even he admits, “I was too young then. Now they came to me and asked if I was still interested,” said the 26-year-old Meeker. “I never imagined to do that.”

It’s all about teamwork, said five-year service tech Jose Luis Duran. “That’s what is so different about this company,” said the 41-year-old employee. “People actually help each other here.”

“I’ve met more than one person here who has served his apprenticeship here and then went on to retire from here,” chimed in Janway. “There is loyalty.”

Andrade is at least partly responsible for such cohesiveness among employees. Andrade, who assumed the company presidency from his father, Ed, in 1991, said he abides by three management rules:

Joe Cabal puts together ductwork inside A.O. Reed’s sheet metal shop. The company’s 35-plus person shop custom fabricates all needed sheet metal and fittings and ships finished work to job sites ready to install. (Photo by Casey Dean.)

1. Expect a lot from employees.

2. Treat each employee fairly.

3. Pay them well.

After a few seconds of thought, he quickly added a fourth guideline: “freedom,” he said. “I’m a firm believer that autonomy makes people like their jobs, so I let people do what we hired them to do. … I don’t want to be a babysitter.”

Andrade, who begins his 35th year with the company, admitted he did not have such a management outlook early on as boss. He admitted to running a tight ship, with his hands firmly gripped to the controls. However, when his son Brendon was diagnosed with leukemia about 10 years ago, the boss found himself going to many doctor visits and being away from the office much more often than he liked.

“I discovered,” he said, “that I was surrounded by a ton of great people. I had to give up some of my power, if you will, but I found out that if you gave them freedom, they will perform. They kept impressing me with what they could and can do. It changed my philosophy.”

Employees Alex Page (left) and Dennis Dubert load up a pickup truck with some of A.O. Reed’s “famous” Christmas apples. Each year customers of the contracting business receive a bushel of apples to show the company’s appreciation. (Photo by Casey Dean.)

No one calls him Mr. Scrooge, that’s for sure - not when employees are provided excellent benefits and none-too-shabby compensation. Union members have both pensions and 401(a) plans, with contributions from the company. Union employees also receive their negotiated raises and are reviewed annually for a merit increase based upon training received, safety records, and customer feedback. Nonunion employees, on the other hand, have a 401(k) plan. The company’s medical and dental plans cover each employee, as well as each family member, at no cost other than co-pays. Yes, you read correctly.

“I get yelled at by my insurance guy each year,” said Andrade. “It [medical and dental plans] is a big attraction. It gets people to stay.” No wonder service tech Roger Shell, like most other A.O. Reed’s employees, provides service with a smile.

“The company changes all the time, keeping up with technology, but at the same time, not taking away benefits of yesterday, such as medical and dental, pension, and sufficient vacation time,” said Shell. “We, as service techs, are guaranteed our 40 hours or more work. … Our company makes sure we are fully staffed for the busy season and they also allow us to take time off during the busy season with a great scheduling system.”

Andrade knows his new business philosophy works. “If you have happy employees, they are going to make the company successful,” he said. If you need further proof, 2006 sales were $105 million. Total sales in 2007 were $120 million.

HOLIDAY FEAST: A.O. Reed employees feast at the company’s elaborate holiday party, held this past December. (Photo courtesy of Michele Ignacio, A.O. Reed & Co.)

CLAMORING TO GET IN

It’s no wonder employees try to get relatives to join the company’s ranks. Very many have been successful in doing so, too.

Andrade’s brother John is a project manager. The 28-year veteran and vice president of light commercial operations, Robin Callaway, works with his 23-year-old son Andrew (a detailer) and 48-year-old brother Todd (a field tech). There’s also 24-year veteran and department manager of the light commercial division, Chris Cosgrove, who works with his two brothers and worked with his father before he retired from the business.

“As far as families, we have about 20 that are father-son-brother blood relatives, plus tons of in-laws and cousins,” said Jaimi Lomas, general manager of the service division. “It’s actually a great thing.”

It’s been healthy, agreed Callaway. “It can really work if you have mutual respect for each other,” he said. “We are not just interested in our own career. We are family here. We have long-term friendships. There is an energy that develops when we click.”

Although many contracting firms shy away from hiring relatives and/or promoting from within, Andrade said he wouldn’t have it any other way.

“When I see second-generation employees, I have to smile,” he said. “I’ve heard tons of stuff against such practices, but it works for us.” However, just because a person is related to another employee, that doesn’t necessarily mean he or she is in like Flynn. As Andrade explained, “You [still] have to perform or you don’t stay.”

This is one reason why A.O. Reed still has a retail store. Although it’s only a part of the company’s overall sales, the store is basically a San Diego icon - including a moneymaker, hovering in, over, and around the $1 million level. Not many contracting firms operate a store where anyone can walk in and buy a furnace filter or a bathroom fixture. “Unbelievable goodwill comes from that store,” stressed Andrade. “They pay their own way.”

According to Stan Nosel, the store’s manager and a 30-year-plus company employee, “It’s part of what makes the company what it is: privately owned yet professional, and dedicated to taking care of its customers and its own people.”

At the holiday party, sheet metal division employees (pictured above) gather around for a group photo. (Photo courtesy of Michele Ignacio, A.O. Reed & Co.)

SIGN SAYS IT ALL

It’s the little things that count, and which ultimately keep employees reporting to work at 4777 Ruffner St. Sure, the pay and benefits are big attractions, but the compliments, surprise gifts, pats on the back, Christmas party, paid vacations, occasional free lunches provided by a manager, and so much more, are the things that seal the deal.

For instance, HVAC dispatcher Angela Guzman couldn’t get over the treatment she received after, sadly, both her father and grandmother passed away recently. Guzman, who started out in the accounting department seven years ago before taking on her current duties, said she was able to get away without any repercussions. “They have been great to me,” she said. “In turn, I try to work hard for them.”

It’s all about fairness, explained Lomas. “Not all companies would open up to a woman,” she said. “Our industry is seen as a business for good old boys. A.O. Reed & Co. proved that cliché wrong.”

Retired A.O. Reed employee Don Williams is all smiles preparing food at the annual holiday fiesta. (Photo courtesy of Michele Ignacio, A.O. Reed & Co.)

Even when co-workers argue, “we are arguing for the company’s best interest,” explained sheet metal shop superintendent Ed Locher, who has been a part of A.O. Reed for more than 33 years. “That’s from the top down. They insist on the highest quality, and they’re realistic about what it takes to get to that level of quality.”

One might say the reason people stay and business flourishes (A.O. Reed will celebrate its 100th year in business in 2014) can be found on a sign that sits on the front of the desk of Adam Vaczek, operations manager of the service division: “It’s not rocket science.”

Translation: Keep employees happy and business will flourish.

“A.O. Reed has been a great company because of the family-oriented environment, the respect and understanding of each tech’s life challenges, and assisting us in any way possible, professional or personal, in order to help us meet our future goals,” summarized service manager Martin Naranjo.

JUST THE FACTS:

CONTRACTOR: A.O. Reed & Co.

OWNER: President and CEO Steven B. Andrade

LOCATION: San Diego, Calif.

YEARS IN BUSINESS: 93

BULK OF MARKET: New construction, commercial and industrial

TOTAL SALES FOR 2007: $120 million

TOTAL EMPLOYEES: Approximately 550

TOTAL SERVICE TECHNICIANS AND INSTALLERS: 70-plus

AVERAGE HOURS EMPLOYEES SPEND IN TRAINING: 108

BENEFITS BEYOND MEDICAL/DENTAL INSURANCE: The company’s medical and dental plan covers the employee and their family members at no cost, other than co-pays. Union employees receive their negotiated raise and are reviewed annually for a merit increase based upon training received, safety record, and customer feedback. Union members have both pension and 401(a) plans, with contributions paid by the company. Nonunion employees have a 401(k) plan. Company also gives a company-wide, year-end Christmas party, where each employee gets a meal, take-home turkey, and gifts are presented. Service workers get a uniform to wear, including jacket. Techs are on-call only 2 to 3 weeks per year. Company offers training at the union center, classes run by vendors, and, when justified, do pay qualified employees to attend classes elsewhere, with all expenses paid by the company.

INDUSTRY ASSOCIATION & CONTRACTOR GROUP MEMBERS: Mechanical Contractors Association of America (MCAA); Sheet Metal and Air Conditioning Contractors’ National Association (SMACNA); American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE), National Environmental Balancing Bureau (NEBB), Building Owners and Managers Association (BOMA), and Better Business Bureau (BBB).

THE NEWS SELECTED THIS CONTRACTOR BECAUSE: As Ed Blum, manager of special projects, put it: “All of the employees are treated like family, even though we are very large.” Benefits offered by the company are plentiful, including medical and dental coverage for each and every employee free of charge - unheard of today. As long-time employee Roger Shell put it, “The company changes all of the time, keeping up with technology but, at the same time, not taking away benefits of yesterday, such as medical and dental, pension, and sufficient vacation time.” Then again, maybe employee Alex Page said it best of all: “We have a ma and pa shop feeling, with the performance of a Fortune 500 company. We focus on family and promote from within.”

Publication date: 01/21/2008

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