by Richard Harshaw
Have you ever seen that arcade game called “Whack-a-Mole?” In it, you have a sledge hammer and you try to bop moles on the head as the game pops their heads up above the game board for a second or so. The more you bop, the higher your score.
In this month’s column, I want to show you how to play “Whack-a-Mole” with labor gremlins—those things that rob you of productivity and engorge your unapplied time like a rattlesnake bite makes your hand swell up. Most of these tips cost nothing to do (but some time), and can save you thousands (maybe even tens of thousands) of dollars a year in labor productivity recovery.
Installation Sledge Hammers
There are several hammers you can use on the installation labor moles.
To reduce unapplied time, count your overhead doors. If you have more installation crews than doors, you have a bottleneck. Either add some doors (if you can), or, better yet, don’t let your installers load their own trucks in the morning. Instead, hire a part-time loader to come in early (say, 5:00 AM) and load each crew’s truck with its materials for the day before the crews arrive. Then, they show up, clock in, get their job assignment, hop into their trucks, and drive off. Letting a crew load its own truck is pure insanity! Why pay a crew $50 an hour or more (plus bennies) when you could pay a part-time retiree $20 for the same job? (And if you have several crews but only 1 or 2 overhead doors, your costs skyrocket as crews await their turns at the loading bays.)
To reduce callbacks due to installer errors, make the installers fix their own callbacks, and then make it painful. Are you aware that U S labor law allows you to pay installers minimum wage for time spent on callbacks?
Have a supervisor (you or a hireling) check every crew on every job every day. Make sure they are staying on track with the job labor plan.
Service Sledge Hammers
For service labor improvements, there are a lot of things you can do. First, make sure you dispatch service techs by radio (or cell phone if you want greater privacy). Make sure that every tech has a tool belt or tool case with commonly used hand tools on it to reduce time needed to run back and forth to the truck.
Review how service techs are dispatched and see if you can find a more efficient way to assign them to their tasks, with a view towards minimizing drive time and mileage.
If you are not already using it, convert to flat rate pricing. (Don’t gouge your customers, but it is a brutal fact that in our current market, you cannot charge what you need on an hourly rate—and keep your customers. You need to charge at least 3 times the hourly rate of your highest-paid tech (with bennies) to make any money at service, and that puts most rates over $100 an hour.)
Sell service agreements like your survival depends on it (because it does). Not only do they generate revenue—they can fill in those slow times of the year when unapplied time normally piles up like snow in the corner of a porch in Syracuse. And if you don’t want to do service agreements, promote the bat snot out of pre-season clean and checks.
To reduce callbacks (which should not eat up any more than 2% of labor costs), try these simple steps: have the dispatcher ask the customer a few questions to be sure there is not something the customer can do to avoid a call (like making sure the thermostat is on and calling for action!). Do an analysis of your callbacks, looking for patterns. If there are obvious skill problems, set up remedial training. Review the daily call volume to be sure you are not rushing your service techs. Usually, 5 calls a day is a pretty strong volume. Dispatch calls one at a time and never let the tech know that there is a big backlog of calls to run that day. Let the tech do his job without pressure to hurry up. Cause pain for callbacks—paying minimum wage for the time spent on them.
And to reduce warranty waste (the cost of which should not run more than 2% of installation sales), measure the types of warranty calls you have and take appropriate action. If the problem is a shoddy equipment line, get a better line (even if it does cost more to buy—you’ll probably save it in warranty waste right off the bat, to say nothing of having better customer satisfaction ratings). If the problem is installer or service tech errors, get them trained (or make the available to your competitors). And educate your customers on what to expect of their new jobs. (How many warranty calls have been run because a customer unfamiliar with heat pumps has their first defrost cycle….?)
Meanwhile, whack your labor gremlins before they eat your lunch!
