There comes a time in almost every landscape company owner’s life when they get more customers than they’re able to service by themselves or with family members. At that point the owner is faced with two big questions: Where do I find a competent employee? How much should I pay that person?
From that moment and until the owner sells their company, passes it along to a family member or trusted employee or dies, he or she will likely be asking themselves these same two questions. They go hand-in-hand and are influenced by a lot of variables, one of the largest being the unemployment situation in an owner’s market area, i.e., the availability of qualified, employable individuals.
The labor market is tight now, the tightest it has been since 2007. Business owners in more prosperous regions of the country describe today’s labor situation as “an employees’ market.” Data collected and monitored by the U.S. Bureau of Labor Statistics bears this out.
Throughout the first quarter of 2016, the U.S. unemployment rate hovered just below 5 percent. Compare this to 7.7 percent as few as three years ago. But, as hinted at in the previous paragraph, the availability of employable job prospects varies substantially from region to region, as well as how much it will cost a company owner to employ them. Geographic location is the biggest factor affecting pay for landscape and lawn service employees.
This is evident in reviewing the results of industry-specific compensation surveys conducted by PayScale Inc., a human capital company headquartered in Seattle, Washington. PayScale partners with HR technology companies, service providers and professional associations to bring modern data and on-demand software tools for easily managing compensation for businesses.
According to PayScale, here is the U.S. “average” hourly compensation for several key positions within landscape and lawn service companies:
- Laborer: $9.94 per hour, ranging from $8.36 to $12.31 (with overtime, $12.79 to $16.91), based on 1,202 responses from individuals.
- Foreman: $14.99 per hour, ranging from $11.15 to $20.29 per hour, based on 886 individual responses.
- Designer: $12.53 to $30.58 for an annual salary of $42,832, ranging from $31,147 to $61,951 annually, based on 359 individual responses.
While these results are interesting, and PayScale’s website provides other insights on employee compensation (for example, benefits), the survey results hardly answer the question of how much the owner of a service company has to pay to attract and retain a dependable, reliable employee, and this regardless of position.
We’ve all heard stories of owners grumbling about losing employees to competitors promising as few as 50 cents more per hour. Perhaps you’ve experienced it yourself, being poached or luring key employees from competitors yourself. The practice is commonplace in all service industries, and accepted for what it is: the free market at work.
Read more: How Do Your Wages Measure Up?
The fact is, the hourly rate or salary we offer and pay to an employee, although very important—meaning you have to pay at least a rate competitive to the market—is just one of many factors that prospects consider when signing on with you or sticking around until the end of the season or from year to year.
Opportunities to learn new skills, the possibility of career advancement, a certain amount of job flexibility, appreciation—all of these are weaved into the fabric of your company culture. These are more powerful incentives to attracting and retaining employees—at least the loyal, reliable employees you want—than paying your employees a pittance more than your competitors.
Read more: Benefits Your Employees Want