Employees the sequel

[bobmoore]

I guess I didn't see the need to close the employees thread from what I was reading, however I would like to give some input on the subject. Dave's original post was right on the mark but maybe missing the big picture. Shopbotters are constantly looking at the big iron companies and wondering how they can compete, but think of the employee problems they have when they are trying to motivate 100 or 200 or more people who don't care about their job. My quotes for work just went up substantially. Thanks for the reminders of training, osha compliance, safety meetings, sexual harassment meetings, and ect. Dave.
Bob

[khaos]

I guess we just can't tell the truth. About "things" that impact finding and keeping good employees.

[khaos]

I really am a bit annoyed. I had a nice post based on actual experience and It was deleted. I wonder if anyone had read it if we could have solved any of the issues. Perhaps found a solution that would be helpful to everyone.

Guess we will never know. :mad:

[bleeth]

FYI guys I wrote Nancy an email agreeing with her comment regarding politics and car engines and asking her to allow this renewed thread to continue as I do believe it is important to all small business owners. I hope she does, but it ain't gonna happen if the posts are off topic and/or frivolous.
Sorry Joe: I was running around all day and didn't get a chance to see your post.
In the meantime, I ask those who post to not make "cutesy" comments and actually be to the point. Nothing about this topic has anything to do with what you learned about car engines, what you think about current politics, etc. The issue has gone on through several administrations run by both parties, and for those who actually are still busting their butts to make a living, as opposed to those who are retired, or semi-retired it is a big subject.
If you are unable to do this, or are sitting there going "I don't know what he is talking about" I have asked her to simply delete those posts and allow the thread to continue. That includes responding to posts that are off topic. Just ignore them.

For almost all of you; thanks a million or two for your thoughtful responses. Please keep them coming.

[Simops]

I have a part time business and so a one man band but I also still work my day job as an aviator and have noticed over the past decade how many tradesmen have dropped their trade and become aviators. Wow!

At my unit there are 3 tradesmen that I know off, two chippies and a plumber. I asked them today why they gave up their trade. One chippie said that he left because the MDF dust he was inhaling was getting to him causing respiratory problems even though he used a mask......his boss couldn't give a toss about it. The other two ex-tradesmen said they could make 3 times the money for less hours work.....go figure!

My son is a chippie and works 7 days a week not because of the money (I work 4 days for trice what he gets) but because he loves the work......unfortunately these guys are becoming far and few between! He's always complaining about his mates who are tradesmen themselves but hate their work because they are wanting to earn more for less effort!!! The work ethic has changed.... That's fact, face it!

So as I see it quality work and the availability of tradesmen / craftsmen that can do it are constantly under treat because of the demand for cheap and nasty imports that the masses have become accustomed too. We are all guilty of this!

To keep good tradesmen and employees means paying more for them or being lucky to find someone who loves the work that much that renumeration is not the main aim of employment. Unless the demand for quality products among the masses is there it is hard to justify the extra cost of employing high-end (read...intelligent) tradesmen and employees.

Cheers

[bob_reda]

A piece on the local news. One reason you can't find a good employee is that the job market is not there. Retail furniture stores are closing at an alarming rate. reason- most folks in the us prefer price over quality. Now, how does that affect employees. I think you all see that with fewer demands for high quality furniture or cabinets, the workforce continues to get smaller. When young men and women in school look for opportunities for employment the trades are losing people because of losing work. There are not enough good paying jobs for them to consider, so another line of work is selected. Nothing wrong with their thinking, who would want to spend $150,000 on an education that will lead them to a dying art.

Bob

[bleeth]

There has certainly been a huge migration of furniture and cabinet manufacturing to other countries and the sheer numbers of job availibility has shrunk tremendously. But couldn't it also be said that the domestic job market is all that more attractive due to the core of clientele willing to spend the money for custom work that doesn't look like it came straight out of Rooms To Go?
My own challenge has rarely had much to do with having issues selling work. A marketing effort aimed at those who are the base for custom work and a built reputation in my market area yields all I need and then some. The manpower to build it though-that's the rub.
Major US manufacturing moving overseas is something the economists predicted many years ago. The pace has sure picked up in the last decade or so but the corresponding ability for builders to carve out a niche market not satisfied with overseas market has grown.
For a fact, although many of the shops in this area disappeared, as have many large plants in North Carolina, Michigan, etc, those who have adapted are backlogged.
Paying higher wages is not always the answer. One of my most dedicated guys is a lower wage man, but his abilities are and always will be limited. In some areas he is priceless, but there is only so much that can be paid and still result in a profit. I have always had paid holidays, earned time off, and worked with my men who had family emergencies or unexpected financial needs.
I'm perfectly willing to pay top scale to men who have the "spark" and show their ability to help productivity of the company. As has been noted by others in these threads, there are far too many who think that a reason to earn higher wages is because they need it, not because they help the company earn more money.
I just had to let a recently hired employee go yesterday. He has over 20 years in the industry, yet would show up to a project meeting without his drawings or even a pencil and pad, and was absent 20% or more in the three weeks he was here. His many years girlfriend has been ill and in the hospital. Although she was getting fine care there, he was of the opinion that his life was best served by sitting with her all day rather than working to earn their financial needs. Nothing I, my Office Manager, nor his co-workers said to him could change his mind. When I finally told him that either he reported to work or I was terminating him, instead of standing up to the bar, he replied that bosses don't give a d--n about empoyees anyway. That kind of victim attitude is all too common. This was after I had started his pay at what he asked for, loaned him money after 1 day of work, and didn't fire him after he pulled a no-show, no-call already.

[bob_reda]

While I certainly agree that there is a market of folks looking for quality rather than price, that market is shrinking also. So for a few shops in those areas, work would be good. But overall, that is not a reality, I have seen it on the internet over the years. When I first started on the internet there where maybe 1500 woodworking sites, now there are millions. In order to compete, everyone just started dropping prices, same with cnc services. Now, we are in what I call a flee market mentally. There is some truth to what that gentleman said, not necessarily about you, about companies,especially large corporations. It used to be that there was a loyalty between the boss and the worker, that is now out the door and bottom line is the boss. There is a mentality that once a project is done so are you. Stock market rises, the folks with money are happy. And whenever a business (woodworking) is listed as a hobby on a form 1040, that doesn't do much for the image.

Bob

[blackhawk]

Has anyone tried profit sharing in order to motivate their employees?

I will start off by saying that I do have an official and licensed business with my Shopbot, but I have never had any employees. My Shopbot business is just a side job. I have a full time job at a division of a Fortune 500 company. So my thoughts come from the side of being an employee at my full time job. I am motivated in my Shopbot business because the better job that I do, the more efficient I work, and the smarter I work results in higher profits for me.

In my full time job, I will get paid the same whether or not my project is profitable or not. That is a terrible mentality and I have to shake myself out of that thinking quite often. But, I think that is a real problem with employees including myself.

I have never worked at a company that did profit sharing, but in my mind that would definitely motivate me to do a better job. I would think that it could work something like this for a Shopbot business. Say, you quote a job making a set of cabinets. You have quoted in all your costs and your profit, that number is set. If you don't hit that number or break even, the employees make nothing extra just their normal wages. If you end up increasing your profit over your original figure, you split half of that with the employees. For me, as an employee, that would be a huge motivation to work faster, reduce waste, etc.

I know that in reality the profit sharing may get complex, but I think it is an idea to consider.

[bobmoore]

Brad; Now we are getting somewhere. Profit sharing can be an excellent motivator. Be careful though with a plan by the job. If the next job loses a ton of money, you can't take away money for that, so employees quickly learn how to "game" the system. Most employers learn to pay out quarterly or yearly profit sharing to average out the losers and winners. Still can be a great tool. Hiring and motivating employees is a learned skill not a black art as some believe. There are classes at many tech schools devoted to this but are usually billed as supervisor's classes. Take some and you will be amazed what you don't know. As a last resort you can contract out to an employment firm to take the responsibility for hiring, firing, or any number of human resource functions.
Bob

[bleeth]

I agree that profit sharing (which should never be on a job by job basis) is a great concept. Now let's look at the reality.
For a large corp that has stock, profits are declared as dividends. Have you been involved enough in the stock market to see the small percentage of dividends against share value?
Now let's look at the small shop (1-10 employees). First off, whether a sole prop (bad decision for an employer) organization or a sub-chapter S corp basically the boss is the owner. As the owner, unless he likes paying the government money, the structure of S corp by definition is that the corp never earns a profit. Profits automatically roll over as "owner equity" and either become assets of the company, as in cash reserves, or are withdrawn as the salary the owner gets.
In addition, one of the benefits of taking the risk of being an owner is there is also much that can be deducted as business expense against profits that are actually simply the owner purchasing stuff for himself, whether it be a new truck or car, tools for his personal collection, or vacations during which "business" is discussed. As the sole executive, the owner is free to give him and his family a "company paid insurance plan" as an executive incentive, which is then written off as a business expense against any gross profits and at today's insurance costs you can easily see where this is not small change.
So it is easily seen that profit sharing is only a real thing when the profits are figured in such a way that they actually exist.
If you think that this isn't fair to the employee's, note that many famous examples of "profit sharing" programs as incentives run amok are in the entertainment industry when the artists have ended up suing the producers because they didn't get a dime and LOSING in court.
Therefore, from the employee's view, it looks good up front, but once it is over usually causes more of the "the boss makes all that money and I don't get no respect" attitude that is one of the problems to begin with.
I have typically distributed bonuses at year end to employees ranging from a day or so pay to as much as an extra weeks pay to production workers based on my evaluation of their performance and longevity. The first time, due to a really tough year real profits-wise, that I couldn't do so, the next thing was I had my oldest and highest paid employee running around the shop telling everyone what a b_____d I was. In the meantime, I had cancelled our vacation plans due to tight money, told my wife I couldn't afford to throw our annual Holiday party for friends and employees, and was down to nearly nothing in my personal savings account since I had been plowing it into the company to pay for what amounted to employee complacency and expensive errors eroding gross profits. Do I need to mention the nights without sleep and the cartons of Tums I was going through?
This topic gets tougher and tougher. I'm not wanting to sound like the eternal pessimist, and do appreciate to the max all the thought that is going into the replies you all are making. Please keep pitching-We may not hit it out of the ballpark, but even a series of well placed singles can win the game.

[bleeth]

Let's look at what it takes to support a company. There is an old saying that to earn a profit as an owner you need 5 production employees to earn enough profit from each to make a living for one administrator. In the case of a small company, of course the administrator is the owner.
Also, as of over 20 years ago, when it comes to the cabinet business, the statisticians discovered that for a small company to be profitable (and this is assuming they are paying rent, insurance, utilities, taxes, etc) the average productivity of a production employee is that he is earning the company 125,000 to 150,000 per year gross. I don't know what that number is on average today, but I can tell you that it takes me more than 6.6 employees to produce 1 million dollars worth of installed cabinetry. So the bottom line is that either small shop employees today aren't productive enough, or other costs have risen so dramatically that the entire formula is out of whack.

What do you think?

[rb99]

I tried profit sharing once with an employee. The first large job went all wrong (totally his fault in a number of ways). He thought it went well so he was very disgruntled when there was no giant bonus for him. I would be careful about that slope.

[jTr]

Dave,
I think employee overhead is a heavy factor to be weighed. Workman's comp and liability insurance are the biggest impediments for me to bringing on even one part time helper. It appears things have evolved to this:

- The individual's well being is the sole responsibility of the public.
OR
- The individual's well being is the sole responsibility of the employer.

In the current state of affairs, the cost seems to be unreasonably excessive either way.

We've all heard the threats leveled by the disgruntled employee that rings out something like this: "I'll sue these people for millions and then I'll own this place..." This is the seed of two different weeds:

1. The disgruntled and injured do litigate, and do win disproportionate settlements. In essence, an injured or disgruntled employee is almost directly empowered to disable an entire business. I have seen this first hand, and the very individuals become self employed and perform all the functions they claimed in litigation that they were no longer able to do.

2. Based on the above, off-shoring of production becomes a very attractive option to continue operating a profitable business, if not essential.

I mean no offense to those who've been injured at work and have earned the right to assistance from the employer's workman's comp. Nor do I subscribe to or support the exporting of jobs. I am attempting to illustrate that it is not entirely the greed of the manufacturing industry or politics that contribute to the problem - our society's inclination to "win the lottery" based on a workplace incident is a very big factor in the deterioration of our manufacturing base in this country. Yet another damper thrown on top of the elusive concept of growth.

[harryball]

I find it best to contract. Reach an agreement on what needs to be done, pay when it's done, don't ever call them again if the experience was bad.

With all the overhead and regulation of having employees, I don't see how it would even be possible to discuss employee issues without getting into politics. Government is killing the job market by adding onerous burdens on top of the already complex relationship of employer/employee. It is no wonder employers do anything they can to keep from hiring more people.

The real question here is how do you engage the employees you have so they take ownership and pride in their work?

I can't fully answer that as it varies from person to person but having each employee "sign" their work, rewarding positive "right" behavior immediately rather than waiting, engaging in a positive way when something goes wrong (like accidentally breaking a tool) have all worked for me.

/RB

[myxpykalix]

With all the overhead and regulation of having employees, I don't see how it would even be possible to discuss employee issues without getting into politics. Government is killing the job market by adding onerous burdens on top of the already complex relationship of employer/employee. It is no wonder employers do anything they can to keep from hiring more people.

That was the point i was trying to make....:rolleyes:

However you can make all the incentives you want like "profit sharing" but unless you include "risk sharing" the average employee still expects to get their benefits of paid sick days, holidays, healthcare, and being paid on payday regardless of your profit/loss situation. They either need "skin in the game" to help you succeed or it's just a job.

When i started trade school after high school besides learning the automotive trade i learned woodworking and homebuilding. I paid for an internship at Suburban Homes where we learned how to build prefab homes. You built the outside walls insulation, wiring, plumbing, ect in the factory and then we took it to the jobsite and put it all together. We could have a 1200 sq ft house done in 3 days.

I paid them to work for free. In return they taught me all phases of woodworking, homebuilding, hvac, plumbing, electrical, roofing ect.
I had skin in the game.

With employees you need to build in incentives and disincentives ,
you reward them with bonus's for finishing ahead of schedule and give them nothing for falling behind. Why reward someone for what they are already being paid to do, if they don't do it on time?