This article is part of a three part series that takes a hard look at some of the business practices that have overrun the trades, including plumbing contractors. For better or worse, economic depression and the franchise model have affected the business model itself. Your grandfather wouldn’t recognize how service companies are run today. As eroding consumer trust and near panic level recruitment concerns come to forefront, we have to wonder how well these “best practices” are working. The primary question that we pose in this series is whether the short-term profitability of these tactics is worth the long-term costs to the industry.
Tying It All Together
If you have already read Parts 1 and 2 of this series, you might notice a common thread. A lot of what we are advocating is a cultural change in the trades. A culture of pride and excellence, one where we take our industries responsibilities seriously.
The final business practice that must come under review is compensation. In an odd way, compensation can sometimes define culture within a company. After all, the way employees see each other, their perception of organizational goals, and their execution of the customer experience is crafted by a lens that is shaped by money.
Setting the Tone
It starts with the hiring process. Consider how much of your interview time and training period are committed to discussions of sales goals and methods. How much of your appeal to that potential employee is a dialogue about their potential salary if they excel at sales. Not at being an exceptional plumber, but at sales.
Consider carefully the message this is sending to your employees. Ask yourself if your employees consider themselves plumbers or sales technicians. If your plumbers are salesmen first, think about the conflict of interest created between building trust with the customers versus trying to sell the customers something more. Their paycheck is directly tied to the severity of a homeowner's problem. That’s just not how trust is built.
Building Your Team
As the workforce development issue continues to worsen, a plumbing company is going to be defined by the talent of their team. That is one reason the apprenticeship model that I discussed in Part 2 of this series is so important. It builds that workforce in a way that is custom tailored to your business. Apprenticeships have a very hard time taking root in the commission culture.
There is a plethora of problems. Commissions create — at best — an every-man-for-himself culture. At worst, it creates an environment of cutthroat competition for the best jobs and dis-incentivizes more experienced plumbers from sharing their knowledge and training the less experienced. It’s not uncommon for more experienced technicians to “starve out” the new guy, because he is competition for dollars.
Second, it creates an uneven cash flow for the employee. With no guarantee of work, new guys with limited skills especially, can have a very hard time making a living during the slow times.
This creates an unstable future workforce, as many would-be plumbers leave the industry before they really get a chance to see if they are good at it, much less become licensed and create a career for themselves. And career plumbers are exactly what we need and are trying to cultivate.
Your plumbers must operate as a team, willing and able to help each other as needed. It’s not an environment based on friendships or alliances like some horrifying version of Survivor: Plumbers Island, but as a fabric of your culture.
Money Doesn’t Buy Happiness
Integrity and ethics are key components of professional pride. A plumber shouldn’t be stuck making the decision between feeding his family and a fair price for his work.
This undermines our road to rebuilding pride in the trade. It is also bad for repeat business. It may seem like a logical win-win for you, the business owner. Technician charges as much as they can get away with, they get a bigger commission sure, but you get a bigger ticket. Win-win. Except that customer, if left feeling gouged, will never use your business again. Congratulations, your future price of advertising just increased. New customers are more expensive than repeat customers, and negative word of mouth and online reviews … I can’t even begin to calculate the long-term cost of those.
The bottom line is that money is a terrible motivator in business. For the same reason you don’t want to compete on price alone, you don’t want to compete on compensation. Create a culture where working at your company has a purpose and is a positive experience and good employees will stay loyal. Just like good customers will. It’s a simple equation of fairness and standards that has somehow become lost.
Motivation is really the keyword. How are these plumbers motivated to help the customer? Are they motivated to do their best work or their fastest work? Are they motivated to teach and mentor? What is their mindset when they leave your office for their first job every day?
Where It All Comes Together
It’s really as simple as this: sustainable business practices. If you think it is getting tough to hire good help now … wait 10 years. We already have a talent shortage and no college is out there pumping out graduates for us. It is up to us. The burden is on our shoulders.
These three things: Titles, Training and Compensation are going to end up making us or breaking us as an industry. Implementing an apprenticeship program and recruiting into it means you can guarantee yourself a future workforce. Teaching kids — and adults — that plumbing — and being a plumber — is a noble and quality profession makes it that much easier to recruit apprentices. And finally, paying them a fair and even wage is the best way to keep quality talent and build trust in your community.
Your business can grow and thrive under these circumstances. Our family business is proof of that. We live and breath every one of these philosophies every day.
Take a few moments to pause and reflect on how many of your business practices today are focused on short-term profit versus long-term success. Remember, no one is going to do this for us. We have to build the future for ourselves.
Anja Smith is the managing partner of All Clear Plumbing Upstate, a service plumbing company in the Upstate region of South Carolina, where she oversees day-to-day operations, growth management, community relations, and marketing. All Clear is a family run organization that thrives under the joint efforts of a Master Plumber, a career banker, and marketing-focused business mind, also known as a husband, wife, and daughter. You can learn more about All Clear Plumbing's business philosophy at AllClearPlumbingUpstate.com.