With substantial pressure generated by shrinking margins and increasing costs, what recognition programs are dealers using to complement wage increases and retain solid employees?
— Dave LeMaster, Vice President, Associated Material Handling Industries, Inc. (Carol Stream, IL)
Ken MacDonald: As far as retention goes, it is imperative that you communicate to your employees how you plan to manage the downturn. The biggest thing employees want to know is that you are in control and know how to handle the economic changes that have occurred. Recognition should continue in good and difficult times. With the last ten years of economic growth and stock market gains, there is a half generation of employees who have never experienced a downturn and they will be very anxious. A strong plan and leadership will calm those fears and help you find opportunities for both your employees and company.
John Cosgrove: The present economic climate generates many new challenges for our industry. Shrinking margins and increasing costs are a reality that distributors will have to deal with over the next few years. In order to survive, each dealer will need to constantly examine each project and sale to determine whether that job is right for his or her organization. I can recall, many years ago, when interest rates were 17% and numerous dealers let profit margins slide in order to secure jobs. This was disastrous for many distributorships that believed declining sales would be offset with high sales volume at low margins.
Understanding that, in this market, allowing margins to slide on certain jobs is a given. However, a steady diet of this could place a company at risk. We have implemented an incentive program based on gross profit for each project. Each sales representative will receive a bonus based on performance, as it pertains to profit. However, each must meet his or her quarterly budget to be eligible. We are hoping this will keep our margins up and assist us in maintaining key employees.
Michael Dubbs: We provide our employees with two key benefits to complement our compensation program and to retain our key teammates. First, we provide a full medical insurance program including drugs, doctor’s office visits, and hospitalization. Almost 100% of the cost of this program is covered by Storage Equipment for our teammates, their spouses and dependants. We also match our teammates 401K contributions based upon company profitability. Historically, we match dollar for dollar up to the maximum amount allowed. We have found both these programs to be greatly appreciated and to help minimize turnover.
Bob Weeks: Recognition programs and retaining solid employees is a full time job even during good times. Although compensation is important, we feel that creating an excellent work environment with excellent fringe benefits goes a long way in keeping good employees. During tough economic conditions, it is important to communicate with your people and encourage them to go the extra mile. If you treated them well during good times and they understand the challenge, they will help you succeed through the tough times.