One of the age-old questions contractors ask is about technician compensation. Many years ago, the contractor for whom I worked as an apprentice told me, “Rich, you have to decide whether you want to be a wanted mechanic or a needed mechanic.” He called journeymen mechanics. I use the term technicians. As an apprentice learning the trade, I appreciated his advice.There is a difference between wanted and needed technicians.
A needed technician is someone who fills a void created when the contractor has more work than they can handle. Too many jobs and not enough technicians to complete them.
Needed technicians are expendable. When the glut of work is completed, those technicians are no longer needed.
Wanted technicians are those who possess certain qualities that put you, the contractor, in the position of wanting to employ them because of their abilities and work-style traits that can help your business grow and flourish.
I call them Star Techs because they help take your business where it hasn’t been before if you only hired needed technicians. They are invaluable to your business and often hard to find.
Why Star Techs make the difference
A Star Tech is a technician who possesses certain assets and traits and strives to be the best at their chosen profession. If you want “good help,” you must know what to look for before hiring anyone. Technicians either have the assets and traits needed, or they don’t. Star Techs must have all seven of the following assets. Many more than these seven are needed, but those assets can be taught.
1. Integrity. Before hiring an employee, contractors must consider the two most important assets of a good employee. The most important asset needed is integrity. It is moral soundness, honesty and honor. No one wants to deal with a dishonest person.
Without integrity, people cannot be loyal. Without loyalty, people cannot be trusted. Without trust, people cannot be respected. It’s hard for people to maintain a great mental attitude when they are not trusted and respected. When this occurs, they will look for shortcuts instead of applying themselves. They will overlook excellence and settle on mediocrity. In turn, your business will lose.
2. Loyalty. The second most important asset is loyalty. It is an altruistic quality that, when combined with the most important asset, signals to everyone that the employee is trustworthy. Trust and respect are earned through loyalty. Trusted and respected employees can serve the consumer better than those who are not. With loyal techs, your business has an opportunity to succeed.
3. Aptitude for the position. A person without the aptitude for the position lacks the ability to perform the job’s tasks well. The tech would not be able to perform properly. However, a person with aptitude is inclined to learn. Even an entry-level applicant with the right aptitude can be taught how to perform the tasks for which they are being considered.
4. Great mental attitude. People who look for the silver lining in a cloud can perform their jobs even when faced with the worst obstacles. Those who are easily depressed because the sky becomes cloudy will look for any excuse to not complete their tasks properly. They are card-carrying members of the “it’s not my fault” assemblage of inept, anti-productive misanthropes. They will infect other employees with whom they come into contact. And then, your business suffers.
5. Self-motivation. Employees with an aptitude for their jobs, a great mental attitude and self-motivation will take the bull by the horns and do their work without being asked. This allows the contractor to concentrate on running and growing the business rather than babysitting the help.
6. Excellence. A good employee is one who strives to be better than good. A good employee wants to be the best. To be the best, employees must pursue excellence.
Vince Lombardi, former coach of the Green Bay Packers, said that to attain excellence, one must seek perfection. When employees seek perfection, contractors will have satisfied customers. Satisfied customers make for happy contractors.
7. Follows orders. For an organization to function properly and fulfill its reason for existence, a system of rules, regulations and procedures must exist and be enforced by a supervisory authority. All employees really have only one job: to please their employers. The first step to accomplishing that feat is following the orders of those in charge.
Pay for performance and loyalty
After you are assured that a candidate for employment fulfills those needed assets, you must decide which position you want them to fulfill and how they will be compensated.
Regarding compensation, there are issues to consider. Technicians are human; they, like you, want to get ahead. If you want to keep them in your employ, you must help them to get ahead.
The first way to support them in this endeavor is to pay them a salary commensurate with the value they bring to your business.
It’s imperative to realize that many politicians are trying to raise the minimum wage to $15 an hour. That means if a person flipping hamburgers makes $15 an hour, technicians who require much more knowledge and keener abilities to qualify as Star Techs who help you build your business must be paid significantly higher hourly wages.
I realize your business goes through slow and busy times. Higher hourly salaries may be hard to adhere to during slow times. However, if you want to keep Star Techs in your employ, you must ensure they are compensated in a way that allows them to value their position in your business.
If you don’t keep them in your employ, then they go to your competition. Or, worse yet, become your new competition. Either way, you lose.
Think out of the box. Sweeten the pot: in addition to a base salary, you could offer bonus incentives based on a percentage of the revenue they bring in to your business.
Build a culture of excellence
Initiating an incentive should start slowly and easily. Bonus percentages should initially be set low as a trial, with the hope of a higher percentage if the trial proves positive. The reason for the low percentage is that once you give an employee a benefit, it is difficult to take it away without affecting morale.
By keeping the initial trial percentage low, if the trial period proves to not produce positive results, you could still afford to give them the benefit with low impact on your operational costs. However, you must include this expense with your budgeted technician compensation line item, as you should with all legitimate operational expenses.
For example, offer a 1% bonus incentive split into two parts: 0.5% for selling the job and 0.5% for doing the job. This allows you to consider that the selling tech and the task-performing tech may be two different techs.
Once bonus incentives are calculated, the costs of callbacks could be deducted. This allows you to reward techs based on their sales and task performances while giving them a reason to manage their callbacks.
If the trial proves successful, you should consider a higher bonus percentage to keep your Star Techs happily satisfied with their employment in your business.
You could use performance evaluation data to award techs bonuses based on their individual ratings, rather than a single percentage for all techs.
This method also serves to eliminate uncomfortable feelings that arise when techs ask for a raise.
If techs become jealous of other techs having higher bonus percentages than they get, you can use the higher percentage tech as an example of what the other techs should do to achieve a higher bonus percentage.
And, since techs talk to each other about their compensation, that could give other techs a reason to achieve a higher performance rating.
As you raise your prices to cover other operational expenses, techs’ compensation will rise, depending on their performance rating.
With this method, the base salary could be minimal, since the bonus incentive could be much greater than they could earn from an hourly rate. Good techs win. Star Techs win more. When economic times are good, the revenue brought in to your business will cover the bonuses. And if times are slow, your expenses are less, allowing you breathing room until better times arise.
So, when considering the compensation you pay your techs, think like a tech who wants to achieve performance goals: contemplate financially prudent ways to address your true business costs and develop properly profitable selling prices while you reach for the stars.
