Employee or Right-Hand Man

Employee or right-hand man. Growing a construction contracting business.

Employee or Right-Hand Man

Employee with more to offer

Last time we looked at the problems involved with finding Loyal Employees.  This time we’re going one step further and suggesting that finding a Right-Hand Man or Right-Hand Woman is paramount to developing a construction business with hutzpah.

And right up front, I will let you know, this isn’t a position for which you can advertise. “Right-Hand Man Needed” won’t fly.

Employee Right-Hand Man samples

Bill Gates – Steve Ballmer

Warren Buffett – Charlie Munger

Beethoven – Ferdinand Ries 

While you’re likely to easily recognize the first names in this list, the second names are less well known. There’s a reason for that. The person who fits the role of Right-Handedness has different (yet all important) qualities than the person who runs the show.

Yet, jump over to fiction and it is unthinkable to refer to one without referencing the other.

  • Sherlock Holmes and Doctor Watson
  • The Lone Ranger and Tonto
  • Han Solo and Chewbacca
  • Woody and Buzz Lightyear
  • Smokey and the Bandit
  • Batman and Robin

What the writers of fiction seem to understand is the dynamic and balance of “the main guy” and the “sidekick” as a unit.

Employee or much more

Remember, I said you won’t be able to advertise your need for a Right-Hand person. Yet, there are ways you can begin to explore concerning finding the “just-right” person to fill the position. It’s tricky and there are no magic bullets, yet it can (obviously) be done.

Look close to home – family members, long-term friends, and employees are all candidates. Or, it could be a serendipitous meeting in coffee shop or at a party. Just remember the word “serendipitous” is limiting.

This is where “spreading your vision” comes into play. Who do you know who already believes in you and what you’re doing? Is there someone who has already taken initiative to assist you whether or not they work for you? Know someone who could answer the questions about your construction business with almost as much ease as you do? In short – who cares?

As a side note — we’ve found that trying to force this role on someone who doesn’t care (even if they’re family or friend) is a bad move. Fair warning.

Beyond Employee

The bond which takes place between the construction contracting business owner and the Right-Hand person is invaluable when coming to obstacles or hurdles in the path. Here are a few traits you can look for when trying to choose a person to fill the roll of number two. Someone who:

  • Looks for the greater good and the best outcome.
  • Proves to have the synergy you need.
  • May look as if he or she plays an insignificant roll but who is actually a change-agent.
  • Can generate possibilities and alternatives.
  • Has distinct leadership qualities.
  • Is capable of maintaining the conscience of the business.
  • Helps facilitate the values and the vision of the company.
  • Has a powerful work ethic.
  • Can aid you in maintaining focus.
  • Shows ambition for your business to succeed.
  • Is trainable and is a trainer.
  • Can be disagreed with and is capable of disagreeing with you. (No Yes-Men need apply.)
  • Holds his challenges of your thoughts or actions for private moments.
  • Is a is a cooperator and collaborator.

It would be nice if the person you’ve thought of as a possible contender had all the above qualities or traits.

It would also be nice if ice didn’t melt in my Coca-Cola.

So, yeah, you aren’t likely to find Mr. or Ms. Perfect, yet that shouldn’t stop you from looking for someone who is likely to help you become a better construction contractor.

When it comes down to it

Be on the lookout for someone who can aid you in multiple capacities as he or she takes over the position of Right-Hand Person.

What other traits do you think would be important for your Right-Hand Man or Woman to have in connection with the way you run your commercial construction business? Add them to the list.

 

The goal at Schulte and Schulte has always been to provide the best service and most up-to-date information as possible to our clients. We know we’ve hung our hats on an industry which is cyclical. Therefore, we’re determined to do everything in our power to see to it that our clients stay the course.

We hope this article (among our growing library of construction-centric informational articles) is helpful in assisting our clients to build better building businesses. Want to know more about us? Get in touch here.

Achievement-Based Bonus Programs That Don’t Stink – Part 2

Achievement-based bonus programs that work.

Achievement-based bonus programs that work.

Win, win, win

Once you’ve decided that embarking on an achievement-based bonus program will be beneficial for your team members as well as your construction business your next move will be determining which bonus initiatives will be most advantageous.

Typically, the considerations fall into two major categories – efficiency and profits. Or, reduced to its base level, time and money. Yet, there are a couple more categories which may help bring this matter into better focus. Retention and satisfaction. Retention of your best employees and the satisfaction level of your clients.

A well-executed achievement-based bonus program will be a win for your clients, a win for your team, and a win for your construction business. Yep, win, win, win.

Set the bar high for employee achievement

You’ve been told in the past to look for your clients’ pain points and determine a way to meet their needs. Good advice. Yet, have you considered your employees may also have pain points which need to be addressed? There will always be the WIIFM (What’s In It For Me) issue to consider. When devising your plan, be sure your employees will be rewarded well for their achievements. The goals you set for them should be easy to understand. They should know both what they’re expected to do and what they stand to gain if they do it.

And, while you’re setting the bar high, don’t set it so high no one could ever hope to jump “clear up there.” Plus (and this is the part that will ease your team’s minds) whenever possible, have graded levels of achievement. “If you reach this milestone, the reward you’ll receive is this.” And, “If you meet this even harder milestone, this reward will be on the table.” Plus, “This really tough to reach target will net you this reward.”

By the way, the rewards don’t necessarily have to be higher and higher amounts of money. But, more on that later.

Give the client more than they asked for

“I would like for this project to last longer than we agreed on and cost significantly more than expected”, said no client ever. Which translates into being done on time and not exceeding the budget is the bare minimum for meeting client expectations. But, what more could they ask?

Listening to your clients translates into detail or specialty applications and may mean improved functionality. Having a pulse on your clients, means you will likely learn of ways your team can perform better to improve the clients’ delight levels. Incorporate what you learn into your achievement-based bonus program.

Bottom line, communication with your clients can, and should be, what pushes your achievement-based bonus process.

How to implement a bonus program

At the highest level of implementation are two considerations:

  1. Motivating your employees to excel beyond their base job descriptions and regular duties.
  2. Exceeding your client’s expectations in both small and big ways.

Thinking of the above two considerations, use the 6 Ds to design your program.

  • Determine the objectives

 

  • Decide who will be eligible to participate (consider team or individual based)

 

  • Develop the achievement criteria

 

  • Devise the reward levels

 

  • Derive the funding formula (Where’s the money coming from to pay for this?)

 

  • Decree the method of payment

*There will be an example of using this method in part 3 of this 3-part series.

You’re not made of cash

You’re a nice person. You’re also a good business owner. You would like to give lots of great stuff to your well-performing employees. There is only so much money in your coffers. You have a dilemma. Or do you?

You may think the only thing your employees want or will respond to is cold hard cash. Yet studies show that isn’t always the case.  The author of an article found at Incentive Concepts states, “The best rewards experience, then, isn’t a matter of presenting the best rewards, but the best mix of reward, recognition, and experience.” It is an enlightening article based on studies conducted by the Incentive Research Foundation (IRF) and the Incentive Marketing Association (IMA).

Which incentives to give

Following is a brief list of possible reward options you can consider.

  • gym membership
  • golf trip
  • training or educational opportunities
  • company-paid family activity events
  • tickets for sporting events
  • additional vacation days
  • paid group meals
  • company branded mugs, hats, shirts, or jackets
  • chair massages
  • job site lunch delivery
  • tools
  • a magazine or audio subscription
  • car wash and detail coupon
  • ice cream socials
  • theater gift cards
  • concert tickets
  • entrance fees for industry related conferences
  • house-cleaning or maid service at their home
  • museum, zoo, or botanical garden memberships
  • gift cards

You’re likely to think of many other options, especially when you pay attention to what your team members are into. What are they talking about before and after meetings, while on the job site, or during lunch. What are they interested in? Where do they spend their time when not working? What are the ages of their children?

Bargains, discounts, and low-cost gifts

Be on the lookout for bargains and discounts on the items you’ll be presenting to your employees. The obvious option is buying while items are on sale. You can also ask for a discount when purchasing in bulk – even if the “bulk” is only a few dozen on some items. Discounted gift cards are a good option.  Another source for bargain priced gift cards is found here.

You can also consider gift cards in small denominations. Five or ten-dollar cards to local fast-food restaurants and coffee houses, plus slightly higher denominations for familiar department stores.

Get the crew talking – in a good way

Remember, the pleasure your crew derives from receiving achievement bonuses is three pronged. They want reward, recognition, and experience.  Following is a list of fun or different gift items sure to get people talking – adding more to the experience part of receiving the bonus.

Extraordinary shaving items

Gentleman Barbarian T-Shirts

A variety of products found at The Art of Manliness

Give some fun from Etsy

Sleeve notes (you know who needs this)

Key finder (another of those products best suited for certain members of your team who most “deserve” or need them)

Consider the gift of home cooking made easy here, here, or here.

And of course, rubber duckies.   You decide how and when you pass out these little lovelies based on . . . well, who knows what! They’re just for fun.

Perhaps you can start a rubber ducky tradition, similar to the golden banana award tradition. If you don’t already know about the Hewlett Packard Golden Banana Award each of these articles includes the story. New York Times.   Smart Business.   Cindy Ventrice on LinkedIn.

If you missed part 1 you can find it here.

In part 3 expect expanded information concerning how to implement a bonus program based on the 6 Ds mentioned above. Plus, there will be a simple example of the system used in “real life.”

Call today to get in on the Schulte and Schulte accounting advice you need. 866-629-7735

Employee or Independent Contractor? Recommendations for Compliance

The following is a guest post courtesy of Lynda McKay owner of HRextension.

The construction industry has been and continues to be under the microscope when it concerns how employers pay workers: as employees (W4) or as independent contractors (W9 or 1099ers).  The two governing entities that regulate and monitor this are the Department of Labor (DOL)/Wage & Labor/Fair Labor Standards Act (FLSA) and the Internal Revenue Service (IRS).  Both federal agencies only provide ‘guidance’ to employers in making this very important determination, leaving employers at risk for non-compliance and potential costly fees.

While an employee (EE) and independent contractor (IC) ‘look’ the same in the workplace or on the worksite, classification of each is very different.

Roles Defined

EMPLOYEE: An employer must be accountable for overtime pay, unemployment compensation, workers compensation, income tax, Medicare, Social Security deductions, eligibility verification to be employed in the US, minimum wage requirements, providing resources to do the job and potentially, paid time off, paid sick time and/or health care and retirement benefits.

INDEPENDENT CONTRACTOR:  An employer is not accountable for any of the above listed under ‘Employee’.  Instead the employer processes payment via a W9 and a signed Independent Contractor Agreement.

Thus, there is no mystery, considering the numerous many reasons, why an employer might lean toward the independent classification.  And there are true benefits when utilizing an IC specifically when the work is truly a short-term project that could transition to current staff employees.

In April 2015, federal courts in Utah and Arizona approved consent judgments against 16 defendants operating construction businesses that misclassified employees as “member/owners.” These judgments awarded $600,000 in back pay and liquidated damages to affected construction workers, plus $100,000 in civil penalties.

Another issue in misclassifying construction workers, is recruitment and retention rates suffer. Top level candidates do not want to be cheated from all the employee status related benefits.

How can you tell if a worker should be an employee or an independent contractor?  The DOL Fact Sheet 13  provides six (6) factors to consider when determining if a worker should be compensated as an employee:

“While the factors considered can vary, and while no one set of factors is exclusive, the following factors are generally considered when determining whether an employment relationship exists under the FLSA (i.e., whether a worker is an employee, as opposed to an independent contractor):

  1. The extent to which the work performed is an integral part of the employer’s business.
  2. Whether the worker’s managerial skills affect his or her opportunity for profit and loss.
  3. The relative investments in facilities and equipment by the worker and the employer. 4) The worker’s skill and initiative.
  4. The permanency of the worker’s relationship with the employer.
  5. The nature and degree of control by the employer. “

What does all this mean?  Yes… it can be complicated.  The below table can serve as a ‘guide’ to assist.

If you have more Yes answers than No Answers, this is most likely an employee.  Not an independent contractor.

Additional resources can be located here.  

It is irrelevant if the worker wants to be an IC.  It is not an arbitrary decision for the worker to make.  Governing agencies do not care if employers have a signed contract where the IC agrees to be an independent contractor; even if the worker obtains a business licenses with a state or other local government entity.

The US DOL, IRS and courts do not care about ‘intentions’ of either the employer or the worker. Even despite a signed agreement, a worker who willfully and knowingly enters a working relationship as an independent contractor can claim misclassification later and collect damages from the employer.  

Potential Damages

If an employer is found guilty of misclassifying a worker as an independent contractor, the penalties can be steep.  Just some of the fines can contain any overtime worked, any unpaid wages if minimum wage rate was less than required, employment taxes.  Willful attempts to avoid minimum wage and overtime obligations, can be up to $10,000 per violation.  Do not forget the additional employment attorney costs

What Employers Can Do Now

    • Know the rules and document the firm’s relationship with an independent contractor.
    • Keep all documentation and review it annually to ensure that it is up-to-date.
    • Conduct internal audit of all employees and independent contractors with the help of qualified HR professionals.
    • Ask independent contractors to provide evidence of insurance, business location, business license and a list of other customers.

Help Needed?

The DOL and IRS are not slowing down on identifying misclassifications. Understanding the FLSA and IRS factors tests are not always clear.  If at any time you are unsure about your classification decisions, HRextension can provide the guidance and support you need.

Lynda’s expertise includes employment practices and policies administration,  job description review and development, employee performance development, compensation assessments and conflict resolution through mediation and training. Her ultimate goal is to assist her clients in maximizing their investment in the human capital component of their organizations.

You can get in touch with her here.