Are you paying your employees enough? Are you paying them too much?
Heating, Air-conditioning & Refrigeration Distributors International (HARDI) has the answers.
Every two years, HARDI offers an employee compensation survey designed to determine where individual wholesalers’ compensation plans stand within the distribution industry. Participating members answer survey questions regarding 25 individual salaries by position, government-mandated health benefits, leave benefits, and more.
The 2018 version of HARDI’s compensation survey officially opens in early February and will close in late March. Previously available to HARDI members via a fee, the compensation survey is now included as part of HARDI’s annual dues, though members must complete the survey to receive a copy of the report.
“It’s tough to find people to fill positions in this environment,” said Brian
Loftus, market research and benchmarking analyst, HARDI. “Turnover is expensive and disruptive. Service suffers when companies are understaffed and becomes even more expensive when management must take time to fill positions. This survey provides industry-specific data to help you appropriately staff your distribution business.”
The data in the compensation survey is grouped by region. Historically, more than 100 regions have been represented in the survey, though that number correlates directly to the number of participants.
Two sets of data are presented. The first represents the HVACR wholesaler market, which offers pertinent salaries on specific job titles, employer benefits, and more all categorized by business size based on sales. The second set of data summarizes similar data across numerous distributor industries, including roofing, electrical, etc.
A rendition of this compensation survey has been offered throughout multiple distribution associations for more than 20 years and has been a HARDI staple since 2010.
Loftus said HARDI’s compensation survey is continually revised to keep up with the changing landscape regarding 401(k) plans, health care benefits, inflation, etc. Approximately 80 distributors participated in the 2016 survey, but Loftus is confident that number will spike in 2018.
“Throughout the Great Recession, there wasn’t a shortage of workers like there is today,” he said. “Distributors weren’t as concerned about losing employees as they are today because there are a lot of job openings out there. Jobs are turning over, and workers have options. There’s greater incentive for distributors to dig into something like this today.”
Team Air Distributing is an air conditioning specialist that focuses on HVAC equipment. The company opened in 1990 in Nashville, Tennessee, and presently distributes American Standard, Mitsubishi, and ClimateMaster products. It covers middle and east Tennessee and staffs 49 employees across four branches.
Jim Murphy, principal/founding partner, Team Air Distributing Inc., refers to the compensation survey as his go-to document.
“Whenever we get into a pay discussion, I immediately turn to the compensation survey,” he said. “Our executive team always circles back and asks, ‘What does HARDI say?’ When we have new people coming into the company and it comes time to select a salary, this provides us with a proper benchmark.”
Murphy said the Tennessee market is very competitive when it comes to HVACR distribution. The company remains very stringent regarding hiring and measures its performance on a sales-per-employee basis.
“Tennessee is the seventh-largest state when it comes to a/c shipments, according to AHRI [Air-Conditioning, Heating, and Refrigeration Institute],” he said. “To remain competitive, we need to make sure we’re hiring the right people and paying them properly.”
Murphy said Team Air Distributing has participated in the compensation survey for the past 27 years and plans to continue doing so.
“This is a worthwhile program that all distributors should be participating in,” he said.
Refrigeration Sales Corp. in Valley View, Ohio, is an HVAC and refrigeration wholesale distribution company that staffs 135 full-time employees. The company boasts just under $100 million in sales and operates 10 branches — nine in Ohio and one in Pittsburgh.
Doug Wight, vice president of operations, Refrigeration Sales Corp., has participated in HARDI’s compensation survey for the last eight years and insists it’s helped him make some difficult staffing and compensation decisions.
“The HARDI compensation survey has allowed us to get our employees into the proper salary ranges,” he said. “We want to pay our staff fairly and make sure our wages are competitive. We don’t want our associates finding out they can make $10,000 more a year working for our competitors.”
Wight said the data actually helped his administrative team determine it was paying too high of wages, at times.
“Using this data, we’re able to classify salaries — buyers fall in one range, sales in another, etc.,” he said. “Through this, we actually discovered we were misclassifying a few of our jobs as the salary we were offering was much too high. We were paying more than anybody else. So, we made an adjustment. We reclassified that job to a lower pay range, which allowed us to make better decisions on whether or not we’re giving out increases for that job title.”
Wight said the survey is also helpful whenever employees dispute wages.
“Recently, I had an employee come into my office and say, ‘I like my job, but I’d like to make more money.’ So, I pulled out the compensation survey and asked, ‘How much more would you like to make? Here are the jobs and the ranges for each.’ This allowed me to be transparent, show him exactly what we were working with, and define what he needed to do to achieve his personal goals.”
Wight said he’s excited to participate in the 2018 version of the compensation survey and even more excited to learn the results.
“The compensation survey is a very important benchmarking tool,” he said. “You have to make sure what you’re doing internally is applicable to the real world, and the only way to do that is to obtain outside data such as this. HARDI does a really nice job of putting this together.”
Loftus summed it up by saying that employee compensation is among distributors’ largest line items.
“Don’t guess what a salary should be, know what it should be,” he said. “If your most valuable asset is really your employees, you must ensure they’re being paid properly. And, while there’s certainly some effort involved in filling out this survey, there’s a lot more effort involved after one of your teammates resigns.”