3 Ways To Increase Field Manager Compensation AND Boost Company Profit
In my opinion, field managers in the janitorial industry have the hardest job. First, they must manage relationships with clients, dealing with complaints, requests, and other issues. Second, they must manage their workforce, often hiring, training, and ensuring all jobs are filled each day. This can be a grueling task, even for the best of managers.
While this job is the hardest job (one I don’t envy), it is also one of the most important roles in any company. This manager is usually the face of the company in the eyes of the customer. However, most BSC field managers don’t make extravagant salaries, nor can owners afford to pay them such. A typical salary for a field manager is between $30k and $50k per year, depending upon the workload, area of the country, and other factors.
You want to attract and retain high caliber managers at your commercial cleaning business. You want to offer them competitive wages, but you feel your profit margins only allow you to pay so much. I’ve got a solution! Let me offer three creative ways you can provide extra compensation for your managers while simultaneously boosting company profit.
Compensation Option #1 – Extra Bill Commission
Extra bill work (hard floor care, carpet cleaning, window washing, etc.) is usually very profitable, with margins often exceeding 50%. However, managers are often leery of pursuing such work as it typically increases their workload. However, if you offer managers a sales commission (or profit sharing) on extra bill work, their reluctance will likely turn to eagerness. At my company, we offer 10%-15% profit sharing on all extra-bill work with a goal of 7% gross revenue coming from extra-bill projects. So if a manager is overseeing $50k in monthly revenue and acquires 7% of that in special projects at 50% profit margin, they could make an additional $250/month or $3,000 per year. For a manager making $40k per year, this is a 7.5% pay increase. For the company, this is an $18,000 increase in annual profit. This is a true win/win!
Compensation Option #2 – Finder’s Fees
Our company is always looking for new customers that fit our ideal client profile. However, identifying these potentials and getting our foot in the door can be a real challenge. Field managers can be a big help here. Since they are out visiting accounts on a regular basis, they drive past potential clients every night. Additionally, they interact with facility managers who talk with other facility managers. If our area or project managers can help us land a new account, we allow them to share in a portion of the sales commissions. The larger and more profitable the account, the greater their payout.
Compensation Option #3 – Branch Boards
This last method of additional compensation is probably the most lucrative (for both the company and the manager) and influential of all the options we have explored in the past. This idea was shared with me by a fellow consultant, Dana Weaver. Branch boards work like this. Each operational unit of the organization (which may be just one if you are a small company), is given a profit goal to hit for the year. For every dollar the branch/unit achieves above and beyond that goal, we share a significant percentage with them (40% is our number). The company wins because we only expected the “goal” amount. Everything above is “icing on the cake” for the company. However, the managers win big because they get to share in those profits. At my company, we divvy up the 40% among the key managers. This incentive program really gets the managers motivated to increase profit by lower labor costs, renewing contracts, keep supply costs low, etc.
The Key To Good Compensation Plans
Regardless of the additional compensation plans you offer, let me make a suggestion. Make sure the plan (whatever it is) drives the behavior you wish to promote. If you don’t want to land 2x per week accounts, then don’t pay commission on them. If you don’t want strip and wax work, then don’t pay commission on it. Incentivize the achievement of outcomes best for the company. This aligns manager interests with company interests, creating a true WIN/WIN.