Years ago, my employee turnover was awful—it was wrecking my business. Someone told me that you need about a 5% unemployment rate to fuel a quality labor pool. At that time unemployment was 1.9% in my county and now it’s 3.7%. So it’s still not easy to find quality employees to staff the demand. But simply wishing and hoping that the unemployment was higher so that you can attract good employees is not going to fix anything, because you’re going to have a different problem—attracting customers in a down economy!
25 years ago I had to realize that the problem was me, not everyone else. Did I want to make excuses or did I want to make it better? My employee turnover was out of control and my staff could walk all over me, but I couldn’t fire anybody because I didn’t have anyone to replace them! So I fixed me, and fixed my business. It’s was hard. Not complicated, but hard. Extraordinary is difficult to achieve. If it were easy, everyone would be doing it. How badly do you want it? How good do you want to be?
Most people don’t want it badly enough and won’t do what it takes to succeed in business. They want it to come easily. But until you want it badly enough you’re not going to have it because you’re not going to work hard enough.
Be a better job
The secret is so simple that a lot of people will dismiss it as too easy. If you want better employees, you have to BE a better job. That’s it. And there are two pieces of this formula that I want to cover. In today’s post, I cover secret #1 to hiring the best team.
Secret #1: Pay better
How do you become a better job? You have to pay better. Crappy pay equals crappy workers. Paying just a little above minimum wage is not enough. It starts with the money. Many years ago I had employees who quit but told me, “This is the best job I ever had and you’re the best boss, but…” And there’s a long list of reasons why they had to leave—my mom is sick, I lost my babysitter, I’m putting too many miles on my car. The first thing you have to fix to be a better job is you must pay better.
Pay for performance
Here’s my philosophy: You need to pay for performance, not longevity. Paying for longevity means if someone just shows up and sticks it out then we end up paying them more over time. So you need to create a system of performance-based pay. I devote an entire hour in my CBF program to giving you the formula for rolling out pay for performance, but if you’re not enrolled in my program, you can still adopt the mentality and come up with a way to reward based on performance.
Make it non-subjective
Another key: make performance-pay non-subjective, not based on quality. I don’t agree with tying a person’s income to the quality itself because we tend to assign our pickiest customers to our best cleaners. We would be undermining their ability to succeed if we pay for performance and then give the best cleaners the grumpiest customers who are more likely to complain. Don’t base their performance on anything outside their control, like how someone reacts to their cleaning. There are things they can control: absenteeism, how much work they ask for, not calling in sick, great attitude.
Raise your prices
An absolutely necessary element of this is that you need to raise your prices so you can afford to pay better. Most cleaning companies are under-charging. If you’re below market rate then you can’t afford to pay your employees well. In order to raise your prices, you should do a market analysis of all the other professional services in your area and then raise your price accordingly.
Always be hiring
Pay your people better and then always be hiring. Hiring is marketing. We’re always looking for customers and so we’re always hiring so we can meet that additional need.
You must create an irresistible job. My employees actually call my office if they have a light week, begging for more work. Most business owners are the ones begging their employees to take an extra house cleaning. We have a unique formula to pay for performance that I teach in my CBF course. But when we create an irresistible job, we attract long-term employees who are committed career cleaners. Pay better for you to be a better job.
Stay tuned for Secret #2!