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Contractor Q&A From a Nine Figure Business Owner
1 Playsin 20 hours
Hiring the right people can grow your business, while the wrong hire can cost you time, money, and momentum. In this episode of The Better Contractor Podcast, Brent answers questions from our Facebook community about hiring, interviewing, determining pay, and knowing when it's time to let an employee go. Whether you're building your first crew or leading an established company, you'll walk away with practical advice you can apply immediately. Thanks to Forestry Rentals for sponsoring this episode, and don't forget to subscribe and join The Better Contractor Facebook Group to be part of future Q&A episodes.
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Transcript
Episode Introduction
00:00:00
Speaker
Welcome back to the Better Contractor Podcast. This is episode 87, and in this episode, we're talking about hiring, we're talking about firing, and we're talking about interviews. All we ask, if you're on YouTube, hit that subscribe button, maybe even that like button. If you're on Spotify or Apple Podcast, hit that follow button.
00:00:16
Speaker
And then, of course, share
World Cup Discussion
00:00:18
Speaker
the show. Welcome back to another edition of the Better Contractor today. As the last, don't know how many episodes, 10, I am joined by my co-host, Alex. Alex, man, what's up? How much? What's new in your world? The World Cup.
00:00:32
Speaker
Yeah. Watching so many soccer games. You been watching them all So, no, I have not been watching them. Shocker. Shocker. If you know me, I'm not a sports guy. So when we're filming this, it'll probably come after after the come out after the World Cup's done. true um But it's right before the finals. So what's your prediction, then? Is this going to come out after?
00:00:50
Speaker
I don't know. It's going to be a very good game. um Both solid teams. Messi's insane, so I could see Argentina doing it. I've actually heard that name. There you actually heard of that before. You do know sports. Spain's favored, though. Spain's a good team, so who knows? Messi's little controversial right now. so Yeah? Why is that?
00:01:07
Speaker
um Just the debate. It's like like Tom Brady. When he was in the league, everyone hated him just because he's... Uh-huh. Tom Brady. The best? Yeah. The same thing with Messi. Everyone's finding different things, the fouls or whatever he's doing, saying the refs are helping him. Just like Tom Brady or Patrick Mahmoud. Yeah. How it goes. Okay. Have you seen all this stuff about the World Cup, though? Like the Norwegians all doing the row?
00:01:29
Speaker
I've seen some of that, yeah. um The – I can't even think of them. The the one dude's drinking the beer. Irish dudes? Boston. Not Irish. It makes more sense if they would be them. They're not Irish. No, what are they?
00:01:41
Speaker
don't know Scottish. You didn't know my geography. The Scottish people, they went into Boston. Boston ran out of beer. They drank all the Samuel Adams. um But it's cool seeing all of these other countries coming to America and we're just hanging out with them. Yeah, that that is cool.
00:01:56
Speaker
I saw a dude from Japan and Texas eating Texas barbecue. That's hilarious. That was awesome. It's just cool seeing yeah everyone coming America. just Hopefully it's showing them what America's all about. Yeah, they're seeing the good of America, not just what the news tells them.
The Importance of Timing in Hiring
00:02:11
Speaker
We're fun over here. We're good people, I promise. That's funny. It's awesome, though.
00:02:16
Speaker
It is cool. So what are we talking about today? We're going to talk about hiring and maybe even firing, interviews, all that fun stuff. So if your company's growing and your company's doing well, you're going be hiring. It's thing everyone has to do and thing not everyone loves. So I just wanted to hear...
00:02:34
Speaker
what you have to say about it. Perfect. so a lot of business owners wait too long to hire. They don't start the hiring process until they actually need the employee. Like I need this employee right now. going to start hiring for him.
00:02:46
Speaker
um How do you know when it's actually time to bring someone on or start looking to bring somebody on the team? That's a good question. So maybe I've oversimplified this in the past, but how I've always kind of looked at it is if I have, let's say I start with one crew.
00:03:02
Speaker
And I have enough work for that crew and they're working at least 40 hours a week. And then I pick up more and more jobs and it makes sense for a while to increase their overtime to 50. Maybe it even makes sense to go to 60.
00:03:15
Speaker
At some point, you're going to max out that crew. And at that point, you start bringing on, hopefully, once it gets to 50, you're bringing on some additional crew members. And maybe that means that that crew is too big for that moment. But what you're doing is you're investing in training some of your new people. So you bring on that extra two or three people. You're training them before you have the need to kind of add that add that second crew.
00:03:37
Speaker
But the goal is is that you're teaching crew number two to be like crew number one. And obviously, this assumes that crew number one is good. So hopefully, you've perfected crew number one, your first crew.
00:03:49
Speaker
And by taking your new hires for crew number two, that will be crew number two, and putting them with crew number one, you're spreading that culture. You're spreading that knowledge. You're getting uniformity amongst
Financial Considerations in Hiring
00:04:00
Speaker
those two crews. Because what you don't want to have happen is you have crew one, and that's your maybe you're probably on that crew if that's where you are.
00:04:07
Speaker
That crew is an A team. Everyone loves them. That's why you've grown your business. That's why you're growing it all. What you don't want to have happen is crew number two, you hire them, and they are not crew number one at all in a bad way. Because then you're going to ruin your reputation. You're going to have customers say, hey, we used you for this reason in the very beginning.
00:04:24
Speaker
But then we you gave us crew number two five months in, ah ten months in, or two years later, and we absolutely hate crew number two, and now you lose that business. So that's what you don't want to see. is adding an untrained crew that doesn't meet your standards or culture.
00:04:38
Speaker
um But what was your question? How do you know is actually time to bring someone on? So you're going to know that from a dollar standpoint, guys. So like I said, once you get to that 60 hours of OT, do the math.
00:04:50
Speaker
Once you start going over that too much, you are better off to hire another crew at regular time rates and instead of paying gobs and gobs of overtime out. The other thing to keep in mind with that is you're going to want to make sure you're billing and bidding in that OT rate as well to your job. So some people will sometimes bid jobs thinking, ah, we're to do all this on regular time or hope that they can.
00:05:11
Speaker
And then they get end up getting super booked. They have all these extra projects and they have to pay OT, but they never bid OT into their job. So make sure you guys are bidding that OT into your job at whatever percent you think that'll be. If that's 50 hours a week, you got to add that extra 10 hours. So I would say how to look ahead and kind of plan for it.
00:05:28
Speaker
You're going to want to make sure you're always training the next person. And that does mean that you're going to have some of that cost that you may have to eat in doing that training. But just realize that's part of what it takes to be successful and part of what it takes to do contracting.
00:05:43
Speaker
And then you're going build that into your overhead, though. So it doesn't mean you eat that cost. It just means that you need to have a training dollar amount that is allotted to your T&M sheet or however you bid.
00:05:54
Speaker
And that needs to include all of your overhead. And one of those overhead pieces has to be training.
00:06:00
Speaker
Awesome. So how do you decide what to pay somebody? Do you go and look at the competition and see what they're paying their employees? Or do you have like an internal type of structure you use?
00:06:12
Speaker
So I think you have to look at your competition a little bit. Now, do I think you base it off of that? I don't think you base it off of it. But I think for you to be competitive in your market, at minimum, you need need to know what your competition charges. You need to know what you're up against. You know what they pay. Because if you're paying hypothetically, let's say 20, but all your competition is paying 30, you're probably going to lose your employees to that competition eventually, no matter how good you are to work for, because $10 an hour amounts to $400 a week and $20,000 a year. So you got to make sure you're not doing that, but you definitely need to know what it is.
00:06:50
Speaker
But at the end of the day, you ask how do you decide what to pay somebody? You need to know your numbers. We talked about that on other podcasts before. You need to know, okay, a going rate for a good person in my industry, let's say hypothetically that is 30. So you got to build that cost in because that's where you need to be. Whether you want to be or not, that's what you need to be if you want to retain.
00:07:11
Speaker
Then you got to factor in all your overhead and that's going to be different for everybody. So if like for us, we're kind of a midsize company. For us, we have a decent amount of management compared to maybe someone that does what we do on a small level. And it may just be them. Maybe it's them and one other person doing their office and billing. Maybe they don't have even an office location they're paying for. They may be out there just, hey, we got this garage or this shed on the back of my property, and we're able to make that work. That person's overhead is a lot less than mine, so they're probably going to be charging a little bit less. But to know what to charge, you have to know all of your numbers, you're going to put that in there. Internal pay structure, this may lead to some other questions, but you absolutely have to have some sort of internal pay structure.
00:07:52
Speaker
I think it's important though to not let it be so definitive
Experience vs. Attitude in Hiring
00:07:56
Speaker
that it doesn't allow you flexibility. And what I mean by that is if you have someone come to you that is just, And we all have those once a while where you have like your your employees and maybe five is good, one is negative.
00:08:09
Speaker
Most of them fall into that one to five area. Ones you're probably going to want to fire. Fives you're like, got to keep this guy. Every once in while you're going to have an eight or and maybe a nine or a ten. And when you have that person come to you,
00:08:22
Speaker
Your pay structure cannot be so rigid that you cannot pay that person what they're actually worth. And that's one thing I would advise you guys to make sure you do. But you do need a pay structure. And the reason being is you don't want employees to get to where they have to come to you every time they want to raise. That is hard to do because we get busy. I've been there, done that. It's hard to do because it's just not something at top of mind. What it is on your employees' top of mind.
00:08:46
Speaker
And I would say what yeah what I would do there, get some kind of HR system. We, in the past, have used Bamboo HR, which is an app, We've moved more recently to a due. But inside of that, we can set reminders that, hey, we hired Alex in January of 25. And you can set up whatever you want. If you want to do monthly reviews, quarterly reviews, every six months or only annual, I would advise against annuals too too far apart. But also I would say don't make where employees expect necessarily that every single review equals a raise. Some of them just need to be reviewed. you can just sit down and talk about, hey, this is what we're struggling with.
00:09:22
Speaker
Where do you want to go? Here's how to get there. Answer some questions. Give them a guideline. Give them a path. I think that's important to do. I would say at least quarterly. But you do need to have some kind of structure there that they know, hey, this is how I climb the ladder. If I want to make 28 in a year and a half and I'm at 25, these are the steps to get there. You need to have that basically built out and not make employees have to ask for a raise. That's annoying on everybody's behalf.
00:09:46
Speaker
For sure. um When you're hiring, what do you think is worth more? Is it the person's experience that they bring with them or is it their attitude? Say they bring up the culture. They're just a fun hire that makes everyone love their job more. What what do you value or is there one you value more? So experience is important, but I would say as long as the person is coachable. So I would
When to Fire an Employee
00:10:08
Speaker
say coachability is probably the main thing we look for. Is the person a quick learner? Are they willing to try things and learn new things?
00:10:16
Speaker
If the answer is yes to those, I would say, and their attitude is good, I would say I would value that over experience alone. And the reason being, we've hired people just based upon experience, and they've been okay, but they end up not necessarily being your best employees. They have the ah skill, they have the ability to do it. sometimes they don't have the drive to do it sometimes they destroy the culture on the whole crew and then all of a sudden that experience doesn't really mean a whole lot when the other four or five people in that crew are now shit because they ruined it so you don't want that um so that's where i would say attitude and coachability are probably the main two that we look for that makes sense um let's move on to firing how do you know when it's time to just let somebody go
00:11:01
Speaker
I would say in your gut, you probably already know that answer. So I think a lot of times we overthink it. To complicate it and make it a little bit more of a long answer, what I would say is as a leader and manager, you should be kind of giving, we talked about just literally a few moments ago of doing these reviews and these feedback sessions.
00:11:19
Speaker
If you're doing that and doing that well, I think you should probably already know, hey, there's some there's there's some issues with this employee. That employee should also know I have some issues. My boss has some issues with me. um And this is where I want to be. But my boss has told me that for me to get there, I have to address these one, two, three different things. I think you should also have non-negotiables set up with your employees that, hey, we've got these little issues here, but you know what?
00:11:46
Speaker
there's Those are things you need to work on. And hopefully you work on them. However, there are some non-negotiables we have that are big, big, big red flags for us. And if those are not addressed, we are probably going to have to move towards terminating this relationship at some point. And I think that is an okay relationship to have because it sets what ah sets a standard, but it also lets the employee know, this is real serious. like I have to correct this, but I also have to correct the other stuff if I ever want to advance. So I think if you're having those conversations and then that non-negotiable is broken,
00:12:19
Speaker
then obviously your answer is you need to move on. Or, you know, I would recommend that you do a point system. We do a point system. Once so many points are built up, there's disciplinary policies for different ones and eventually also termination. You can get terminated without those points as well for big infractions. But at least there is a system there and there's a guideline there that employees know, hey, if I do this and this and this and this and I get all these points or I get these non-negotiables that keep breaking, I'm probably going to be moved on from. I think most of time we know it. I think most of the time people want or people delay it, though. And I think that becomes an issue whenever we're going through and saying, hey, we're going to keep working with this person.
00:12:57
Speaker
Been there, done that. And it's usually because we end up liking the person, but it doesn't mean they're a great asset or a great employee to have. And we hold on to people too long because we don't want to do that to them. And that's an awesome human characteristics to have. But is it best for your business? It probably
Sponsorship Message
00:13:12
Speaker
is not. And what we all know, and we've heard the you know the saying so many times that you've got to cut the cancer out, that's so true with employees. as i've seen Personally, I've seen other companies, I've seen so many different entrepreneurs go through that where they keep that one person, and that person dragged down drags down five other people, and all of a sudden you have a culture problem on your hands.
00:13:33
Speaker
want to touch on what you just said is the human characteristic of feeling bad. I mean, they have a family to feed. They need money too. you don't want to fire them. But that's a cause of their own actions most of the time. But other than that, why do you think so many owners wait so long to terminate? It's like they're they they keep giving them chance after chance after chance. of This is an example of companies, multiple companies I've worked for. give them so many chances and their company just tanks.
00:14:02
Speaker
So, yeah. So I think a lot of times people do it for the emotional thing, or they don't do it because the emotional thing. And I think the other aspect of it is they think they can't replace the experience the person provides. So we've been there before with that, where someone is a complete pain in the butt, and you keep them, and you keep them, and you keep them.
00:14:20
Speaker
And it's because, like, man, we don't have anyone else even applying that has the amount of experience they have. Or maybe they hit production like crazy. And you think, man, if I let this person go...
00:14:32
Speaker
Who takes their spot and and how do we meet that production that they met? But is that person ruining five other new people that could be equally as decent or maybe almost as decent? But is it is that one person holding you back? But to answer your question, I think a lot of it is either comes down to I feel like this is irreplaceable experience or this person's a pain in the butt at work, but i actually kind of like him personally and I don't want to ruin their life.
00:14:56
Speaker
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Interview Red Flags
00:15:18
Speaker
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00:15:27
Speaker
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00:15:40
Speaker
For more information, go to forestryrentals.com and inquire for a quote today. Let's move on from the bad part and move on to the good part. So on interviews, um what are some, are there any like red flags you see about a person either on their resume or on their interview?
00:15:57
Speaker
You can give some, give some notes to whoever's listening and not do. Yeah. So the biggest red flag is they hate everyone they've ever worked for. yeah So we've literally had people where, cause I don't really do the interviews for our company anymore, but when I did,
00:16:12
Speaker
The first thing I looked at, and if it wasn't filled out all the way or if there was gaps in time, I always kind of spent my first part of the interview there. And I would say, okay, in the last, you've listed five years worth of job experience.
00:16:26
Speaker
In those five years, you've been to eight different companies. I asked them point blank, tell me why you left each of those eight. And if every single time it was the boss is bad, the boss is bad, the boss is bad,
00:16:42
Speaker
Guess what? You're going to be the next bad boss, and that person is not going to stay with you. So that was something I always looked at a lot back when I did a lot more of the hiring. The other thing I kind of looked for was just attitude. So i would I was always okay with just shutting up, like asking a question. a lot of people are uncomfortable with silence.
00:17:02
Speaker
I would ask kind of a tough question, and then I would just shut up. And if there was silence, there was silence. Eventually, they will talk because they don't want that awkward silence in a job interview. But then when they talk, then you can usually get more honesty out of them. But I would ask those tough questions and just see kind of what their attitude is. I would give them scenarios of things like, hey, let's say this happens at work on a job site.
00:17:24
Speaker
What do you do? And just see what their answer is. I would give them some that are even a little bit ethically, I shouldn't say ethical. There's something that's a little bit controversial where it kind of gets down to like their standards and culture of themselves deep down and see how they respond and react to that one. And it tells you a lot about a person, but it also kind of gives that real world example and it takes it away from being a yes or no answer. And that's the last thing I would say. Move your job interviews away from being yes and no answers and just simply a review of the resume.
00:17:56
Speaker
make them actually have to give you answers that are a little bit more long-winded because that's where you're going to see who they really are. Another thing I would say for the most part, if you're doing the hiring or have someone doing your hiring that is pretty knowledgeable, or at least let that be a step. So for us, you know, the we kind of do stages of hiring. Stage one, they do meet with ah HR. Is our HR person like super knowledgeable about the field?
00:18:20
Speaker
They're not. But phase two with us is an interview that is more with someone in the field. And that's a fairly new thing that we've started doing in more recent years. But the purpose of that is because we've been screwed by people who tell HR, hey, I'm an equipment operator and I'm really, really good at X, Y, and Z. Well, then we get to the field they're like, they don't know how to even do a zero turn, let alone giraffe or a skid steer or an excavator.
Testing Candidates' Practical Skills
00:18:46
Speaker
So that person that's out there in the field, so we have project managers do that the last few years, they know those questions to ask, to be a little bit more specific and actually find out if they actually do know how to do that type of stuff that they say they do. So verifying, I think, is important. But then, like I said, asking those open-ended questions, seeing who they are see what their attitude, but more importantly, see see why they left. And the last part of all that, you have some sort of culture where you have values written on your on a board or you talk about them or not, you have culture. And it may be a bad culture. It may not be good. But the other thing I would make sure is that that person actually has some of your culture. Because what you don't want is you have a crew of five. You're hiring this person on to be the sixth crew member.
00:19:30
Speaker
Your a crew of five meshes well. They have their culture that works well. and you hire a sixth person in and that person completely destroys it, you don't want that. So I would try to figure that out as well. And I wouldn't be afraid to have multiple points in your hiring process instead of just the one touch point. So it kind of lets the person, when they first show up the first time, they're a little bit guarded.
00:19:52
Speaker
They're extra careful. they really want it the second time. Hopefully a little bit of that is down and maybe you get a little bit more out of that second one. So I would at least do two. An interesting take you guys did whenever I was, I was already hired, but I was still new. Noah and I were in the shop and Dan was kind of testing us to see our skills. And I thought the whole time he was just needed help with stuff. So he would give us like four tasks at a time. We'd go do it. And then he'd give us more. It was anything from taking the trash out to drilling and actually using tools and doing stuff. And after he goes, you guys passed. I said, what?
00:20:27
Speaker
He goes, you guys passed. I was giving you tasks. I was having you do stuff just to make sure you're mechanical and make sure you can listen to multiple tasks at a time. And I had no idea. So I thought that was an interesting take on, yeah like I guess, the hiring process-ish is just making it seem natural, but still watching them and making sure they actually know what they're doing. Yeah, and I think that's good. I don't know if Dan does this, but I've heard of some companies. They will purposely have like a situation like that. they'll have them like go take the trash out in the bathroom or something that that person may think is below them to almost just go see if they will do it or if they think they're above that type of work, which also kind of tells a little bit about who the person is. like you know you you should want You shouldn't expect someone else to take your trash out for you. If it needs done, just do it. You don't need a janitor
The Importance of a Thorough Hiring Process
00:21:11
Speaker
to do that for you. And it kind of also tells you, like do do they think they're better than that?
00:21:16
Speaker
Because if they do, it's probably gonna be problematic in the future as well. Yeah, it's a great point. I didn't even think about that part. Well, that's all the hiring questions I had for you, unless there's anything you need to add. No, I think that's good. Again, you know, a lot of people don't focus enough on this, I feel like, especially in contracting. I feel like a lot of times when you make a hire now, this is one of the questions we had either this time or last time was kind of geared around. I don't know when to actually hire.
00:21:42
Speaker
Sometimes it's so obvious you need an operator and you need that person to do a job that literally starts next week. So there's a lot of urgency to hiring a lot of times in this world. With that, I would just simply say, make sure you take the time to do the hiring process right.
00:21:57
Speaker
Do the training, because if not, it does add up. All that time that you spent training, all the time you spent hiring, and trying to find those right people. And then especially if those people that you hire end up kind of destroying the morale a little bit and culture that you have, or maybe they bring one or two good people down, obviously that has a huge cost.
00:22:16
Speaker
And I know sometimes it's like, oh shoot, like if i don't hire today and they start Monday, Does that mean we have to delay a project for a week? I've been there and I will always try to fight to keep projects on schedule.
00:22:27
Speaker
But am I rushing a hire that makes me 15,000 that week, but now I've lost two good employees And I've created all this other mess of issues got to deal with. If that's the case, take that extra week, do some training, make sure
Episode Closing
00:22:40
Speaker
they're right person. So that's the only really have to finish is make sure you're taking the time to do the hiring process right. That's totally fair. Well, we thank you guys for tuning in. um As always, if you're a frequent listener, you know what I'm about to say. Join our Facebook group. You can go to Facebook, go to the groups, look up the Better Contractor. It's right there. There's over 3,000 contractors in there now. Just there to network, ask questions, answer questions, just hang out. It's a good group of people. So join up the Better Contractor Facebook group, and we'll see you on the next episode. See you guys.