Production & Operations Sales & Estimating Technology Accounting & Financial Reporting Featured Posts KPI
Keeping landscaping team members motivated to continue working hard is essential given the state of the industry and how challenging it is to find new hires. Retention is the name of the game. But how exactly can you encourage workers to stay? And, on top of that, how can you continue to engage them so that they’re both hardworking and happy?
For many landscape business owners, the answer appears to lie with using landscape employee incentive programs.
Companies use employee incentive plans for a variety of reasons including meeting (or beating) sales or production goals, boosting employee morale, and rewarding employees for exemplary behavior.
The goal of any of these is to support the success of the company. By keeping employees happy and engaged, you encourage them to work hard—and that will have a positive impact on business. In fact, according to a study from Gallup, companies with highly engaged employees outperform those who do not have highly engaged employees by as much as 147% in earnings per share.
Let’s take a closer look at landscape employee incentive programs and how you might implement one to encourage engagement.
What Incentives Work Best?
We recently polled Asset landscape business software users to find out whether they were already using a landscape employee incentive program and if so, what it looked like. Many respondents said that they were using incentives to motivate their employees.
Some of the incentives that Asset users shared with us include the following.
- Monthly prizes like gift cards or company swag
- Bonuses when jobs come in under budget
- Salary increases upon a yearly review
While there are other incentives you could use such as time off, a free meal, or public praise, most employees are motivated by money. After all, earning a living is why they’re working for you in the first place. Incentives that involve pay raises or bonuses will be well-received and likely most effective.
A recent study by Genesis Associates, a recruiting firm, found that of all the various incentives employers could offer, monetary rewards earn the top spot. But no matter what the incentive was, the study also showed that employees appreciate them. Approximately 85% of survey respondents felt “more motivated to do their best” when a financial incentive was offered. And 73% of workers described the atmosphere as “good” or “very good” during an incentive period.
Put simply, financially incentivizing employees works and it can pay off for you, too. But first, you must know how to implement a program the right way.
How to Track a Landscape Employee Incentive Program
One of the main objectives of an incentive program is to incentivize employees for impacting the company’s overall profitability and success. Of course, in order to do this, you must be able to analyze budgeted hours vs. actual hours as well as other important production data in order to see how employees are performing.
Many companies are already doing this successfully. For instance, McHale Landscape Design in Upper Marlboro, Maryland, began offering a gross margin bonus two years ago in order to connect crew leaders to the bottom line.
Kevin McHale, company president, says that it’s often common for crews to feel disconnected from how they actually impact profitability. This employee incentive aimed to change that and demonstrate their impact. For every percentage of gross margin the company improves over the previous year, it splits half of that difference evenly among the foremen.
“The last two years we increased our gross margin by a half of a percent which is $100,000”, McHale says. “We split the $50,000 among our 50 formen, giving them each a $1,000 bonus at the end of the year.”
In order for this program to be successful, McHale shares updated gross margin data with crew leaders via quarterly reports so they can see how things are compared to the previous year. McHale says, plain and simple, this program wouldn’t work if it weren’t for a strong reporting system in which he could produce real-time data. Engaging with employees about the numbers throughout the year is an important way to keep them motivated. If you don’t do this, it’s very easy for the momentum to fizzle out. But if you’re able to show crew leaders just how close they are to hitting the mark, it will push them to keep going.
McHale says this is possible due to his use of Asset landscaping business software.
“Asset generates reports quickly and easily every quarter for us,” McHale says. “I would definitely advise you have a good system in place if you’re going to do this kind of program. You have to be able to show your employees the company’s profitability in real time, or else it might seem suspicious to the crews. You just don’t want them to think you’re making up your numbers. Transparency is key with this.”
Knowing Your Numbers
One survey respondent says: “We take the number of man-hours under budget for a job and multiply it by the actual labor rate for the job. The amount is split between the job manager and all crew members. The percentage split depends on the number of landscapers on the crew.”
Another shares: “We offer a bonus based on whether the project has a gross profit over the bid gross profit. The bonus is based on overall project cost.”
And another respondent says: “We offer bonuses if jobs come in under budget. It is usually 2% of the job total.”
The common thread among all of these is that in order to be successful, these landscape contractors must easily know their numbers. Otherwise, there is no way to ensure that these bonuses are worked out accurately. Several respondents expressed that when employees don’t understand the bonuses or feel as though they’re getting shortchanged in some way, it can actually have the opposite effect and de-motivate employees. That’s why it’s critical to be careful with this information.
Finding the Landscape Employee Incentive Program that’s Best for You
While there’s no question that incentivizing employees is an effort that’s going to pay off for you and your company, you must find the program that will work best for your business. In the end, it’s not so much about the exact details of your program as it is the fact that you’re doing something to show landscaping team members that you care—and that motivates them to continue to work hard for you.
You’ll have to work to determine what that means for your landscaping business.
For McHale, a gross margin profit bonus has been the answer and is something that he says the company will continue to do. But his advice is to find something, whatever it may be, that works for you—and make sure that you’re able to track whatever it is that you decide to implement.
The accessibility of data and the ease of running reports using Asset can help make these efforts possible. Instead of being something that becomes cumbersome or frustrating, you’ll keep your landscape employee incentive programs both understandable and effective with the right information at your fingertips.
Do you want more tips on how to track landscape employee incentive programs using landscape business software? Let’s explore and see what Asset can do for you.
Watch this Video to Learn How to Track All the Important Numbers for Your Landscaping Company
Image Sources: McHale Landscape Design