When starting out in the construction business, you wear all the hats in the company. You probably have few, if any, employees (not counting your spouse who is doing all that paperwork without being paid, but that's another story). You file everything in your head, your contracts are handshakes, and you're probably proud to work over 55 hours a week. But as the company grows, you'll need help getting everything done. If you want to maximize the use of your time, you'll need to find and keep the very best help available. One way to do that is by offering benefits to your employees.
Since we actually put people on the payroll (instead of calling them "subs" when they really weren't) we have to pay for such things as workers compensation insurance and withholding taxes. These things are benefits, even if people take them for granted. And as my company grew, benefits were added gradually. Here are a few we offer.
Flexible work hours. This can be harder for those in the field, but if you're in search of office help, consider offering a work schedule that accommodates the demands of raising young children (let's not even talk about the demands of raising teenagers). Or you might even consider letting your employees bring an infant or a sick child to work.
Holidays and vacations.Yes, you will need to offer paid time off. We provide ten paid holidays per year: the employee's birthday, Memorial Day, July 4th, Labor Day, Thanksgiving Day and five days at Christmas. We also have a tiered schedule for vacation time: 1 week after 1 year, 2 weeks after 3 years, and 3 weeks after 10 years. If you do the math, for a three-year employee, that's 20 paid days, or 160 hours. For a $15 per hour employee, that will amount to $2,400 (not counting tax and insurance implications).
Training. We provide direct training to our employees, and we support an employee's own continuing education efforts. Once a month we have a two-hour company meeting that includes safety and technical training. We give employees an automatic pay raise for completing certain product training programs on their own. We also send employees to trade shows at the company's expense. Each year, we spend about 40 hours of payroll per employee plus roughly $600 in travel and seminar costs.
Tool purchase plans. The company reimburses employees for 50% of the purchase cost for power tools, up to a maximum of $500 per year.
Health insurance. We pay a portion of the cost of health insurance for our employees. This is one of the most rapidly escalating costs of our benefit program, and currently costs us about $125 per employee each month.
SIMPLE IRA plan. This is a form of retirement plan. Participation is voluntary, and employees may contribute up to $9,000 per year. The funds are fully vested, and our company will match contributions up to 3% of earnings (the maximum allowed by law). So for an employee earning an annual salary of $30,000, this costs us up to $900 per year.
Profit sharing. We offer an incentive plan as a form of profit sharing. Each year we set gross profit goals based on both the volume of work and the intended gross profit percentage. The available incentive will be in ratio to our performance against these goals. We divide the pool among all employees based on the number of regular time hours worked. In recent years the amount has ranged from $1 to $1.50 per hour.
Stop thinking of benefits as expensive. Instead, consider them a cost of doing business with the best and the brightest. (If you don't, contractors like us will be around to siphon off your best people). You should run your business as well as you run trim or frame a roof — and benefits are a given at this level of play.