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Employee Compensation: How, Why, and How Much

I’m going to share my compensation structure for our employees with you, but first… 

has this ever happened to you:

Payroll day comes and everyone gets paid but you decide on taking less than you planned on, or worse, you skip this week’s check because checks from customers have not come in yet and you decide you’ll just double up next week.

Next week comes… the crew members get paid and you reluctantly pay yourself, but for only one week, not double like you told yourself before.

Maybe you have not been there but I have it and stinks.

As I look back on these times it is as if I was working a volunteer job but with all the headaches that go with running a small business.

I do pride myself on never missing a payday for the crews but wish I could say that for myself.

How did I change this?

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  1. I always pay myself first now.  It is amazing how things will change when you feel compensated for the work you perform.
  2. Ask for booking deposits ahead of time for jobs. This keeps the cash flow flowing, which is the foundation of every successful company.
  3. Contractually state progress payments with customers. note: ask for those payments when due.
  4. Keep my pay consistent and only took bonuses when financially able to afford this perk.
  5. Know your numbers! Which is the cost of employees with overhead and expenses (cell phones, gas, shop, equipment, accountant, ect…)
  6. Set up a drip account for leaner weeks and months

Compensation is either weekly or biweekly for the majority of the contractors I know.

We have found an easy to use payroll software/app which is used by all members of our Teams via their cell phones called TSheets.

With TSheets we are able to:

  • Track each minute on each job for job costing.
  • Have crew team members work on each job as they switch from each component of the job to another which allows more accurate estimating.
  • Track location of punching in and punching out with GPS locations
  • Team members can add notes to the mobile time card at any time
  • Snapshot of where everyone is and who is punched in at any moment.

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Why we pay what we pay is determined on how competitive you want to be in the marketplace.

Factors of benefit-cost effect the hourly pay and draw employees to your company over others.

Every added benefit of working for your company is factored into the bottom line but can make the difference between retaining employees and recruiting new team members.

  • Sick day pay
  • Vacation pay
  • 401K
  • Holiday pay
  • Uniform expense

Compensation structure for our employees:

  • Apprentice painter and prep person: $12.00 –  $ 14.00 per hour
  • Painters: $ 15.00 – $ 20.00 per hour
  • Lead painter: $ 18.00 – $ 23.00 per hour
  • Crew Leader: $ 23.00 – $ 26.00 per hour

We pride ourselves on being able to pay our employees better than the competitive wage for our area.

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About the Author

Ron Ramsden is the owner of the successful Ramsden 1-800-PAINTING, who implemented the DYB SYSTEM, and crushed it in 2015, and now coaches other painting contractors around the nation to do the same.