Overtime: A Key Indicator for Healthy Growth
Originally published: 04.01.14 by Jim Victor
My business is in the dry deserts of the great southwest and, as much as I would like to think it’s different here in New Mexico, manpower issues are likely very similar all over the country. We all know that the available technician supply is dwindling. Fewer young people are going into the service industry and, more often than not, good technicians are starting their own businesses. Many of those businesses will not last; however, in the mean time, they hurt us all. Overtime is a topic to take seriously.
So often the word overtime echoes as a threat to our bottom line.Business owners look at overtime as an unnecessary expense. When it comes to office staff, this is often very true. Overhead expenses dilute the profit margin and, with today’s technology, we should be able to process all that needs to get done within a reasonable amount of time. Always remember, though, that paperwork is directly proportional to the time you spend on it. If your staffing ratio is getting too high for the work you do and your staff truly cannot handle the workload, maybe it’s time to add another office person. Overtime for technicians and installers, however, is a different story.
Every HVACR contractor has complained about manpower problems from day one in the business. You either have too many or too few technicians. Ours is a seasonal business. When the weather is moderate, there is never enough to keep the guys busy. When it’s hot or freezing cold, you could always use just a couple more guys. So what’s the solution?
Let’s say that you could just go out and hire a couple seasoned techs the day the phone starts ringing off the hook. That would be nice if there were an adequate workforce available, but even then, are you ready to turn strangers over to your hard-earned customers? Of course not! They need to be orientated into your way of business. It takes time to break in a new hire. But, what do you do with this newbie when it slows down? What do your loyal techs think about adding another employee? They already know the newbie is a threat to their livelihoods when the work slows. So you lay off seasonal help, pay them unemployment, and your FUTA and SUTA taxes go up again. Maybe this new guy is too good to let go, so you keep him on and the techs start milking their time cards to make ends meet. This cheats customers and they go elsewhere next time. Business declines and all you really wanted was to capture the market in the busy season. So what could you do instead? Like many owners, you could put your tools back on and work yourself to death trying to gain those customers. How’s that worked for you in the past?
Let’s face it: good techs are hard to find. They’re even harder to find when it’s busy. They already have a good job and it’s going to cost you to lure them to your side. But what if you could hire them in slow times? It seems crazy, doesn’t it? This could be financial suicide ... or not.
Overtime is a key indicator of growth. It’s no “get rich quick” scheme, but healthy growth never is. Let’s reconsider the concept of overtime. In busy seasons your techs work overtime to gain as many new customers as possible. Those customers remember how you went out of your way to accommodate them in the busy season and they come back to you again and again. The techs get paid well with overtime pay and they don’t have to moonlight just to pay their bills. With the new customers, the slow season evens out and the techs don’t have to milk their time cards, the customers are treated fairly and remain loyal. Healthy growth begins to develop and soon your techs are working overtime in the slow seasons. This is the time to look for more techs. They’re more available, easier to lure, and there is time to train them. Even as your workforce expands, there will still be a few slow times to deal with; however, now you can afford to expand your horizons with marketing programs, accessory research, and those expansion ideas you always dreamed about. This is when there is time for valuable training to sharpen your technician’s skills and professionalism.
So what is the value of overtime? It’s the key indicator of healthy growth. If you are not taking full advantage of your daylight hours in the busy season, you’re losing customers and the company will be headed for decline. Your dispatchers are going crazy trying to schedule as much as they can in an eight-hour day. Your techs complain because they have too many calls. But if they are willing to work overtime, they build momentum and capture the customers that will call in the slow season as well. The techs won’t be complaining in the slow season because they don’t have enough work. This momentum builds better profits, and you can afford to pay more to keep your best techs. It’s a win-win situation for everyone.