Pay Them Well and They Will Come
The word “crisis” is overused these days. It is thrown around to describe any challenge, great or small. We have had an energy crisis, a banking crisis, a healthcare crisis, an immigration crisis, a federal budget crisis, a climate change crisis, and an affordable housing crisis, all of which creates a crisis of confidence which inevitably leads to a personal crisis. My favorite football team, the Minnesota Vikings, was said to have a “looming crisis in fielding a productive offensive line.” A first world problem for sure — now termed a crisis.
Similarly, we’ve heard from all corners of the industry that we have a “workforce crisis” upon us as the aging baby boomers who staff this industry retire and no one is left to fill the jobs they leave. We are apparently helpless in the face of this looming crisis. What is a good business operator to do?
Let’s leave all of these many crises of today and go back 26 years.
“Pay them well and they will come. Pay them well and they will stay and never leave.”
I first heard this phrase uttered by industry visionary Frank Blau in 1991. At the time, Frank was on a crusade to change an industry defined by low pay, low prices, and even lower self-esteem. The first targets of his message were beleaguered owners who worked long hours and paid themselves low wages. In 1991, Frank said no owner of any HVAC company — even if a one-man outfit — should pay themselves less than $100,000 annually. To put this in perspective, that would be equal to $175,000 today. Hard to argue with Frank then. Can’t argue with him today. Owners deserve to be compensated for the risk they take and their contribution to society. Fortunately, owners in the last 25 years have started to compensate themselves a little better. Change has occurred.
Right on the heels of Frank’s message to owners was a second message about their employees. He believed with great conviction that employees of companies that protect the public health and safety, as HVAC technicians and installers do, deserve top pay and benefits. Much higher pay and benefits than could be earned in other comparable professions that offer much less to society. Frank insisted that contractors shouldn’t compare what they pay against local industry competitors. He always felt they were underpaying anyway. He wanted contractors to pay their valued associates more than any other comparable opportunity in the entire local economy. Whether working in the public or private sector, he encouraged contractors to be the employer of choice in their area. His passion and intensity were unmatched as he shared his convictions with anyone who would listen.
His message during that time was not to pay them well because you had to, but to pay them well because they deserve it. Remember, this was a time when it was not as difficult as it is today to attract top talent. The word “crisis” was not used to describe the labor pool during that time.
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I think we can all agree that the pool of qualified talent is thinner now than at any time in recent memory. “I can’t find good people,” is a phrase uttered by thousands of business owners each day as their Craigslist ads offering “competitive pay” go unanswered. What is a person to do?
The same as in 1991. “Pay them well and they will come. Pay them well and they will stay and never leave.”
When the word is out that your company is paying top dollar for good employees, people will take notice and begin moving to your business looking for fresh opportunities. It’s important to note that I said top pay, and not competitive pay. You’ll have more and better options when it comes to hiring new people. Having a line of people waiting at the door to get into your business also makes it easier to remove low performers. Top performers will also know that their pay and benefits are not easily replaceable in the open market, which makes them less vulnerable to your competitor’s solicitations.
Few things in business are more painful than losing a great employee. Great employees are ambitious. Great employees are noticed by others, including your competitors. Recruiting and holding on to great employees should be a top priority at your business, and when you pay them handsomely, the chances of them leaving you for more money or greater opportunity will fall dramatically.
I know what you’re thinking. “How can I pay top dollar for employees and still turn a profit?”
Don’t view this as a negative. Your customers deserve to have the best employees in their home and business. And they are willing to pay for it because it is in their best interest to do so.
Investing in good people is a legitimate business expense, and like all legitimate business expenses, it needs to be built into your selling price for an hour of labor. Remember, it is in your customer’s best interest to have top talent in your business. They will pay for it. When you consider that you are paying top dollar to only top performers, and not top dollar to average performers, the impact on your cost structure will be less than you think. But even if it does cause business expenses to rise, that’s ok, because you can then pass those on to consumers just like you do a price increase for equipment or sheet metal.
“Pay them well and they will come. Pay them well and they will stay and never leave.” It’s a message that is just as important today as it was back in 1991.
Publication date: 10/1/2018
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