By Phil Harwood, Esq.
The snow business presents unique challenges for employee compensation, bonuses, and rewards. I’d like to share a few thoughts in this brief blog. And I would like to invite you to register for this month’s free webinar, being released Tuesday, November 10.
Put Pay Rates in Writing
For snow, it’s important to clarify pay rates in writing so that there’s no disagreement later. However, in doing so, be sure to explicitly state that no employment contract is not created or assumed. This is important because employment contracts supersede at-will employment protections for employers. A good rule is to always have an attorney review employment documents to ensure that your interests are protected.
Market Rates
Setting pay rates for snow presents challenges also. Understanding market rates is extremely important. But what are market rates for work that is on-call 24/7, often at night, and often with no guaranteed hours? What is the comparable market for this type of work? Knowing what your competitors are paying is often the best way to assess market rates.
What Can You Afford?
Of course, knowing what you can afford, based on your pricing and financial budget is another consideration. If you have been signing contracts all year based on a specific hourly selling rate, which is based on a specific hourly cost, that’s what you can afford. Paying more than this will erode your profit margin.
Annual Pay Review
Pay rates for snow should be set after conducting an annual review. This review is usually conducted in early summer before recruiting begins for the upcoming winter. As the recruiting season progresses, further adjustment should be made if necessary.
It’s important to be open and flexible during this time. There is fierce competition for talent, so you need to be aware of what your competitors are doing. And of course, competition for talent extends well beyond our industry.
Keep in mind that market adjustments will need to be made to your current employees as well, so that there is not disparity between current employees and new employees. Employees who neglect this important step run the risk of alienating their full-time, year-round employees.
For clarifying pay rates for subcontractors, please watch our August webinar.
Beyond what to pay employees, many questions remain about how to pay employees and when to pay them. We will discuss paying cash, snow bonuses, and other reward systems on this month’s webinar. In addition, we will discuss best practices for compensation and reward systems for all aspects of employment, not just for snow.
Please consider viewing our free webinar (releasing Tuesday, November 10), where we will go much deeper into this topic. Hope to see you there!
Now go forth.