I own and run a small lawn care company, and I’m having trouble finding workers right now (like everyone, it seems). I have six guys at the moment, but I’d really like to hire another. We certainly have the business for it. The pay and benefits I offer are competitive, and I even upped my base wage by $2 (to $17/hr) thinking that would help. Still no takers! What more can I do?!? It seems like no one wants to work anymore!! – Name withheld
One way to attract workers is, as you correctly assume, to offer better pay.
This is how markets are supposed to work, after all – including the job market. More $$ should increase demand for the job on offer, resulting in more applicants. Problem solved.
In your case, however, that approach does not seem to be working.
You could consider raising your base wage even further, I suppose. But you’ve probably run the numbers already, and decided it’s just not feasible. Any additional business this new employee allows you to take on must at least cover the cost of paying them (and probably allow for a little profit on top of that). Otherwise, it’s just not worth it.
It’s worth pointing out too that a $2 increase in your base wage, though seemingly modest, is more expensive to you and organization than most people probably realize. That’s because it’s not just this one person that you’ll be paying more. Everyone else’s wages will need to go up too, lest the troops become restless. So instead of ‘just’ $34K/year (the cost paying one full-time employee $17/hr), your organization will need to bring in an additional $58K in revenue per annum if this is to make sense. Your new employee won’t come cheap, in other words.
But there is another approach you could try.
You seem confident you can attract the extra business required to make the numbers work. All you really need is the labor to accomplish it, right?
So why not see if your current crew is up for it?
Here’s what I propose: Explain your situation to the six who work for you now. Tell them there’s demand for X amount more of your company’s services, and that you’d like to take it on. Then—and this is the critical part—offer them a share of whatever revenue your business actually brings in.
Say, for instance, you hit that target of $58K more for the year. Split evenly—that is, seven ways (including you)—that’s an extra $8200 in pay per person, annually – or the equivalent of $4 per hour increase for everyone, not $2. I’d be surprised if they weren’t at least interested.
There’s a couple of advantages to this approach. First, it exposes you—the business owner—to less risk. Should you not attract as many new customers as you anticipate, you won’t have to worry about cutting anyone’s hours, reverting to your old pay scale, or firing someone.
Second, it aligns your employees’ interests with your own. Under your current pay-by-the-hour system, your crew is motivated to work as many hours as they can, but not necessarily as hard as they can. Working more efficiently, which is good for you, means less hours for them—and therefore less $—which is bad. So where’s their motivation to give it their all?
When you share profits, however, working harder (or in your case, faster) benefits everyone. The more customers you take on, the more $$ everybody earns. In fact, if you go with this system, don’t be surprised if your employees start drumming up business for you on their own.
Now maybe you’re thinking: how do I keep them from rushing their work, and doing a lousy job? Yes – when you pay by the job, and not by the hour, the inclination is to cut corners (or in your case, not cut them) in an effort to cram as many lawns into the workday as possible. After all, more work means more money. As a result, quality may begin to slide – and that could cost you business in the long run in the form of lost customers.
But by sharing profits, your employees will feel those effects in their pocketbooks too. That should keep them in line.
Of course, maybe your crew is already working at their full capacity. If that’s the case, they’ll likely be as eager as you to hire someone new.
But again, I think the question you should ask yourself is: Do I really need to hire another employee?
Or do I just need to figure out how to accomplish more with the employees I have?
 By my calculation…
1 full-time equivalent (FTE); $17 x 40 hrs x 50 weeks = $34,000
Proportional raises for 6 current employees (6 x $2 x 40 x 50) = $24,000
Total cost – $58K