As a company that has varying staffing needs, we find it necessary to rely on a lot of part-time workers. HIS Installation, like many service industry companies, takes on different type and size projects. Sometimes we need large crews, other times we need only one or two “good” workers.
So, how do we find good part-time help?
First off, it isn’t easy. Sometimes we flat-out get lucky…of course we like to think that the Man Upstairs is looking out for us.
Here is what 30 years of experience in the material handling industry has taught us:
- Sometimes the best help is home-grown – There are five of us sons, all of whom, at one point or another, worked for HIS Installation. To this day, and this isn’t bragging, we have been the most reliable, hardest-working employees. Part of this is we had a strong motivator, i.e. our Dad; however we also wanted the family business to succeed. As one of our non-family member workers once told me, when we were discussing the difference between good help and not-so-good help, “Joe, it has everything to do with how you were raised.” I think there is a lot of truth there.
- Just because someone is a good friend doesn’t mean they will be a good worker – This can be tricky, having unrealistic expectations for friends can do more harm than good. When we’ve allowed friends to work for us and then things not worked out, feelings always got hurt and the relationship inevitably was affected.
- You have to be able to size people up – This may sound old-fashion, but I’m a firm believer in watching and listening to people, in other words, sizing people up. I normally have a pretty good idea what kind of worker a person will be by the quickness in their step, the firmness of their handshake, the tone of their voice, and their physical shape. I know that may sound biased, but if the shoe fits…it fits. A worker knows a worker.
- It’s okay to give people a chance – Some of our best workers have been guys who have been down on their luck. They tend to have something to prove. They’ve been beaten down bad enough that they want a new start. I’ve always appreciated these type of individuals.
- Be quick to make changes - If it’s not working out, it’s not working out. I generally give a person two, maybe three, days to show me they can do the job. I don’t wait much longer than that. It makes the whole process easier – less resentment, less hurt feelings, less impact on the project. It also keeps the morale of the team stronger. If everyone has the understanding that if you aren’t measuring up you’re gone, they tend to put forward their best effort.
Following these steps we’ve generally been able to build good project teams. While the work is hard, we normally have a good time doing what we do. To this day, many of our best guys have gone on to better and brighter careers, but they all are appreciative for the experience and values they received while working for HIS Installation.
As a small family-owned and operated business, we are continually looking for ways to increase profitability while developing smart growth for our business. A popular approach is a strategic business unit. What’s a strategic business unit? The definition I find most useful is from BusinessDictionary.com:
Autonomous division or organizational unit, small enough to be flexible and large enough to exercise control over most of the factors affecting its long-term performance. Because SBUs are more agile (and usually have independent missions and objectives), they allow the owning conglomerate to respond quickly to changing economic or market situations.
Given that definition, it could also be set up as a DBA (doing business as). This allows an autonomous division to be fictitiously named. Why would we do that? So that we can avoid creating a new legal entity for each business we decide to spin off our primary legal entity (i.e. corporation, LLC, etc). Forming a new legal entity involves costs of incorporating. A Strategic Business Unit, set up as a DBA, is a legitimate option for diversification without the time and costs associated with creating a new legal entity.
So when is a strategic business unit the right move? Let’s say that you run a service industry company that is normally sustained by several large projects a year, as is the case with our business. While that provides an adequate amount of revenue and profits for us as owners, it does not provide steady income for our hourly workers. We are fortune to have some very skilled workers. Some have backgrounds in general construction (electrical, plumbing, carpentry, masonry work, flooring, etc.), others in welding, others in design, and others in landscaping. This provides us with an opportunity to build strategic business units around people. Keeping the “right” people is key to growing any business. If creating a strategic business unit around an individual allows us to keep them available to our core business then it might be a good option. But let’s analyze the might.
While it might be a good option it might be a distraction from what has allowed us to remain in business for almost 30 years. This is where we turn to a time-tested, decision making process:
- SWOT Analysis
- Cost Analysis
- Projected Billable Hour Assessment
Let’s look at each of these and consider why they are relavent to the decision making process.
1. SWOT Analysis – SWOT simply stands for Strengths, Weaknesses, Opportunities, Threats. Analyzing strengths and weaknesses allows us to focus internally, drawing on past experience and the present state of the business. When considering opportunities and threats we focus on external elements, such as the economic environment, existing competition, etc., and analyze what the strategic business unit might do in the future. This is a powerful tool and can often be the determining factor.
2. Cost Analysis – When performing a cost analysis we general look at specific startup costs such as direct labor/materials costs, any professional fees, technology/equipment costs, administrative costs, marketing/advertising costs, indirect labor/benefits costs, as well as potential taxation effects. All of these categories have to be thoroughly broken down. Never, NEVER underestimate these costs.
3. Projected Billable Hour Assessment – This is where we take all the data we’ve gathered in our cost analysis, estimate our potential billable hours, and then work the math. First we find beak-even, then apply our desired profit margin. Once we have our billable hour rate we see how it matches up to the industry standard. Please keep in mind, the industry standard is just that, the industry standard. We have no idea if the business owners in this particular niche have the first clue about pricing. We will always trust our billable hour rate before we go with an industry standard, however it’s good to know where you stand. We just make it a point to deliver on the service side – high quality and exceeding expectations. I’ve written in greater detail on determining billable hour rate here, How Much Should I Charge. This assessment also shows us how many hours our workers will be tied up doing work for the strategic business unit. It will reveal the potential time conflicts.
Using this three-fold criteria, we usually have a clear understanding of what course of action is best for us. We also do a gut check. Sometimes everything looks good on paper but there’s just something in our gut telling us not to proceed. That’s when we think, think, think….and, of course, ask our wives what they think Don’t ever underestimate the intuition of those lovely ladies! Please note the gut check is normally not true in reverse. If the SWOT analysis, cost analysis, and projected billable hour assessment all tell us not to proceed, then it’s generally smart to look elsewhere. I say generally because there is an exception to every rule in startups.
One final thought…Make sure the strategic business unit is not entirely out of your scope of expertise. If you lose a key person in the SBU what happens? How easily are they replaced? While linchpins are absolutely necessary, sound business models create environments in which they can thrive.
So far I’ve written more on the nuts and bolts of running a service business. Today, however, I’m going to take a philosophical approach. I want to talk about work ethic.
I recently read a chapter from The Way To Happiness, by Fulton Sheen, entitled “Work.” He opens the chapter with the following:
Very few people in this age do the kind of work they like to do. Instead of choosing their jobs from choice, they are forced by economic necessity to work at tasks which fail to satisfy them. Many of them say, “I ought to be doing something bigger,” or “This job of mine is only important because I get paid.” Such an attitude lies at the bottom of much unfinished and badly-executed work. The man who chooses his work because it fulfills a purpose he approves is the only one who grows in stature by working. He alone can properly say, at the end of it, “It is finished!”
My mind immediately began to ask the question – Does my work fulfill a purpose I approve?
Sometimes my work is very ordinary and menial. I struggle with the thought of “Am I using my time wisely?” or “Could I be doing something more meaningful?” Sheen goes on:
This sense of vocation is sadly lacking nowadays. The blame should not be placed on the complexity of our economic system, but on a collapse of our spiritual values. Any work, viewed in its proper perspective, can be used to ennoble us; but a necessary prelude to seeing this is to understand the philosophy of labor.
Every task we undertake has two aspects-our purpose, which makes us thinks it worth doing, and the work itself, regarded apart from its end-purpose…a man working in an automobile factory may have, as his primary purpose, the earning of wages; but the purpose of the work itself is the excellent completion of the task. A workman should be aware of the second purpose at all times-as the artist is aware of the aim of beauty in his painting…Today the first aspect of working has become paramount, and we tend to ignore the second…so that many workmen lead half-lives in their laboring hours.
…The legitimate pride in doing work well relieves it of much of its drudgery. Some people, who have held to the craftsman’s standard, get a thrill from any job they do. They know the satisfaction of “a job well done” whether they are engaged in canning a chair or cleaning a horse’s stall or carving a statue for a Cathedral. Their honor and their self-respect are heightened by the discipline of careful work. They have retained the old attitude of the middle ages, when work was a sacred event, a ceremony, a source of spiritual merit. Labor was not then undertaken merely for the sake of economic gain, but was chosen through an inner compulsion, through a desire to project the creative power of God through our own human effort.
How true these statements are! I was discussing this with one of our lead guys just the other day. I remember asking him, “Where are the workers?” He said pointedly to me, “Joe, it has everything to do with how you were raised.” In other words, the philosophy of labor you were taught and practiced governs your attitude toward work. If your belief system toward work is one of getting by, entitlement, and the old saying of “hardly working verses working hard,” then your work ethic probably stinks. One thing we make clear to our guys is that workers will get to work, time takers will be shown the door.
I find great satisfaction in a job well done. I tell our guys all the time, “The worker is worth his wage…and then some.” It is extremely important to understand the subject of that sentence: the worker. True fulfillment comes from a proper understanding of the two aspects of work described by Fulton Sheen. Yes, I desire to earn a living doing meaningful work, however that desire must also be accompanied by a striving to do the job well. In my own experience, this understanding of work has made all the difference. Remember, your work ethic matters.