Part 1 – By Ron Pestone
When it comes to bonuses there are two schools of thought out there in the construction industry. One, I am paying my people to do a job, they do the job, I pay them and that is the end of the story. Two, any of my people in key positions who contribute to my bottom line is entitled to something extra besides his pay check.
The only business I really know is contracting, to be more precise subcontracting, and I for one am a member of the latter school. I have listened to many subcontractors who over the years do not believe in sharing anything with their people. They claim it spoils them or at best they start thinking they are entitled to it. Or it makes the other guys jealous which in fact hurts production. Their biggest beef is that they feel they are already paying too much in hourly wages to their guys so why should they pay extra to their guys for just doing their jobs.
More often than not the guys who are staunch advocates of not giving their guys any bonus money are living a life they never dreamed of, expensive cars, boats even planes. Beautiful houses, exotic vacations and the ability to dine in expensive restaurants any time they please. They give their spouses expensive gifts and send their children to the most prestigious and expensive universities in the country. In short, they are living large.
These same guys have a difficult time understanding that all of what they have comes from their business and that their business would not have the ability to feed mice without the people in it.
Subcontracting is just another word for assembling and all that assembling not only takes talent it takes people. Subcontracting is labor and the path to successful subcontracting is a wise and prudent method of managing labor. It takes a team to produce a successful contract from the estimator who estimated the job, to the purchasing agent who bought out the job, to the Project Executive who managed the Project Manager who submitted all the bits and pieces necessary for the assembly, to billing and managing the project, to the Superintendent who supervised the Foreman whose task is to install the project in the allotted man hours, to the layout man who took the drawings and converted them to the actual road map for the lead man and all the guys and gals in the field who actually build the project.
Without all these guys and gals you have nothing because there is nothing to bill. If you are a one man show with a tool belt and a pickup truck you are all of them rolled up into one. If you are a huge subcontracting firm every one of your projects has a team similar to the one just mentioned.
It is all well and good if you are the owner of the subcontracting firm riding around in a luxury car, smoking cigars and looking important but you should never forget without your people you would be lucky to be riding around in a rickshaw.
How do you think your people feel seeing you living the high life while they are struggling to make their mortgage payments? Oh, I know, your workers like all construction workers are some of the highest paid hourly workers in the country. I have heard this so many times I could puke. Let’s look at the whole picture. All the trades require their people go through a lengthy apprenticeship program which may take as long as five years to develop a talented journeyman. All through the apprentice years the apprentice is making a lot less than the journeyman and in fact when he starts his apprenticeship many times he is making little more than someone working in a fast food chain. In addition during his apprenticeship the apprentice is required to go to night school and pass all the required tests.
By the time a young man or woman becomes a full journeyman they have put in their time and have paid their dues. To get into an apprenticeship program today a kid has to take a test and some of these tests are as hard as the SAT’s. You have to have a high score to get into the program and once you get in its going to be a long hard road to get to the end and only the most dedicated make it through.
All right, so we now know it’s a long road to get to be a journeymen but what about the high hourly wages and benefits they make? That’s the part so many have a hard time getting over. It’s like the old joke, a customer calls in a plumber to fix his toilet, the plumber comes in fixes the toilet and gives the customer a bill for $400.00. The customer cries, “that’s a lot of money, I’m a doctor and I don’t make that kind of money”. The plumber smiles and says I know, I used to be a doctor.
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