Why Derek is more conservative now - trying to hire for a cleaning service

OK fair warning.  This is going to be a bit of a rant.  My spelling and grammar gets worse when I rant so I apologize in advance.  Also I am going to touch a little on politics and hopefully I won’t upset too many of my readers but I am having one of those days.  There is a quote that is normally attributed to Winston Churchill “If  you're not a liberal at twenty you have no heart, if you're not a conservative at forty you have no brain”.   I have come to like this quote because it feels a little like it sums up my life.  I was very liberal when I was younger.  I wanted to save the world and help everyone and fix everything for everyone.  Then I bought a residential cleaning service.  Now I realize many of these attempts to help people just back fire and create a system of perverse incentives.

We have been desperate for people for over 2 months.  We are running advertisements on Craig’s list, Snag a Job, Monster.com, we ran ads in the paper, we offered incentives to current employees.  We even ran a job fair at the local unemployment office which they promoted to all the unemployed people in Warren county.  6 people came.  5 were immigrants.  We have to call 20 applicants to schedule 5 interviews.  On average only 2 out of 5 people show up for their interview.  Of those, one 1 of 3 will not show up for their first day of work.  Now do not get me wrong.  I love my staff.  I have 40 rock stars that work for me.  However the amount of BS we have to deal with to find the few people that really want a job and really want to improve themselves is incredible.

Now I know cleaning people’s homes is not a lot of fun but I like to think we offer a pretty good job.  We are growing so I guarantee my people full time work.  We are growing quickly so we have places to move up.  In the last year I have promoted 3 cleaners to General Managers running a branch office of their own.  We offer medical insurance, 5 days vacation, 9-5 work with no weekends, monthly bonuses, no micro-managing bosses, a no drama policy, and we try to have some fun.  We had our Christmas party at an indoor water park this year and bought tickets for everyone and their families, and we are having a fancy all you can eat Candy and Cake Pop bar the Friday before Easter.  We also don’t pay so bad.  Most of my cleaners make $450 - $500 a week but I have several cleaners that make over $600 a week.  Before tips.  Lets be clear that is a $25,000 - $30,000 a year entry level job with no degree required.  This week one cleaner make over $800.00.  Ok I am ranting but I think you get my point, not that terrible of a place to work.  I have many one 11 year employee and many employees with us over 2 years.

I swear 95% of the people that “Apply” have no interest in being hired.  For those of you that do not know the system, to keep your unemployment benefits you have to be actively looking for a job.  They ask for proof of where you applied.   Now imagine this, you are applying for a job with me.  These are actual answers from the questions “Why did you leave you place of previous employment?”

1.  Baby fell off balcony.  (Worked as a housekeeper at a hotel.  This has to be my all time favorite)
2.  I asked for 1 week off.  They said they no, they were too busy that week to spare me so I quit to show them.
3.  My boyfriend kept stalking me and terrorizing everyone at my office.  But we worked things out.  We are ok now.
4.  The work was too hard.

I had one woman no show for her interview.  Then she called me the next week.  “I am just calling to check on my application.”  Derek “You did not show up for your interview.”  Her “Yeah something came up, can I schedule another one.”  Derek “No, please don’t call again.”   I had another woman no show for her interview but she had the guts to call and ask if she could fax me her unemployment form to fill out confirming she had an interview scheduled.  Heck no, the point is you are supposed to go to the interview, not waste my time by scheduling it and then not showing up.

So I find myself yelling at my radio a lot.  I am an avid listener to NPR.  I think they do great in depth news stories.  But every time they run one of the pieces how terrible the economy is and no one is hiring I start yelling back.  I really get worked up when I hear the pieces about how we need to stop immigrants from coming over because plenty of Americans would do those jobs.  No they won’t.  Now lets be clear, I have exactly one non American citizen on my payroll and she is from Canada so I am not saying this out of pure self interest.  My people work in air conditioning all day and I have a terrible time finding people. I cannot imagine the poor employers trying to find people to work outside all day.

Now lets move to the other side of the unemployment system.  What most people do not seem to understand until they own a business, including me, is unemployment insurance is not like social security with a set rate.  It is basically directly billed back to your previous boss.  So if I lay a bunch of people off they rate I have to pay for unemployment goes way up.  So when someone files a claim, it comes right out of my pocket.  The other thing most people do not seem to realize is it is not really unemployment insurance, it is lay off insurance,  If you are fired for cause or you quit, you are not entitled to it.  You also have to earn a certain amount and work for a certain time to qualify.  There are people that game this system.  They know the rules and the appeals inside and out.  These people target smaller businesses because they know they are less likely to know the rules, have an HR department, have the time to do the paperwork and appeals, and may not realize it will even cost them when they get a claim.  It is like vultures who circle unsuspecting small business owners.

When I first bought the business I had one woman who did not like the changes I was making, like uniforms and mandatory arrival times.  She stood in my office screaming at the top of her lungs in front of 4 witnesses how stupid we all were and throwing things ending with “Fire me I dare you!”  So we did.  She filed unemployment and said we did not fire her for cause.  I filled out the paperwork and said she quit.  I lost as they said I fired her, she did not quit.  Foolish me, I thought when you scream to fire me and throw things at us, your quitting colorfully.  I appealed and said fine I fired her and I described what happened.  I lost that appeal because I could not answer the question as to what policy she broke.  I appealed again and had to some clause in my employee manual about “treating co-workers with respect” that she broke.  Finally I won.  I mean how stupid is this.  She stood screaming in my office throwing things but the only reason I finally won is because I was lucky enough that the employee manual I used had a generic phrase about treating others with respect.  Is there no common sense anymore.

About half the people I hire do great for the 8 weeks it takes to qualify for unemployment.  Then they start calling off work, like every day.  Or they do a terrible job.  Basically what ever it takes to get fired quickly.  When employees are fired I have them sign a form that acknowledges that they were fired, lists the reasons why, and when they will get their final check.  They all file and they all check the box that says “No reason was given why I was fired.”   We then have to fill out a 4 page form on why they were terminated, we need to include copies of every incident report, the termination letter, and send it all in within 14 days (lets hope the owner is not trying to take a vacation).  If you fail to respond, they win.  Once I respond, I then get another 4 page form to fill out that basically says “We got your claim that your employee was fired for cause.  Please provide more details to this new department. “  We then have to submit the exact same book of information AGAIN because it goes to a different department and goodness knows they cannot forward it.  Once we win that the employee can appeal up to 4 times.  Once again if we fail to respond, they win. 

This all takes an INCREDIBLE amount of my time and the government’s time with all of these appeals.  This wastes my money and the money of every single tax payer.  Remember I have a signed form from this employee acknowledging why they were let go.  Why is there no penalty for filing a false claim?  You cannot just file a fake police report because it wastes valuable resources.  But these people can play unemployment lottery and file a claim they have no right to in the hope their previous employer makes a mistake.  And now that we have extended unemployment benefits out for over a year the prize is even bigger to encourage people to do play the lottery even more.

Ok now I know some people are reading this and thinking “Derek, there is no way anyone can survive just off unemployment.  Your just being harsh.   It is what 40% of their previous pay?  They cannot live off that.”  Well you are partially right, they do need more income but there are ways to play that game as well.  About one out of 3 people I screen over the phone ask me to pay them under the table because they are getting disability or unemployment benefits they do not want to lose.  Seriously.  1 out of 3.  If you don’t believe me, come spend a day in my office.  If that does not work, remember we just trained them to be pretty good cleaners and they did a decent job as long as they cared to.  They may or may not have bothered to returned all the equipment and supplies we bought.  Now all they have to do is hang up some flyers and get some clients and not record any of the income.  So now they get 40% of their pay from their last job AND they get all the other low income government benefits, AND they have a cleaning job that they are being paid 100% under the table.   Welcome to how to play the system 101.  And I get more conservative by the day.  This is also why you need to treat the good employees like gold.

What not to put on your application for a cleaning service

OK today's blog is mostly for humor and was inspired by some of the more interesting applications we got this week.  I have been amazed by what people will put on their application.  These people probably tell all their friends how they cannot find a job and no one is hiring.   Lets make this one interactive, post your best examples in the comments below.  Lets just go for what people write on the application for now.  We will save the dumb interview answers for later.

1.  Reason you left job:  I asked for a vacation.  They declined the day so I quit.

2.  References:  Mrs. Smith - Relationship – Parole Officer

3.  Previous Employment – Vet Office – Reason you left the job – I could not tolerate the dust and dog hair.  (Remember applying for a cleaning job here)

And the winner from today that inspired this column:
4.  Previous Place of Employment – Hotel House Keeper – Reason for Leaving – Baby Fell off Balcony.  

20 seconds of Courage: Facing Down Your On Board Terrorists

Sometimes as cleaning business owners, we manage to convince ourselves that our problems are special and unique.  We do not think anyone can understand what we face every day and no one has ever had the same kinds of issues.  This week I have been in Texas all week for the Home Cleaning Technician class (http://www.isetoday.com/) and then I met with some cleaning business owners and college friends.  I was meeting with a friend from college who owns a company.   Her company is nearly identical in size to mine with the same number of employees.  But she does not own a residential cleaning company, she has a physical therapy practice.  She bills over $100 an hour and her employees must have a Master’s Degree.  Her employees as seen as true professionals.  She has to be bringing in 3 to 4 times the revenue that I am with the same number of employees.  What on earth does she have in common with my business were I have to fight like mad to bill over $30 an hour and many employees did not graduate high school? 

She is being driven crazy by her employees.  Some have bad attitudes.  Some call off way too often.  Her call off rates are 2 to 3 days per MONTH.  She has no idea who is going to show up to work from day to day.  She told me one of her “favorite” and “best” employees calls off the most.  She is terrified to be too tough her therapists, especially the “good” ones, because they may go independent and do home health care without all the same over head that she has with office rent, liability insurance, and so on.  She is starting to hate her business because she feels trapped by her employees who could go out on their own and steal her clients at any time.  It is a conversation I have had hundreds of times with cleaning service owners.  We often fool ourselves into thinking we have the problems we do because of the “type” of people we employee.  I have news for you, all service businesses have the same issue whether you pay your people $9.00 an hour or $50.00.  It is a problem of leadership, not a problem of the “type” of employees we have.

I have also been reading a new book “Selling Sunshine” by Tony Hartl.  Tony made his fortune by building the largest and most successful chain of tanning salons in the world.  My brother, who owns My Maid Service Dallas, is also owns a barter brokerage and Tony is one of his clients.  Shawn said Tony is a great guy and gave me a copy of his book to read on Wednesday.  I am only on chapter three but I love what I have read so far.   Tony’s business sounds so much like ours.  I am going to quote him here. 

“Starting early in my career, I refused to be held hostage by employees, even if it meant taking extreme measures.  I always believed that I could work myself out of any situation.  I wasn’t going to let the inconvenience of working longer or harder get in the way of pulling the trigger on a problem employee.  You just do what’s got to be done.

I was having some staffing issues, and rather than put up with it, I fired five people in one fell swoop.  Obviously, that created a huge gap in the work schedule, forcing me to open and close the club for several weeks.  I had to work around the clock and sleep at the club to pick up the slack.  Believe it or not, this schedule was much better than dealing with problem employees.”

Tony eventually created a culture that attracted some of the best employees but if you think he never made a mistake, you are wrong.  Bad employees will sneak in and you need to get rid of them as soon as possible, regardless of the cost.  Keeping them is far worse than losing them, no matter what you may think.  At an ARCSI meeting, one of our speakers had a great name for these employees. He called them On Board Terrorists.  They will do everything in their power to take you down from the inside.  They recruit others to their cause and they take customers as hostages.  They will terrorize you and your good employees until they destroy your company and your peace of mind.  You need to get rid of you on board terrorists as soon as you identify them.

Finally circling back to our industry, at the House Cleaning Technical class in Dallas I met a franchisee with 4 offices in two states most of us only visit on vacation.  This man is living the dream.  His business runs largely without him and he summers in one state and spends his winters in a much warmer client.  We asked him to tell us about a turning point in his business.  He told us that several years ago he realized one of his offices was having a huge morale problem.  He tried several times to fix it but nothing seemed to work.  He finally fired everyone in that office including the manager.  He literally was left with an empty office with a list of clients and no employees to do the work or even train new employees.  He called all the customers and explained what was going on and if they would stay with him for 3 or 4 weeks he would have a better staff in place to service them and he would give them a free cleaning.  He replaced the whole group including training in three weeks and lost only 3 customers a result.  He was losing more than three customers a week due to the poor service and attitude from the previous employees.  He said it was both one of the most difficult and best decisions he ever made in his business.  He learned he never had to be heard hostage by his employees again.

This is all a lesson it took me far too long to learn.  I kept poor performers on for too long because I was worried about how to service my clients.  I have learned it is far better to call a client and politely tell them you are short on staff than to send a bad employee into their home.  Of course I want to do everything in my power to hire the best possible people.  But when a bad person sneaks by or when a good employee goes bad, you have to make the hard decisions.   You are in charge.  If you don’t do it no one will.  To quote Tony again, “You just do what’s got to be done. “

Let me give you one more thought of encouragement.  I went to a movie with my daughter this weekend, “We bought a Zoo.”  In that movie one of the main characters explains to his son that your life is often shaped by just 20 seconds of insane courage.  Your business is not so different.  When we are truly honest with ourselves, we do not fire people due to fear.  We know it needs to be done but we hate firing people and we are afraid of what will happen when we do.  There was a discussion I saw on Linkedin this week when someone asked “When is it time to fire an employee?”.  My answer which I still believe is as soon as you start to ask that question about someone, it is time to let them go.  In all my years in this business I have never had a problem employee that turned around nor have I met a cleaning company owner that did.  You need to be fair and follow your procedures but when the time comes, you need to muster up your 20 seconds of insane courage and just do it.  Do not drag it out with some long lecture.  Be professional but be polite.  “I am sorry but you have broken company policies too many times and I need to let you go.  We will need your company supplies back tomorrow by 9 AM.  We will send you your final check on Friday”  Done.  20 seconds of extreme bravery.  If you cannot do that, I honestly recommend you sell your clients and go work for someone else.  If not you will never have employees who work for you, you will be working for them and it is far better to work for 1 boss than working for multiple employees.  It pays better too.

Non Cash Incentives for Cleaning Techs

If you have been following many of us that own cleaning services on Facebook you may have noticed that a lot of us have started using a system of non cash incentives.  Some people call them maid bucks, bonus bucks, etc. but many of the ARCSI members have started doing it.  At My Maid Service have started using a system called bonus bucks.  We give the employees bucks on their anniversary with the company, birthday, for perfect attendance, for helping other teams at the end of the day and more.  The techs can save their money from month to month and then at the end of the month we have an auction for various prizes that change each month. 

Using incentives to motivate your staff is a great way to bring excitement to your team but it is also tricky.  When you ask your staff what incentive they want they will almost always tell you cash.  But cash is not the best way to go.  Hundreds of studies have been done on ways to motivate employees and they all agree cash is not the way to go  When I worked for Procter & Gamble we used a company called Business Incentives and their whole reason for being was to incent employees and they were very good at it. Business Incentives taught me that using cash is not usually the best way to incent employees.  They shared one study asked employees 6 months after they got a cash incentive, what did you do with it. The top three responses: 29% paid bills.  18% do not remember.  15% not only did not remember what they did with cash, they swore they never even got a cash incentive in the first place.  Considering the amount of money we spend on incentives we would like to think our employees will remember that we gave them the money.

So what incentives work best?  Unfortunately there is no blanket answer, it varies by person.  However all effective incentives have 2 things in common.  One, it has to be something your employee wants.  Two, an incentive has to be something the employee could never justify buying themselves.  The classic example is the salesman who is offered a cash incentive of $1,000 or a $500 golf driver.  In study after study the sales person will work harder and sell more for the $500 driver than the $1,000 cash.  Why?  When you look at this it seems to make no sense.  Win the $1,000, buy the golf club, and still have $500.  In the real world this is not how it works.  If the salesman wins $1,000 and spends half the money on golf clubs he feels very guilty and if he is married, well he is in HUGE trouble for wasting the money.  But he cannot feel guilty for winning the golf club.  When he comes home and shows his wife what he won, she is proud of him, not angry for wasting the cash.  He can get something he would really want but could never justify buying on his own.  And yes the same thing works with women, I used the sales man example because most people are very familiar with it.  While we are not normally dealing with men, the rules are the same.  If our employees win $250 they will spend it on bills or clothes for the kids.  They will be responsible.  However if they win something for themselves it is much more special and memorable.  Responsible is not memorable.

Giving non cash incentives has one other huge advantage, the bragging factor.  It is not socially acceptable to tell people about all the money you have.  But if you go on a great trip, or have a great experience, or got a great thing, you are expected to tell everyone about it.  Your employee will be selling your next incentive for you.  

We need to think of what our employees want, and it is not always what we want.  One of my first incentives was a dinner for 2 at a great 5 star steakhouse.  No one even tried.  I thought they would be motivated to eat somewhere they would never go on their own.  I was wrong.  They did not want to go to a place they did not feel they belonged.  It was not special.  It was intimidating.  What incentives have worked best for me?  Sporting event packages.  Jewelry.  An extra day of vacation that cannot be turned in for pay. 

What do they want but that their guilt would never let them buy for themselves?  Also remember that different employees want different things so it may make sense to make your incentive a choice so employees can pick what makes them excited.  For example the person that generates the most leads from flyering neighbors gets 4 great tickets to the Cincinnati Bengals and $50 food gift card or a emerald necklace.  Finally change the incentives.  Different people will respond to different things.  If you have someone that is always left out, make an option for just them once in a while.  For example, I only have 1 real hobby outside work, comic books.  Yes I am a huge geek..  I never worked so hard as the one time by boss offered a fancy golf outing, spa day, or a near mint copy of Avengers #3.  My wife would kill me if I spent $400 on a comic book so I worked very hard to win that comic, and I did.  Get creative and you can get better results for less money than cash.