About two years ago, employee turnover at my pest management business spiked—as it did for many other small businesses. And the quality and quantity of job applicants dropped off. With 400 other pest control companies based in the San Francisco Bay Area, many employers compete for the same small pool of skilled pest technicians.
So in 2021, we came up with an idea that has made a big difference: offering a productivity bonus. Since introducing it last year, profits are up 8% despite a 4% increase in our payroll costs due to the bonus payments. Better yet, morale on my team has soared and employee turnover is way down.
Little by little, our technicians have developed a franchisee mindset, treating their book of customers as their own small business. It’s win-win for them—and for me. My only regret is that I didn’t introduce the bonuses sooner.
Faced with a staffing shortage, it became clear we had to work on our job applicant pitch. First, we had to better convey the benefits and fulfillment of a career that offers independence along with fun—but not insurmountable—challenges. It’s rewarding to save the day just by showing up and solving the client’s problem.
Next, we had to work on our compensation. How can we pay better than our industry average in a way that only rewards those who step up and work hard? That’s where we found the magic.
We started with some simple math. Our goal is for our team of 15 to 18 technicians to bill $150 an hour. So we began working with them to identify properties they serviced that didn’t allow them to achieve that billing goal. As a result, we raised prices on about 300 properties.
Then we focused on incentivizing our technicians. For every price goal they meet, they receive a percentage of the value of the work they perform. That percentage ranges from 2% to 4%, which can add between $1,000 to $1,400 in earnings a month to their paycheck—and our average technician now earns $65,000 a year including their bonus payments..
At its core, the program rewards the employees who work most efficiently and motivates them overall to do better. Initially, there was some skepticism that we were trying to “game” them. That went away quickly. As one technician—an early naysayer— told me: “Wow, this new system has given me a whole extra week’s pay for the same job I was doing before.” That naysayer is now one of the program’s biggest advocates.
We’ve also built in a few safeguards. If a technician gets complaints from customers, the bonus is dinged unless the issue is resolved. The same applies to excessive absences or unsafe driving.
Paying it forward
One surprising benefit of our productivity bonus program is the way in which it has improved communications and visibility across our organization. Before this, because we weren’t sharing the value of the work order, our technicians lacked important insight about our business model.
Now they are fully aware of the costs associated with each account and can be more proactive about how they do their jobs. If a customer is upset, for example, they will attempt to deescalate the situation. Or they will make suggestions about how to tighten up route density—because they know that drive time erodes productivity. Basically, the system has brought less chaos and more order.
This productivity bonus is helping to change our culture for the better, but I know it’s just the beginning. As we move beyond $4 million a year in revenues, I want to create a bonus structure for our office staff and managers. Giving everyone the opportunity to earn more for their hard work and good ideas will only lead to a stronger, smarter businessPrint this article