Achieving that goal would be a major change for Coastal, which currently uses eight sunroom sub crews whose compensation includes 10% of the room cost, minus the interior work; three concrete sub crews paid by the square foot, three window crews that get $60 per window, two siding crews that get 17% of the job’s cost, a gutter installer paid by the linear foot, and an electrical sub. Lee’s sun-room and siding subs are making between $70,000 and $80,000 per year, and his lead window installer earns between $120,000 and $130,000. Lee says that, to reap improvements on his bottom line, he’d pay his employee-installers less, but they’d be eligible for benefits and other compensation. “We’d like to have 401(k) and profit sharing.”
No Perfect Solution Having employees as installers isn’t the perfect solution. Joe Ronzino, director of retail sales for Holbrook, N.Y.–based Four Seasons Sunrooms, observes that by moving away from subs, which guarantee what they install, companies using their own people would need a “management-heavy” inspection system to make sure that their installers’ work gets done right. “You can’t just pay them on speed.”
Industry consultant Rick Grosso, on the other hand, has long been an advocate of contractors having employees install their products. The reason, Grosso says, is simple: Contractors need workers, and the larger workforce is dwindling. “Installers’ kids aren’t coming into the business, so you have to ‘create’ a workforce, just like you create a salesforce,” he says. He notes that employees who wear company uniforms and drive company trucks “build credibility” for contractors with homeowners.
Thompson Creek Window Co., a Lanham, Md.–based contractor that did 1,800 projects and $10.5 million last year, has been using 10 to 15 two-man sub crews. It’s now transitioning to employee-installers because, explains president Rick Wuest, employees can be used to greater marketing effect. “I don’t necessarily look at this as a cash saving,” Wuest points out. “In fact, it costs more to use employees in most cases. But I am looking at the residual impact —the advertising and credibility [employee-installers] create.” He notes that his company rarely receives the same levels of customer satisfaction on window, door, or gutter jobs (which are done by subs) that it does on siding jobs done by its employees.
Happy Client = Bonus Thompson Creek doesn’t pay subs or employees bonuses or other incentives, although Wuest eventually expects to, “to increase the pride and conscientiousness in our crews,” he says. Other contractors are also trying to discern if bonuses, as part of a total compensation package, keep subs or employees loyal, and actually improve their workers’ speed or the quality of their work. With more contractors putting installers on their payrolls, what constitutes a bonus is changing.
Most companies still use cash to reward productive workers. Coastal Empire pays its sunroom subs a $650 bonus for every $65,000 in rooms installed (Coastal installed 250 sunrooms in 2005 and expects to finish 300 this year). The company also pays its window general manager a $1,000 bonus for every $100,000 in windows installed (the company installed 3,000 windows that produced $2.5 million in sales in 2005, Lee says). Forty of Schmidt Siding & Window’s 52 employees are installers, and when they hit certain production targets they receive a $50 “trip credit” toward a company-paid vacation. Steve Beetch, who co-owns this Mankato, Minn.–based company, says that before this program began in 1997, Schmidt installed 3,000 squares of siding per year with six crews. “Now we’re doing 4,800 squares with four crews.”
Other companies dangle bonuses in front of prospective hires. Bethesda, Md.–based Case Design/Remodeling recently launched a recruitment drive to find 100 new employees, and offered a $1,000 signing bonus to all qualified carpenters and craftsmen. Those new employees would receive that signing bonus after 90 days on the job. “The incentive gets people to call us,” says Joe Divel, Case’s recruitment director. But during interviews with these prospects, Case emphasizes its benefits package that includes insurance coverage, holidays, tool allowances, a $750 annual education allowance, and in-house certified carpenter and kitchen training. “We don’t lose people because of pay,” he says. (Case also uses subs for additions, masonry, plumbing, and electrical, and pays them by the project.)
However, base pay can’t be minimized as a factor for installers. Management at A.B.E. Doors & Windows in Allentown, Pa., which has 16 installers on its payroll, recently found that out when it had to increase what it pays new hires — from $11 to $13, to $13 and $14 per hour — to keep up with the going rate in its market. A.B.E. pays its seasoned installers between $16 and $18 per hour, based on experience. Marc Rapchak, the company’s general manager, says that some installers would prefer to be paid by the piece, but he’s not hot on that because “we guarantee our work for five years, so I’m more concerned about quality than quantity.”
To that end, A.B.E. has a bonus program that’s based on the number of callbacks it receives, and the extent of additional work entailed by those callbacks. For every callback, installers are assessed a quarter point to two points per month. At the end of each month, installers with no points receive $200. Bonuses get reduced based on the point totals. Rapchak says that A.B.E. has found this program to be an effective training tool because it reveals why problems recur, and the company can then instruct installers on how to avoid them.
Customer satisfaction seems to be what more contractors base their installers’ bonuses on. Siding-1 Windows-1 pays subs between $50 and $500, depending on the project, if they receive high ratings from homeowners, Conforti says. Regency offers monthly incentives to its employees for such things as jobsite safety and complaint-free work. That incentive must be working, Kasunic says, because Regency’s “service ratio” has consistently been less than 5% a year. —John Caulfield is a freelance writer and editor based in New Jersey.