When I worked as a lawn care business’ crew manager, my guys would take 2 hours just to get their trucks ready and leave the shop. And when they finally started, they still made their regular stop at 7-11 for coffee plus random breaks throughout the day — all while on the clock. After making a few changes, those same guys brought down their prep time to only 15 minutes, kept their equipment in pristine condition, and rarely took breaks while out on the job. The crew started making bigger paychecks, and the company made more profit!
The new secret was Piecework.
With the piecework system, you pay your employees by the job, instead of by the hour. For example, a job that you charge $45 for is approximately a 1.0 man-hour job. If your labor costs average 40%, you can pay your workers 35% of the billing price, or $13.50. This gives your otherwise $8/hour employee the opportunity to make $13.50 per job, no matter how long it takes them. If two people were doing the job, they would each get $6.75 whether they were there for an hour or a minute!
Pros of Piecework
You will be pleased to note that under the piecework system, your employees will think twice before coming back for a broken bracket on a trimmer. With piecework, time is money. They’ll take better care of the equipment because they don’t want to waste time going back to the shop.
You’ll be pleasantly surprised at your employees’ new interest in charting the best routes. Their 7-11 coffee stops will suddenly seem much less necessary. Truck time simply doesn’t pay anymore and you haven’t nagged once.
Maximizing your employees’ paychecks now correlates to maximizing yours! When your employees get to their job site, they won’t wait for the song on the radio to end; they want to start cutting as soon as the truck is parked!
Also, instead of three of your employees waiting around for the last crew member to finish up, amazingly, they are all finishing up at the same time!
If your crew does 20 jobs in a day and wastes five minutes on each job, that’s 100 wasted minutes per crew member. For a two-man team (200 minutes) this would be three hours and 20 minutes per day. Can you afford it?
Good Quality Workers
When higher pay is an incentive, you can attract better workers and retain them longer. Within the piecework system, you can easily offer a hardworking individual the possibility of $20/hour.
In addition, the system will naturally weed out the lazy folks. Your crew leaders will suddenly not want to be with the talker and let you know when someone isn’t pulling their weight.
Suddenly, you’ll have much less to do because your employees start thinking like you do, making smart decisions, and managing themselves. Now you can spend more time and energy on developing your lawn care business, or go on vacation!
Concerns about Piecework
Some owners have a hard time writing the first paycheck after implementing piecework; it can be much more than they’ve previously written a check to the same employee for. But with this system, employees only make money when the business does and looking at the profit rather than the raw dollar amount can make the pen move a little smoother across the paper.
For example, if at the end of the week your employees made $20 an hour, and you use the percentages we mentioned above, that means you made $150 an hour! You weren’t paying them to stop at 7-11, just to get the job done, and on top of that your equipment was better maintained because they know they can’t get the work done with a broken mower.
Many lawn care business owners don’t take the step to implement piecework because they’re afraid the quality of work will plummet. But we’ve gotten calls from our CLIP users who went from hourly to piecework saying that their quality was better just because they didn’t pay for do-overs! There are other systems for quality we’ve seen good results from as well. Check out some of our past webinars for ideas: http://www.clip.com/webinars.html
Any time a change is implemented by an employer your employees usually assume it’s to make your pocket fatter and their’s thinner. There are a couple of ways to make sure they done have this mentality. One way is to introduce it gradually. Institute a substantial production-based bonus system so that about 10-20% of your employees pay is a result of how productive they were. Begin by paying an extra $1 per man-hour produced in a week AFTER 50 hours have been produced. That will help your employees start looking more closely at the man-hours and see the immediate benefits of the system.
An easier way to implement it is to explain piecework to your crews, track their pay both by the hourly and piecework system, then tell them that at the end of the week they’ll get to decide which paycheck they want to take home. That way you, as the business owner, carry all the risk. This method is easier, simpler, and faster both for the employee and the employer.
When the company I worked for implemented piecework, our production increased so dramatically that the first week we finished the work two and a half days earlier. Now that’s employee motivation! After implementing the piecework system, we’ve heard from some CLIP users that have literally doubled their production without increasing costs.
As a leader in the green industry, CLIP Software has seen hundreds of green industry companies achieve these results by switching to piecework. Ask yourself why you can be so much more productive in the field than your workers. Are you not, as an owner, already on the piecework system? Put your employees on the same system and they will not only work faster, they’ll work smarter!
You can learn more about piecework and other lawn industry tips at www.clip.com/learn.
CLIP Software helps with your routing, scheduling, and job costing and is designed to work easily with the piecework system.