What’s in It for Them?

BY NICK FORTUNA

Mike Black is a firm believer that when employees consistently meet expectations, they should get paid more. Still, his employees know better than to ask for a raise.

Black owns Cambridge, Ontario-based Valet Car Wash, which operates 10 tunnel washes in the Canadian province, as well as five quick-lube locations. He said employees never have to wonder what they need to do to get a raise because it’s all spelled out on paper.

Just about every position, including detailer, cashier and interior cleaner, is broken down into at least two tiers. If an entry-level vacuumer consistently hits the company’s target for time spent per car and his work meets quality standards, he will become a senior vacuumer and earn an hourly wage increase. Each rung on the managerial ladder also has its goals and expectations listed in detail so employees know what’s expected as they advance.

“The structured process really helps,” Black said. “People don’t just come to you and say, ‘Hey, I think I should get a raise.’ Every employee knows what he has to do to get to that next level and make more money.”

Black knows a thing or two about incentivizing employees. From October through December, he held a contest for his car wash site managers that resulted in 5,200 new signups for the company’s unlimited-wash club. Each signup was worth two, four, seven or 10 points, depending on which level of service the customer chose. At the end of each month, cash prizes were awarded to the managers of the top three sites for that period, and grand prizes were given to the three overall leaders at the end of the contest.

In turn, managers incentivized their employees by promising to share their prizes or by increasing commissions for signups. The result was a motivated workforce intent on driving revenue and getting a slice of the pie.

But in every contest, fairness is paramount. Black said car wash operators should put a lot of thought into how they organize contests, especially when money is at stake for hardworking employees.

“One of the tricky things when you have multiple locations is making it fair for each location because some will be newer than others, and some will be in better areas. So just going by the number sold isn’t necessarily a fair way to do it,” he said.

SHARING THE WEALTH

Jeff Kortes, founder of Franklin, Wis.-based Human Asset Management LLC, which advises businesses on recruiting and retention, said car wash operators should eschew contests and focus instead on rewarding employees for specific meritorious acts. Giving an employee a $25 gift card to a local restaurant or movie theater after he/she graciously handles an angry customer or overcomes several objections to enroll a customer in the unlimited-wash club is a much better use of resources, he said. That approach enables car wash operators to “share the wealth” among more employees, which can boost morale.

“The thing to remember is that the person who gets the most signups each month could be the same person over and over again, so it can actually turn into a disincentive,” he said. “Someone says, ‘No matter how hard I bust my butt, I can never seem to win this thing.’ That’s why you have to be very careful with how you structure your incentives.”

Amid a tight labor market, car wash operators are facing the same challenge as restaurants, retail stores and just about every other employer: recruiting and retaining talented workers. Managers can choose how creatively they want to approach it, but in the end, it boils down to showing them the money.

Car

Brad Mann, owner of The Wash Factory, with seven locations in Texas and Oklahoma, said he uses sign-on and recruiting bonuses to keep his car washes fully staffed. He said the public’s misperception that most car wash workers spend all day outside instead of in air-conditioned buildings is the top obstacle in recruiting. Rebutting that belief is key, he said, but these days, hardworking employees don’t come cheap for any employer.

“Probably the No. 1 challenge we have in growing the business is to find really smart, qualified people to come work for us,” Mann said. “You have to pay better than your competitors, and not just other car washes but your competitors in the retail space. The No. 1 reason people tell us they want to work for us is that they’ve been a customer or they have a pretty good idea of what the job entails, so we’ve marketed to them before we hire them, but we’re still challenged, just like everyone else in the industry, to get that ‘A’ player from a restaurant or retail environment.”

Mann said he offers a sign-on bonus spread out over five months to encourage new hires to stick around. Additionally, employees who refer a friend can collect a bonus after that new hire has stayed 90 days. The bonuses are meaningful but not extravagant, representing about 25% of what an employee typically would make in a month.

MAKE BONUSES SIGNIFICANT

Kortes, the author of “Give Your Employees CRAP: And 7 Other Secrets for Employee Retention” (the acronym stands for caring, respect, appreciation and praise), said referral bonuses are essential because they incentivize employees to mentor their referrals. Since employees get the bonus only after their referrals have proved themselves, employees usually are eager to show them the ropes and help ensure their success, he said.

“I’m a huge believer in referral bonuses, and I’m not talking chintzy bonuses of like $100,” he said. “I have clients who offer a $1,000 bonus for a referral. Based on their metrics, they can see that if a person stays for three months, he is likely to stay for three years, so you give the bonus when the new hire hits that threshold. Your employees don’t want their referrals to quit or get fired, so they typically will mentor them, and the referral bonuses turn into retention bonuses.”

Like Black, Mann has gotten a bit creative to motivate employees. The Wash Factory recently rewarded the membership director of its unlimited-wash club with a trip to Alaska for meeting signup goals. Mann typically brings his management team to the annual ICA show, The Car Wash Show, and at the 2018 edition, they got to go zip-lining in Las Vegas.

“We go there for the education, but we also have some fun,” Mann said. “We try to have a low turnover rate with our management team.”

If you really want to attract smart, ambitious workers, consider partially reimbursing them for college tuition, Kortes said. Given the high cost of college, students are more likely to keep their part-time jobs if they know that at the end of the semester, their employer will reimburse them for a class or two.

“The people who typically respond to tuition assistance are your go-getters, and those are the people you want to keep, so it feeds right into incentivizing your best people to stay.”

- Jeff Kortes, Human Asset Management LLC

“It’s a good hook,” he said. “The people who typically respond to tuition assistance are your go-getters, and those are the people you want to keep, so it feeds right into incentivizing your best people to stay.”

A JOBSEEKER'S MARKET

The tight labor market has businesses of all kinds bolstering their benefits packages and adding perks for workers. Consider these stats from the jobs marketplace ZipRecruiter:

-In May, there were 1.4 million more open jobs than unemployed U.S. workers.

-Jobs posted to ZipRecruiter mentioning health care or retirement benefits increased 70% from January 2018 to January 2019.

-Job postings offering flexible schedules surged 110% from 2017 to 2018.

-Work-from-home job postings increased 67% from 2017 to 2018.

The percentage of companies offering at least one workplace perk – such as gym memberships, remote work, tuition reimbursement, bring-your-dog-to-work policies or laundry services – grew slightly from 25.5% in 2017 to 28.6% in the first quarter of 2019.

“Incentives are more common in job postings right now, and there’s a greater variety of incentives available today than in the past,” said Julia Pollak, a labor economist at ZipRecruiter. “Labor-market tightness and industry-specific labor shortages are spurring the increased use of incentives in recruitment. As long as there are more open jobs than workers, employers will do what they can to set themselves apart.”

Pollak said the most common incentives being offered are higher starting wages and better benefits. In terms of unusual perks, the tech industry is leading the way, with some companies offering laundry services, tuition reimbursement or even company-sponsored ski trips.

“We’ve seen that offering the right incentive can increase the candidate pool significantly,” she said. “For example, employers who advertise a four-day work week on ZipRecruiter receive 13% more applications on average.

PERK UP YOUR WORKFORCE

Looking to get creative in your recruiting and retention efforts? Here are seven companies that offer generous benefits packages along with some unusual perks, according to the job-postings website Glassdoor:

KnowBe4 (computer security services provider) – annual passes to theme parks, yoga classes, massages, arcade room

Formation (business marketing platform) – pet insurance, daycare assistance, personal financial training

Insight (technology solutions provider) – onsite health care center, adoption assistance, in-house charitable organization for employees in need

Spreetail (online retailer of home goods) – a $5,000 bonus toward a home purchase after two years, an island vacation after three years and a 10-day sabbatical after five years

Pinterest (social media website) – Four months off for new parents, one-on-one classes with a parenting coach, egg freezing, reimbursements for adoption costs and surrogacy

International Cruise & Excursions Inc. (travel agency) – onsite nail salon, massages, fitness center

AppDynamics (application performance management provider) – weekly chair massages, weekly run club, meditation, yoga club, weekly catered breakfast and lunch, free snacks and drinks