Thoughts on this compensation model for tradespeople?

[adrialee]

I'm looking to get out of my current business and get into a franchise for a service company. It's a fairly inelastic demand service, one of those 'you look us up when you need us' type services.

Specialized work, yet something you can learn on the job. Some indoor mostly outdoor work, and working in lightly inclement weather will be required when it's not too dangerous. (Cold, light rain/snow, nothing heavy or super windy).

Bookings will have to be made by sales calls but most of the time the crews *will* be busy based on other franchisee's experiences.

So with that in mind I want to attract solid people who will have a good reason to stick around. Good people need good pay - a philosophy I live by.

So I'm thinking of the following compensation model (the specific $ are not so important as the guaranteed income):

Level 1: Probationary (90 day period) - $X/hr (which will be at local "general laborer" rates)

Level 2: Technicians Assistant - $Y/hr (2-3 over $X)

Level 3: Technician $Z ($3-4 over $Y)

That's all basic - here's the part I'm wondering about.

If you're on the job you're paid at your skill level. If, however, we don't have any scheduled work on a given day (or half day), you will still get paid at Level 1 up to a minimum 40 hours/wk total across all levels.

Example: A crew (1 tech 1 probie for this case) gets 3 full day and 1 half day jobs in one week. That's 28 hrs scheduled and 12 hrs unscheduled. The probie* will get 40 hrs at $X. The Technician will get 28 @$Z and 12 @ $X.

The idea is guaranteeing a certain minimum income no matter what. Additionally, to qualify for overtime, you have to actually work a full week. If you had a half day unscheduled and the other jobs run long you have to make up that 4 hours at full pay before you can get OT. Taking a day off mid week won't get you any pay (at least not immediately - eventually I'd like to implement some kind of earned PTO system but that's downstream).

Obviously this means I'll need a higher cash reserve up front as well as to cover slower times, I think having that guaranteed income level as a trades person will bring stronger people and be worth the trade. My question is - what am I not thinking about here? Am I missing anything with this approach? Any legal issues? Labor board issues? Other pitfalls to be concerned with?

*(One thought I am having is maybe not making the 40/hr guarantee to probationary employees. Once you pass the probation period, maybe that's the first real benefit we offer. )

 

[matt123]

@adrialee Guaranteed income will definitely help attract and retain employees.

Whether your levels of pay are reasonable, we can't possibly know without understanding your local market conditions and comparable pay for similar type work. In my local area, even Walmart pays $2-3 an hour above minimum wage - or equivalent to your Level 1 pay - so that's not a very attractive wage. It would be hard to attract people to work outdoors in inclement weather for equal to what they'd make at bottom of the barrel entry level wages like Walmart pays. Your area may be different, though.

As an employer, if I were to offer this model I'd have a big list of work or jobs that could be done during those down times. Instead of paying employees to stay home, I'd have some sort of work that would be done. Could be work on marketing (even hanging door flyers), could be work around the office, could be volunteer/charity work that gets done in the name of your company (sponsor a road, etc), but I'd have a preset list of work that gets done in the down time.

 

[adrialee]

@matt123 Yeah I should rephrase that to read that probies will make "general laborer" money - I still need to nail down what that actually is here in my state.

Also great point about the "downtime work"! Door flyers will definitely be a thing, again because of the nature of the service. (There will NOT be random door knocking though!

I can't stand those people!) I like the community building idea too! I actually don't expect there to be a lot of shop/office work but there obviously will be at times.