We continue to get reports and see signs of an improved economy, which is what we’ve all been waiting and hoping for! But as we continue with our cautiously optimistic economical revival, there also comes a whole new set of challenges. What are some of the business operations that must be adjusted as continue with this up cycle?
1) If you’re not already recruiting and training new employees, do it now! 6 months ago the IEC had 30-40 excess apprentices in our program. Now there are only a couple (we do have plenty of inexperienced people available). IEC is recruiting heavier now than in the last 6 years, but each contractor must have their own active recruitment plan.
2) Look at your current workforce and determine who can move into a supervisory position. Then, get them the training they need in management and leadership so they will have the skills to succeed in their new responsibilities. Good technicians do not necessarily make good lead or supervisory employees, but with some training, they can learn the new skill sets that will be needed to make them successful.
3) Update your cash flow projections. It has been said that an uptick in the economy is when the greatness number of contractors will go out of business because they do not have the proper cash in place to ramp up for new jobs.
4) Take your updated cash flow projections and meet with your banker, or other sources of cash, to assure that you will have the financing in place when you need it.
There are certainly other areas that may need to be evaluated, but you probably already know these areas, just as you have been through the “up” cycle, though it may have been awhile.
As the construction industry continues (be it tepid) to rebound, finding skilled workers will become increasing difficult. In fact, the labor shortage that we experienced in the mid 2000’s will pale in comparison to what we will face in the next several years.
With that in mind, there are really only two strategies you can use to grow your workforce: train new employees or find experienced workers. These two approaches are certainly not mutually exclusive, nor is one right and one wrong; however companies tend to favor one over the other.
Many contractors will say that they prefer to train the workers themselves from entry level so they have the right skills and knowledge. This is a great philosophy; however, based upon your manpower needs, you may not always have the time to send them through a 4 year electrical apprenticeship program.
Let’s acknowledge that there is no one “silver bullet,” therefore, the chart below provides some ideas to fulfilling your manpower needs in finding both new workers and skilled workers already in the electrical industry. No matter what strategy and methods you use to find workers, the most important aspect of the process is to have a well thought out plan for workforce development, and then give it priority by working the plan.
As you review this chart, you will probably notice that many ideas are technology related because more and more, our society and job hunters, are moving to handheld mobile devices (phones & tablets) to stay connected in their everyday lives.
Anyone in construction will know about MSDS (Material Safety Data Sheet), but few are aware that OSHA is modifying the Hazard Communication Standard (HCS) to align with the provisions of the Globally Harmonized System of Classification and Labeling of Chemicals (GHS) that was officially adopted by the United Nations (UN) in 2003. Here we are a full ten years later, and it will actually take affect with a stinging $2,500 fine to contractors for each employee who does not: 1) recognize the symbol, and 2) know the appropriate action to take beginning December 1, 2013.
Why adopt the new GHS?
It was designed to replace various classification and labeling standards used in different countries by using consistent criteria for classification and labeling on a global level. While those systems in different countries may have been similar in content and approach, they resulted in multiple standards and classifications and labels for the same hazard in different countries. Given the extent of international trade in chemicals, and the potential impact on neighboring countries when controls are not implemented, it was determined that a worldwide approach was necessary.
What are the major proposed changes to the Hazard Communication Standard?
• Hazard classification: Provides specific criteria for classification of health and physical hazards, as well as classification of mixtures.
• Labels: Chemical manufacturers and importers will be required to provide a label that includes a harmonized signal word, pictogram, and hazard statement for each hazard class and category. Precautionary statements must also be provided.
• Safety Data Sheets: Will now have a specified 16-section format.
• Training on label elements must include: Product identifier; Signal word; Pictogram; Hazard statement(s); Precautionary statement(s); and Contact of manufacturer, distributor or importer.
Who does it affect?
It is estimated to affect over 40 million workers in 5 million workplaces for any consumers, workers or transporters of hazard materials. Other U.S. Agencies involved include the Dept. of Transportation (DOT), Environmental Protection Agency (EPA), and the Consumer Product Safety Commissions (CPSC). Check the OSHA website for details at http://www.osha.gov/dsg/hazcom/ghs.html#4.12
What About Training?
The focus of training is to recognize and interpret label and/or SDS information, and to take appropriate action in response to chemical hazards. OSHA has many sources for a variety of jobsites, however the IEC (Independent Electrical Contractors) has developed a GHS web resource page at http://www.ieci.org/workplace-safety/ghs-resources. This also includes a “train-the-trainer” webinar and other useful training information including toolbox talks so that you may document the GHS training that you perform for your employees.
One of the trickiest areas of compliance with the Davis-Bacon Act are Fringe Benefits, which when administered correctly can save a lot of money, or cost you a lot if you get it wrong. From what can be included, to when to pay, how to pay, not to mention, how much to pay are all land-minds, or gold-minds, if done properly. Let’s assume you are signed up with a registered apprenticeship program with the US Dept. of Labor (or state apprenticeship council) like the one IEC Atlanta/Georgia operates. (If you have not already done so, please read my post from May 29 on “Profiting from DB...”)
1) First and foremost – READ YOUR CONTRACT. As we all know the “Contract is King!” IEC Atlanta/Georgia’s apprenticeship program standards specifies that a minimum of $1/hour be paid to registered apprentices on a DB job. If the contract is silent on this issue, then it is permissible to pay apprentices the $1, or more per hour. However, if the contract specifies the full fringe, or some other percentage, then that would overrule the apprenticeship program standards. This is critical! Read the contract carefully! Read the DOL Bulletin
2) Know your current fringe amount in hourly rate format. If a contract specifies $8.67/hour be paid in fringe, then don’t automatically pay that out! Calculate each of the fringe amounts you pay into an hourly rate and then deduct that from the specified rate. Example: if you pay 50% of the health insurance premium at $200/mth, then the annual amount would be 200 x 12, or $2,400. Convert this to an hourly rate (2,400 / 2,080 work hours per year) = $1.15/hour. Continue with all your benefits, total and deduct this from the $8.67 to determine what additional (if any) you are required to pay. Now that you know how to calculate a fringe as an hourly amount, what can be included?
3) Know What Can Be Included in Fringe. Bottom line, anything that you choose to provide for an employee can normally be included in the calculation of the fringe. Those items you can not include are: taxes, workers comp, unemployment and any other state or local mandated taxes, fees or regulated costs required under law. There are a few that can go either way depending upon how you treat them. For example, if you pay for the cost of the apprenticeship program or other schooling, this can be included as long as it is not contingent upon a passing grade. A fringe can only be included if it is given without a contingency. Finally, don’t forget to include any paid time off such as vacation, holiday or sick time.
4) Contributions to a Retirement Type Account. This may be the trickiest, but extremely advantageous and should be administered by a qualified broker or fringe benefits group that specializes in DB work. Instead of setting up a retirement plan, you can always just add the additional fringe amount to the hourly rate, but doing will automatically cost you the additional taxes (FICA, SUTA, Comp, Unemployment, etc…) in addition to the rate, which on average can be 5%! Then, there’s overtime, which must be paid at time and a half on the hourly rate, which will cost an additional 50% of the fringe, plus taxes. Payments to the retirement account must be made at least quarterly, and if invested wisely during the quarter, can also make you some money! Next, by contributing into an employees retirement plan, it allows owners and key employees to contribute more for their own retirement due to strict IRS rules. There are more advantages, but are beyond the scope of this post – contact a specialist to set one up for you. But please don’t ignore this tip if you are going to be competitive in your bids.
As a disclaimer, I highly recommend you have your fringe benefits calculations reviewed by a specialist or attorney, as there are every-changing regulations in this arena.
5 Tips for Exceptional Customer Service That Lead to Greater Revenue, Regardless of the Type of Work
Let’s face it, as consumers, when we buy something, be it fast food, a new gun, or even a car or home, we want, and event expect good customer service. And the more we spend, the more we expect good, if not exceptional customer service. But what does good customer service mean to you? In it’s most basic form, it comes down to good, plain courteous manners, with a good dose of respect through in. Think about some of your experiences both good and bad, and I think you’ll agree that good manners and respect have either been exceptional or lacking all together. Let’s take it a bit further, and extend it out to the job site and throughout the entire company.
Tip #1: “Please, thank you, yes sir, no sir, and it’s my pleasure” are all basic manners that people will notice. This should be clear in any new employee orientation and must be modeled by all supervisors when interacting with employees.
Tip #2: All employees most dress for success, not just the office staff. Our employees represent the company from the way the phones are answered to the line workers on job sites. Clean clothes, well-groomed and good hygiene are key to representing the company in a positive and respectful manner.
Tip #3: The leadership and management of the company must make sure that they not only care about the safety and welfare of all employees, but clearly communicate this to their employees. If employees don’t feel valued, then how will they act on job sites?
Tip #4: Create a culture of high expectations from your employees. This can be accomplished by setting goals, providing training for skills enhancement, and clearly communicating expectations to them.
Tip #5: Make sure that all employees follow through with what is promised to the customer. This can easily be accomplished by simply asking the customer if they are happy with what has been provided to them. If they are not happy, then find out what will make them happy and deliver on the promise as quickly as possible.
Profiting from the Davis-Bacon Act: Are You Making One of the Top Three Deadly Mistakes on the Prevailing Wage Rate?
Mistake #1: Paying the full prevailing wage rate versus a percentage of the rate based upon the experience level of the worker, which can be as low as 60% less PER HOUR! Assume the prevailing wage rate is $30/hour, you could be saving $18 per hour! How do you save the $18 per hour, per person? You must have your workers signed up in a registered apprenticeship program such as the one offered by the Independent Electrical Contractors, the IEC.
Mistake #2: Paying the full fringe amount versus $1 per hour. Additionally, if you are already providing some benefits like paid time off, health insurance or pension, then you can deduct that amount from the required $1 per hour when your workers are in a registered apprenticeship program like the IEC’s. There are a few other mistakes that you need to avoid around the benefit amount – I’ll cover this in a subsequent post.
Mistake #3: Delaying the start date of the registered apprenticeship for your workers until the start of classes. Registered apprenticeship has two components: classroom related instruction and on-the-job-training. Most contractors wait until the start of the classroom related instruction to register apprentices, but registration can start once the on-the-job-training begins. Contact your local IEC office and ask their professional staff how to get workers registered right away.
Check back often to gain more powerful tips on profiting from the Davis-Bacon Act, or post your questions here. If you would like to get personal updates delivered to your email in box, sign-up in the upper right corner.
We’ve all heard it before: “Unions served their purpose years ago, but now are just not needed!” When union organizers show up, many people now feel they are self-serving and only operate to keep themselves in existence, or to keep a politician in office. And recently, they have been appearing not at job sites, but at the front door of a number of contractors in the area.
But why is it that when a union organizer showing up at an employer’s office it strikes fear into the hearts of some contractors, while others want to sit down and have a conversation with them? Is it the past experience (or lack of experience) for the contractor? Is it a sense of loss of control, or the focus it takes away from finding and managing the business that strikes the fear into some and not others? And those that are fearful of union organizers will also jump immediately into action with new policies, retaining professional services and other activities that “circle the wagons” around the company and their employees. However, there may be a simple answer to the different reactions when the union comes a knockin’!
But first, let’s go back to my original statement: “Unions served their purpose years ago, but now are just not needed!” But what was their purpose? The answer seems quite simple: to make sure that employers not only treated their workers fairly, but also paid them fairly. However, in today’s “modern society” we now have minimum wages, Davis-Bacon wages, Family Leave Act, Unemployment and workers comp to name just a few. So, do these provisions nullify the value a union brings to their members?
And here’s another interesting scenario I ran across just a few days ago while talking to a casual acquaintance at the gym. He said that he was not looking forward to going into work that morning. When I asked him what he did and why, he replied “I’m a database administrator and I made a mistake of going to work for an unappreciative bad company.” You notice, he didn’t say I’m not getting paid enough or the benefits are bad – it was the company!
Herein lies the answer to the question; it’s not the pay or benefits, or even the job (in most cases); but the company. When an employer or contractor fears the union, I suggest to you that it’s the management of the company on a day-to-day basis that is the real fear, and not the wages, benefits, or even the job that is the issue. If management is providing a work environment where employees feel valued, cared about and have open communication, then that company has nothing to fear. So, are unions still serving their purpose? If they help an employer become a better manager of the employees by creating a good working environment, then I say a resounding “yes!”
It occurred to me as I reflected on how my week has unfolded, how truly fortunate I am to have experts in my life. To start out my week on Monday morning, our Journeyman Testing Committee had a conference call, where code and instructional expert, Mike Gunter provided a list of draft questions for the committee’s review. Then, on Tuesday, we had a Safety Committee Meeting, where I was surrounded by a wealth of construction safety experts, especially, Jack Otting the chairman. I rely upon these experts to provide me with the latest information on safety, so that I can in turn provide the right information to the IEC membership. (check out our safety page)
I started yesterday with my annual physical and doctor, whom I’ve been seeing for 15 years and knows me so well that he can remember different, let’s say challenges, without looking at my chart. He’s an expert who’ve I relied upon for years, and in the process of the exam, he referred me to another medical expert (not to worry, I’m fine).
Then upon arriving to work, I find out that when staff arrived, they saw the dreaded “blue screen” on the server! They were already on the phone with the IT expert, who eventually had to come over (within an hour I might add) and replace our hard drive. He had us up and running again in no time at all. We’ve used IEC member, Lee at PC MAX for over 10 years, who without his help, we would be in sad shape! If you need computer hardware and/or IT support, call Lee!
During the week I’ve had contact with IEC member and attorney, David Moulds, who has been invaluable with our by-laws update. He does an incredible amount of work for our IEC members at a very reasonable fee. And then there’s our webmaster, Debby Parker at Flathead Valley Web Works, who showed me how to update my email signature with html code. If you need a website, or a more economical alternative to your current provider, check her out!
I could go on with the vast number of experts I rely upon in my personal and professional life, but the one idea I want to stress here, is that by being connected to the IEC, members of our association have access to an enormous amount of not only information, but the experts, to help them with the complicated and ever changing job of operating an electrical contracting company. Check out the many IEC Partner members and tap into their expertise; attend our next luncheon meeting on March 6, and make those connections – I know I certainly don’t know it all, but I do know what experts to go to for the information I need. If you aren’t sure of who to call for expert information, please contact me and I’ll hook you up!
If you’re not an IEC member and want to know more about how to join and connect to our experts, contact me at firstname.lastname@example.org
These days we hear a lot about the low level of work, no margins, and cut-throat competition within our industry. You hear it on the news, at the coffee shop, and I hear my fair share from contractor members. We easily find ourselves caught up in the conversation, literally, but mostly in our mind, as we think about what we’ve heard, how we feel about what’s happening, and then, we think about it all over again!
Ralph Waldo Emerson said, “A man is what he thinks about all day long.” And Mahatma Gandi said, “A man is but the product of his thoughts, what he thinks, he becomes.” And Mark Twain said, “Drag your thoughts away from your troubles… by the ears, by the heels, or any other way you can manage it.”
If one believes any of these famous men, then the more we talk about, think about and dwell on the poor state of the economy, the more it becomes our own reality. I believe God gave us a mind and heart to choose to use our skills, talents and abilities to create all sorts of possibilities that we didn’t think we could do. But with the right amount of belief and thought in ourselves, and those we choose to associate with, we can and will accomplish great things.
It is a matter of choice to think the positive of our situation and our future. Here’s what Steve Jobs had to say about choosing: “A lot of companies have chosen to downsize, and maybe that was the right thing for them. We chose a different path. Our belief was that if we kept putting great products in front of customers, they would continue to open their wallets.”
You have a lot of power in your thoughts, and you will attract and create for yourself, what you choose to think about most. Think positive, stay positive, no matter what the others say!
Welcome to the first issue of my blog on “Powering Connections,” IEC’s new tag line. But, “Powering Connections” is more than just a tag line, it’s a way of doing business, and even more importantly, living your life.
In 2011 both the Atlanta and Georgia Board of Directors embarked on strategic plans that had parrell tracks of spreading the word about IEC, and the power that is there in the 100 plus members, to the construction industry.
As the Executive Director for two different chapters of the IEC, I have the unique opportunity to see and hear a lot of activity within the construction industry, and to help connect people and businesses from not only Atlanta and Georiga, but from all across the United States. With 15 years of relationships I’ve built across the 60 chapters of the IEC, I’m able to help make connections in very unique ways. I can easily point out situations where I’ve connected a contractor from Oregon State to a member here in Georgia. And just last year I hooked up a member out of a Chicago suburb with a member in south Georgia. Both members got jobs from those connections. Last month several members attended a reception that IEC sponsored, but those members didn’t know each other until I introduced them. Now, they are talking about joint venturing on a project that neither of them on their own could probably have tackled.
IEC’s thrust this year is to provide more opportutnites for our members to create these powerful connections. However, IEC cannot force anyone to take advantage of these opportunities – it’s a choice members must make. Just as you choose to volunteer to teach Sunday School, or carpool children, or lead Boy Scouts. All of these areas create powerful opportunities to make connections. Why not take advantage of these opportunities, especially in an era of business that is somewhat unstable.
We can’t do business the same way we’ve always done business, we’ve got to move beyond our normal comfort zone and step out to create new opportunities for our businesses by creating new connections.
To take advantage of the opportunities IEC provides to make these connections, contact me at email@example.com
If you’re not an IEC member and want to find out about how to get connected to our network of over 3,000 members nationwide call me at 770-242-9277.