There’s no question about it: Everyone I talk to these days recognizes the labor shortage as the the elephant in the room.

Four weeks of meetings with more than 75 owners of remodeling companies made clear that sales are booming but, without sufficient labor to meet the promised schedules, both profits and customer satisfaction fall. Regardless of whether the labor is handed off to independent subcontractors or performed by in-house employees, there simply aren’t enough skilled trades people to produce the work in a timely manner.

I’ll let others discuss industry-wide solutions; my focus here is on your company and your labor shortage. The question is: How will you find and motivate good field employees? I believe the answer lies in two areas—money and culture—where I bet that you’ve received misleading advice.

Maslow vs. Pink
No doubt you’ve been told that money isn’t the primary factor that drives people (unless you’re Bernie Madoff). This school of thought cites Maslow’s hierarchy of needs to argue that humans seek love/belonging, esteem and self-actualization. Compared with early 20th century management views that sanctioned berating and order-giving in exchange for a pay envelope, management ideas drawn from Maslow were quite a change.

But recently, a respected organizational psychologist with an impressive resume (last week she was invited to speak at Stanford Business School) brought me into the 21st century when she said, “Maslow is old school. The new school is Dan Pink, the author of Drive.”

In his TED talk, Pink explains how things have changed. “That new approach,” he says, “relies on giving employees three key things: Autonomy over their work, a feeling they can achieve mastery, and a larger sense of purpose.”
But before he jumped into that discussion he said this: “First you’ve got to pay people adequately and fairly–get money off the table.”

Let me repeat that more forcefully. If you want happy workers, GET MONEY OFF THE TABLE!

What Others Don’t Offer
Pay people a living wage and provide sufficient benefits, health insurance and time off to attract them to your company in the first place. REMODELING’s breakdown of benefits at the 300 large, full-service companies showed that:

• One quarter don’t provide health insurance;
• One-third don’t provide a retirement plan;
• Three-fifths don’t have dental insurance;
• Three-quarters don’t have disability insurance;
• Three-quarters don’t pay anything during maternity/paternity leave.

So, build your company labor budget to provide the most generous wage and benefit package in your local area. Teach your employees exactly how much additional non-taxable dollars those benefits add to their gross wages. Celebrate the fact the company can afford to be so generous because of their hard work.

When the word gets out, your employees will bring equally good workers to your door. I applaud the owner of a company who says, “We did our research and we pay our employees 5% more, in total, than any other remodeler in our area. And people send US their resumes!”

Ultimately, Cheapskates Can’t Win
To do that, you can’t be teh cheapest remodeler in your area. No high-end remodeler that I know of has succeeded on a low-margin, high-volume model. High-end remodeling is never cheap!

Build the company budget to include these additional costs, to develop sufficient profits to protect the company over time and to pay yourself a reasonable salary and benefits. Then calculate the volume and margin required.

Next, as you get your pay to the right level, develop a strong company culture to keep the best staffers. This is where autonomy, mastery and purpose come in.

Sounds simple, right? Nope. Nothing in the world of employee motivation and engagement is simple, because human beings are complex; relationships both inside and outside the workplace impact performance on the job. A business owner must develop an intricate web of processes and personal empathy to successfully manage these complex interactions.

Answer the “Why?” Question
Pink’s TED discussion of autonomy probably won’t work 100% in remodeling: lots of your employees can’t work from home or set their own schedules. But a culture in which mastery is valued fits right in with the identification of the company purpose.

Most remodelers define the company purpose too simply, saying things like “We strive to be the most sought-after remodeler in Benson Bay.” That doesn’t address the big question of “why?” Answering the “why?” can clarify the purpose … “Because our clients live better lives in healthy, well designed and built spaces.” Or, “so we can make buckets of cash, pay our people well, and build a better community.”

You’ve probably heard the story of two stone masons working on a cathedral in the Middle Ages. They were both asked the same question: “What are you doing?” The first said “laying stones.” The second said “Building the most beautiful cathedral in Italy.” The first was doing a job, the second had purpose.

If purpose is difficult to clarify, mastery is tedious to obtain—it requires continued practice with the goal of continued improvement. It takes 10 years, according to Pink, to truly “master” a practice. But that mastery, in service of an employee’s sense of purpose, leads to greater self-esteem.

All things being equal, employees with greater technical skills and greater self-esteem produce more, more efficiently and maintain better relationships with others. There are many ways to build purpose and mastery into a remodeling company.

School Your Workers
One successful company holds a quarterly university to upgrade field employees’ skills. It is a considerable honor to be invited, by your peers, to teach a topic at these meetings, held Saturday morning from 8 to noon. Breakfast is served before and a drawing is held to win gift cards, not just from Home Depot. A “passport,” given to each new employee at their orientation, is stamped at each quarterly session and reviewed during the bi-annual employee review. If the employee has two stamps for that six-month period, they demonstrate sincere desire for continued improvement. This can lead to promotions, raises and the ability to teach a class down the line.
Another way to encourage mastery is to build mentoring into the field system. When a new employee shadows an experienced field worker, his/her skills are increased and they learn the company culture and operating systems. Even long-term employees benefit from a bi-annual round of mentoring and being mentored.

These ideas take time to implement successfully and cost money, but as a high-end remodeler in a good economy, take this opportunity to make your company the very best place to work in your community by building and maintaining a well-paid and exceptional culture for your employees!

Full steam ahead – there’s no time to lose in building the company that draws people to you!