Contractors in the skilled trades — HVAC included — don’t need to be told about the labor shortage. Older and experienced technicians are increasingly retiring, and there are not enough young people to replace them. Part of this is due to the elimination of shop classes in high schools, which use to offer students an introduction to trades as a career. Counselors and culture pushing college degree programs to high school students compound this issue. Degrees are seen as the primary and best way to advance one’s career, so many students never learn what a rewarding path the trades are. As HVAC contractors grapple for skilled technicians, some see signing bonuses as a strategy for recruitment.
Attracting and Keeping Talent
Matt Marsiglio, operations manager at Flame Heating, Cooling and Electrical, said that Flame instituted a signing bonus program around three years ago to help attract talent. The management team had been discussing ways to attract more talent, and they decided on the bonus. Bonuses at Flame range from $600-$2,500 depending on the skill level of the person being hired. In order to secure the talent for at least a year, delivery of the bonus is paid out at 90 days and 12 months after the person has begun working for Flame.
“The signing bonus, for us, is designed to attract experienced people,” Marsiglio said. “I think that we'll continue to see competition in the workplace for experienced labor.”
Flame hires a substantial number of people out of trade school, and Marsiglio added that while entry-level people can still be challenging to attract, they are easier to obtain than experienced techs, since not as many companies are willing to train new talent from the ground up. He added that as time goes on, signing bonuses are becoming more of a standard across the industry — less of something that sets a contractor apart and more of something that needs to be incorporated just to keep up. According to Marsiglio, the company prides itself on both paying and treating its employees well, so current employees do not mind new hires getting a signing bonus.
Flame has seen success with the signing bonuses, but referral bonuses have worked even better at the company.
“A lot of times when you work in the trades, you know other people that work in the trades,” Marsiglio said. “You can refer them over and then we'd give a bonus to both our employee and then the new employee.” This also helps with quality hires, as employees refer workers who will reflect well on themselves.
Bonuses and Other Benefits
Empire Heating & Air Conditioning has been offering signing bonuses for at least the past five years. The company will typically pay the bonus over the course of the first year, the amount being dependent on experience.
“I know that if I get people in my company, they will see the culture and the benefits,” Martin Hoover, owner of Empire Heating & Air Conditioning said. “They get into the groove of our organization, so I don’t expect them to leave, especially if they've been somewhere else that perhaps wasn't all that kind to their employees.”
Benefits at Empire include but are not limited to summertime vacation, a full cafeteria, health care, insurance, and 401(k) matching. Hoover’s company also offers referral bonuses to its employees.
Empire also works to develop its workforce by finding the best young people as possible and pairing them with a more experienced technician for mentorship. Hoover is confident that the signing bonus complements the other benefits of working for his company, and he has seen other companies use other unique strategies. Once, he heard of a company that was offering $250 for qualified technicians to come to an interview.
Pairing Bonuses With Culture
Jim Corcoran, head coach at Business Development Resources, explained that while signing bonuses can be effective, every HVAC contracting company needs to take the time to evaluate what the best hiring strategy is for them.
“Every contractor looks at it differently,” said Corcoran. “Every contractor is at a different state of their business and is at a different state of what they are willing to contribute back to their business.”
A contracting company can use a signing bonus to attract talent, but the bonus will be of little help if the company does not have a quality workplace to support it. If the employee gets hired only to find that managers are hard to work with and his time and effort isn’t respected, then the signing bonus likely won’t keep that employee from going somewhere else.
On the flip side, if an HVAC contractor works to become the “employer of choice” in his or her local area, that contractor may find that the need for a signing bonus is lowered or eliminated altogether, since the benefits of working for that caliber of company will attract employees. Corcoran said that the companies doing the best job of hiring are going to guidance counselors in high schools and advocating for the HVAC industry, and are using social media and marketing to identify HVAC as an extremely viable career.
A large part of making sure employees stay after signing on (whether due to a signing bonus or not) is working on achieving a great company culture as well as good work processes and good training.
“Quality companies know their key performance indicators,” said Corcoran. “And they’re not against cutting bait if it’s not the right person.”
In his time coaching HVAC companies, Corcoran has seen a number of extremely creative ways of attracting talent through competitive and unique incentives, such as education reimbursements for the employees and their families. Some contractors match donations for charities the employees choose, or will donate a portion of their revenue to charitable giving. They will get involved with local volunteer organizations and offer “volunteer days,” where employees can be paid to volunteer during company time.
Health and wellness incentives such as gym memberships or on-site workout facilities are another option, or offering fully stocked kitchens for employees to use. Some offer financial or nutrition classes to their workers.
“Companies that spend the time to build their culture, make the team feel like family, and go the extra yard will become the employers of choice,” said Corcoran. “And they will get their employees of choice.”