Nobody likes to confess about the occasional slow spell, but we all have them. I'm curious how you handle it when you have employees.

You still have the full page phone book ad, payments on the vans, all the usual overhead, and well trained employees with nothing to do.

It seems like you'd be reluctant to lay them off, so every hour is eating up your profits from previous profitable work. You don't want to loose a good employee because you've invested in them & their training.

So what do you do when it slows down?

Dave

I don't really have employees to worry about; there is my partner, and myself.

I "slow moment" is an opportunity for my to clean my truck, sort through my parts, catch up on paperwork.

Then I turn to my cats. Yup, the four-legged kind. I take the latest pics around to my regular customers...just a friendly "hello." Quite often this turns into a general chat about what they're up to, and how I can join in. Or, my visit will give them a chance to bounce some ideas off me- things that were not so urgent that they didn't want to 'bother' me.

This is the time a regular customer really prooves his value. They will also have some little things they want done -things like changing lights, moving an outlet, little 'fixes' discovered in the course of other jobs- that they just haven't had the occasion to fix.

Consider the lillies of the field. They neither reap, nor do they sow. Yet in all his glory King Soloman was not arrayed like one of these..... Stop worrying and lay them off. If they liked working for you they will come back.

Wow Mike that is just plain cold.

I have always worked for others, and when I do I give 100% to the company, for that I expect some sort of loyalty from the company.

When things have gotten slow the companies I have worked for have found things to keep me busy and on the payroll. I have split wood, organized stock, once I even helped do a engine swap on a 40' fishing boat.

I have experienced a layoff only once while employed as a full time electrician and that was after a long slow down. By that point it was down to laying off the owners brother or me.

Bob

Ok guilty as charged. Cold. Now when general contractors that I sub to get slow, should I go whine to them to go underbid some projects since I won't have any work now that they are slow? And should I expect my wholesaler's to cut the prices across the board since my company is slow and suddenly cannot afford the regular prices? At the end of every large bridge project that ever got built the workforce was sent packing. That was the way it was. At the end of WW2 the troops were dismissed. And since workforce labor is the highest cost of doing business, it does not take very long to drain the company into non existince. I know how hard it is to lay off a family man. I had to make that choice many times. But I gave the original poster the encouragement he needs to do what is necessary.

Good employees are too hard to find to just lay them off unless it was going to put me out of business if I kept them. I would even pay them not to work if I couldn't find other work for them.

This is why it is critical to make a healthy profit during good times, because the slow times eat that profit at an accelerated rate.

When our company hits the odd slow spell, the boss will always find stuff for us to do.. I have done all sorts of things from push lawnmowers, to basic boiler maintenance to even help the boss' wife move furniture around! We don't mind as it is a change from the norm. Our boss likes to see us busy no matter what and would rather see us get our hours than have us go home early, and I have yet to see him lay off someone because its slow...

A.D

duplicate post deleted

[This message has been edited by Electric Eagle (edited 03-26-2006).]

Mike I would not expect you to put yourself out of business.

The company I work for now will when necessary bid below cost to keep us all working. Of course we try to make up for that with extras.

We have about 200 people and the payroll is a very large drain if we are not bringing $ in.

We just had the first layoffs in years a few months ago. However many of those let go where not pulling their weight and it was a good time to clean house.

Many of us senior guys volunteered to take some vacation days.

Bob

I'd rather be laid off, than a cut back in hours myself........

When I worked for people, that was my option..
I'd rather sleep late, work on my house, go fishing ect...and collect, rather than show up for 2 hours today to clean a shop, 4 hours tommorow to do this...screw that, let me have off and collect, call me when you got work in a couple weeks....

Be honest with the guys, give them options...

Dnk..

"Be honest with the guys, give them options..."
____________________________________________
Dnk,

It costs the employer to lay a man off, the money that you collect, comes from a state run fund, funded with contributions of the employer, which they have to pay back to the fund, and this increases their operating expenses in the long term, not an easy decision for an employer to make.

[This message has been edited by LK (edited 03-26-2006).]

"At the end of every large bridge project that ever got built the workforce was sent packing."
__________________________________________

Yes, on large projects, they were sent back to the hall, and assigned another job, they also retained their benifits.

When was an employee, if the boss asked me to cut wood, pull weeds, or brush his property....I responded politely "no thank you".
I'd rather go fill-in somewhere else till he had electrical work for me.

Mike is right. If you like working with a certain company you'll wait untill they have work.

LK, its not "fly by night" companies that do this, its "small buisness" and they carry this country.

Rob

quote"Yes, on large projects, they were sent back to the hall, and assigned another job, they also retained their benifits. "

Thats exactly what happened to the men I had to lay off at the tail end of my biggest project I ever had.

LK,
I'm a member of the IEC and while I haven't tried it they offer an employee loan/borrow program. If I need extra employees for a short time I can borrow from the pool, if I'm slow I can offer my employees for loan. It works similar to to IBEW pool, but they remain your employees.

We have been doing that, with a few local EC's, and it helps, I din't know about the IEC pool, Thank you.

The company I work for 'trades' with a few other ECs when needed.

I don't know the specifics but the employees remain employed by their original company.

They also trade/sell/buy some tools and temporary power equipment between companies

Do not hire employees that you cannot keep busy year round. When you have projects that require more man power or skilled labor, hire subs. In my area there are two large ec's that I keep a good relationship with. When they need help they call me and vice versa. It has worked very well. I am a "small business" and I resent anybody from a "large business" telling me how to run my business or how to hire or layoff. I am busy year round and when slow, do everything possible to keep them busy, including subbing them out.

International Electrotechnical Commission

International Engineering Consortium

What does IEC stand for that you are referring too?

Ayerton, I can't speak for others, but....

One of my former employers whom I hold in the highest esteem is a guy who hired me for one job. No bs, promises, or excuses....he told me up front, at our first meeting, that he needed me for a three month job. Job finished, and I moved on.

At the other extreme, I have nothing but contempt, bordering on hatred, for a special few former employers who gave me the big song & dance, about how rosy my future was with them- then laid me odd the instant the job was done!

In between are the various corporate jellyfish who concocted "slow time" stories in order to fire me- rather than be honest as to their reasons. I can forgive dumping me so you can give your nephew a job- just don't insult me with your fairy tales!

ayrton,
IEC stands for "Independent Electrical Contractors". I don't want to start a union vs non-union thing, but it's basically an organization for non union EC's. If you want to check it out it's www.ieci.org

"Ayerton, I can't speak for others, but...."
Quote

Why is this addresed to me? I am not the ******* who hires and lays off.

i watched my father nearly go bankrupt in 1989 trying to keep men working. We went from 40 men to 0 in the course of about 14 months (anyone in business at the time will remember how it hit the fan at that time)

He tried to keep the last 10 going until things turned around. They didn't turn around until about the mid 1990's.

Unfortunately, had he let them go sooner, he would have been in much better financial shape. It's a tough call.

The way I see it, as contractors we have everything tied up in these businesses (for the most part) if they fail, we are pretty screwed. The guys that work for us can always find another job. Shoot, most of us suck to work for anyway.

So, while you feel bad that they have a family, etc - what's going to happen when you go into debt keeping them working and things don't turn around? You'll have lost everything and they'll move on to their next job. Same as if you laid them off before you went broke.

That being said, layoffs are tough on everyone. But sometimes, they are definately necessary.

This comes from a contractors POV. If i were coming from an employees POV, then any boss who lays guys off just cause they are slow is an ***hole. The boss is rich. He makes a ton of money off me, now he's gonna lay me off? That's bull****. I do all the work, he makes all the money. Without me, he'll go broke. Without me, he'll never get anything done........

I fall into the "send them back to the hall" group.

Except for a small group of "shopies" and even then, we can only keep them around for a while with no work.



[This message has been edited by Amazingmg (edited 03-28-2006).]

"I don't want to start a union vs non-union thing," [Quote]

Why not?? We are all adults here, I think. I'm non union, so you wont offend me, the union people seem to be the ones who get offended. I think it is a great topic.

In the interest of keeping this thread running, please stay off the union/merit shop issue.

Thanks,
Dave

It is an ECN policy that we do not discuss union vs non union issues.

Dave (Tiger) is correct that this is a good thread but it will be closed out if it turns into merit vs union.

You can always discuss those issues via email.

Bob

Yes ayrton, we are all adults, that's the problem.
Notice that politicians are all adults too.
Have you ever seen a more irrational, dishonest group of people?
CEOs are adults. Have you ever seen a more greedy, uncaring group?
Most murderers, rapists, drug dealers, etc. are adults.
Adulthood hardly qualifies anyone to be anything at all except maybe to vote & drink.

Ahhh, childhood... when all you had to worry about was the occasional bully!

No sane person enjoys making decisions that will cause another pain- especially if there is no blame attached to the person affected.

Tom Peters, and others, have documented, time and again, how loyalty works both ways, and the casual hiring/firing of labor leads to a sick company.

Nevertheless, some businesses are different than others. This is espacially true of construction. Let me use Reno as an example.
We (the town) are just finishing one big project, and have two more in the pipeline. Now, I can't tell you which electrical contractors will get the jobs- but I can tell you who the electricians will be!
A large number of the electricians on the new jobs will be the guys who just worked themselves out of the last one. That's the nature of the biz.

I strongly suspect that there is an informal "pipeline" between contractors, as well. I was once laid off (end of season)....and had just finished cleaning out my truck when another contractor asked if I were available. What made this remarkable was that I had never contacted this guy, he was not running an ad- indeed, he wasn't even in the phone book. A little research revealed that not only was he licensed, but had one of the highest bond limits in the state.
I worked for him, and when that job finished, went straight into another. I haven't been idle since.

Send them back to the place of assembly, at least they will sit on the bench and get called for the next available job, and when they get it they will get the same pay and benefits they had with you. Your employees are professionals, and as such know that they only work when there is work to be done. You are not responsible for their personal financial responsibilities, only for using them to complete the contracts you have on hand. If you only hire qualified Journeyman and apprentices you won't have to worry about them when you let them go.

Edited to help out the new member with some not to dos on this forum.

[This message has been edited by dougwells (edited 03-30-2006).]

In what year do they teach apprentices how to read?

Let's try again, the contractors we are talking about, are small 1 to 5 man shops, they operate doing small remod jobs, and some do service repair work, we are not talking about large construction projects, the topic was, when business slows, and you have skilled employees, what are some of the ways to prepare for slow times, to avoid a lay off, is it reduce hours?, reduce days, or, lay off until things pick-up.

Remember, for a small business, the overhead cost continue, even when there is no work, laying off your employees, will not produce the needed income, to continue in business, finding work, will produce the needed income.

Let's get back to the topic!

Imagine you're working at a place, and you see all the signs that work is drying up. What do you do?
Do you simply bail out- or do you try to bring some of that "side stuff" you've been doing into the shop?

If you're a contactor, or even a foreman, and you see a slow-down coming....what do you do to prevent it?

I'll tell you what I do. I start touching base with my regular customers, to see if they have any work in the pipeline- or, maybe, some little stuff that's been getting put off.
I made sure everyone I deal with- from the bartender to the local mini-mart, knows I'm an electrician. heck, I might even suggest something, like a lighting upgrade.
If there's a new place in town, I introduce myself. If a big job finished this time last year, I swing by, offering myself for maintenance work (now that the warranty is over).
I "beat the bushes" with the other contractors I work alongside....the plumber, the HVAC guy, the fire systems guy, etc....to see what they have going on.

SLow periods can be assets or liabilities. Just sitting around, waiting for the phone to ring, is not a solution. Even a small, two or three man operation has to clear $800 every day, just to keep the lights on.

I read something interesting in Markup & Profit by Michael Stone which I'll quote:

"You must run your business as a business. Your main reason for being in business isn't to provide jobs for other people. You're in business to provide a service to your customers and to make a profit doing it. If there are no profitable jobs to work on, then everyone goes home until there are. That's the nature of construction. If you've been in construction more than a day, you'll have heard that there are some down times. We all have them; they're part of the business. If you or your employees can't handle that, then you'd all better go look into another profession, and quickly. You're in the wrong business! So, if your choice is taking a job at a loss, or sending your people home until you get a job that you can make a proffit on-then everyone goes home."

Dave

Thats also cold. But true enough.

Quote:
"Your main reason for being in business isn't to provide jobs for other people. You're in business to provide a service to your customers and to make a profit doing it."

Just because Stone feels that way, doesn't mean it is so for everyone.
There are many different reasons to be self-employed and an infinite combination of personality traits that may be held by any given business owner.

I quit "corporate America" out of disgust for the greed or those "profit obsessed" managers who run it.

I enjoy the freedom of being self-employed, and am happy to pay my bills. I have yet to determine my "target profit".
I have a good employee and when we are slow, I will try to find ways to keep him "whole", even if it means helping around the house.

I believe that the "cream rises to the top" and that if you offer a quality job to customers at a fair (to both parties) price, that you will be less likely to be slow, and, in time, the profits will follow.

[This message has been edited by Redsy (edited 04-02-2006).]

Redsy,

No offense, but lets talk again after you go through a slow spell, and do everything you can to keep your employee working. You have him even help around your house at your own personal expense. Then he comes to you and says "i want to do electrical work, not sheetrocking/landscaping/etc. X company is willing to pay me $1/hr more and they have tons of work. Sorry, I'm leaving"

It definately changes your attitude towards employees.

>>>>Then he comes to you and says "i want to do electrical work, not sheetrocking/landscaping/etc. X company is willing to pay me $1/hr more and they have tons of work. Sorry, I'm leaving"<<<<<<<

You now found out where his loyalty is...

Redsy, if you are in business for flexibility and freedom, and your not making lists about costs in your spare time, your a bad business man......(according to some on this board).......One more thing, if your slow, raise your rates, to get more work, didn't you read them books?....(sarcasm)


Dnk...

don't do that. Instead drop your pants, take jobs at a loss (hope for change orders to really screw the customer) and go into debt to keep help everyone else pay their bills.

Dnk, it has nothing to do with just raising prices - it has everything to do with raising yourself to a higher level of business. It's what you can do with the money from the higher prices (more advertising, more promotion, more profit - to help cover the slow periods)

What should you do when you are slow? Cut back on advertising? Cut back on marketing? Cut back on the things that make your company money?

Please, think before you speak.

Tiger..

>>>We all have them; they're part of the business. If you or your employees can't handle that, then you'd all better go look into another profession, and quickly. You're in the wrong business!<<<<

Tiger, if the employees are working in a business industry with up and down times, and they can't handle it, they should find another line of work, not the contractor...
After a couple years as a contractor under your belt, you will know when the slow times typically come, and with proper planning, you can overcome these.This works for both the contractor and the employee.

Dnk...

Sorry guys,

I just don't believe in "one size fits all" strategies for anything. Including running a business.

Again,
Different people have different priorities.
I read Stones book, and didn't care for most of it. If his ideals work for some people, so be it.

I, personally, have no aspirations to be more than a 2-3 man shop, and I believe that WITH THE RIGHT PERSON, loyalty is a 2-way street.

Good luck!

[This message has been edited by Redsy (edited 04-03-2006).]

I just don't believe in "one size fits all" strategies for anything. Including running a business. [quote]


Good response Redsy. I am with you. There are to many people on this forum who think their way is best for evrybody and they know everything.

Agree with Redsy also.......


Dnk....

"I just don't believe in "one size fits all" strategies for anything. Including running a business."

For any business, there are no "one size fits all" strategies, this is why business planning is vital to survive, knowing your market, and it's up, and down cycles, preparing ahead of time for shifts in the economy, have plans in place for a down turn, whatever the strategie you use.

I have not checked in on this thread for a while. I am very impressed with the thread, many good points.

Keep in mind I have not and probably never will run my own business. My comments are strictly from employees point of view.

I would think that the reason most of you started your own business was so it could be done your way. That being said there are as many ways to run a business as their are people.

You can certainly run your business strictly by the numbers its your option.

However I find it hard to believe you can keep talented people at your beck and call. Maybe your business can deal with 'green' employees after each slow spell, many businesses can not.

In December we where slow, today there are not enough hours in a week. I am running two jobs in neighboring towns along with preparing for a $450,000 job.

If I was laid off I would have found another job and not looked back. I am a talented valuable employee it would have been the companies loss.

As much as it is well within your rights as the business owner to lay me off it is within my rights to seek a more caring, compassionate company.

I believe you get what you give.

If your gift to me is a layoff we have little more to talk about.

JMO, Bob





[This message has been edited by iwire (edited 04-05-2006).]

I agree with iwire's points. But I would even suggest that caring and compassion don't have to have too much to do with it. I think there are appropriate times to take the loss at a slow time to make sure you are prepared for an upswing. Balance that loss against retraining or the expense of hiring. Ad, interview, wasted time, redoing the recently let go new guy's work.

When making difficult business decisions you need to take into account all costs, both the obvious and not so obvious. I have mentioned in the past about how difficult it can be to quantify productive momentum and the the types of decisions that kill it. I would consider this issue a business momentum issue on a different scale (much like the weak and strong forces in physics)

Odds are if you are panicked and stressed about downtime losses, you should probably let some people go. Doesn't mean the guy that retains his men at a loss doesn't know what he's doing. He probably understands his costs better than you.

Bob, it is interesting...

When your an employee, you believe the grass is always greener on the other side, but is it?

When your an employer, you try to make the grass as green as possible....

Dnk...

[This message has been edited by Dnkldorf (edited 04-05-2006).]

I am not sure what you mean.

I do not think the grass is greener for my employer.

Sure they make more than me, there is a good reason for that, they are the ones that stepped up to the plate and took a risk. Now they are the ones that have to chase the work, the money the IRS etc.

All I have to do is show up and do electric work (for the most part) which is what I like to do.

Bob

Bob, this is what I was trying to convey....

When I was working for someone, yrs ago, I always felt the grass was greener somewhere else....sometimes I was right, sometimes I was wrong.... I used to look at the labor rate the company charged for me and looked at what they paid me, and never really grasped the costs assoc. with employing me, and the other tangible business costs...I was young and nieve...young and dumb if you wish.....

Once I made the leap, I realized what it was really like to keep the grass green. It takes alot of work, and planning and thought...As an employee, I never thought of it the way I do now....

That is what is interesting here. I see how some think and now know why they think that way.....


Dnk...

[This message has been edited by Dnkldorf (edited 04-08-2006).]

The company I work for has over 90 electricians and they do get slow between the start of large jobs. I am in the service department where theres 7 of us. When the new construction side gets slow I do not believe they lay anyone off because they would never get them back or would they be able to hire new QUALIFIED people when the next job started. Theres too much of a demand for us down here and not enough of us to go around.

Weve been trying to hire two more service guys for the last six months and have not been able to hire any. My company pays the most in the area as far as I know and they don't bother you too much so it is a decent company to work for. I believe it makes more sense for a company the size of ours to have the guys do busy work around the shop than not be able to start the next large job due to lack of skilled labor.

I wouldnt expect a small company to go out of business and in debt to keep me employed, there are many opportunities out there so finding another job is not difficult. I would not leave the new company just because the smaller one had work again though.

There is an EC on another forum that uses the following as his signature.


I think that sums up some of the problems you business owner face.

Bob

I appreciate everyone's responses to this. This is my 21st year contracting, dnkldorf, but I've avoided employees like the plague. I see other people's employees & think..."I'm not paying for that." The other point I hear from contractors is that they went through 30 or 40 guys to get the good 3 or 4 that they have now.

In all my 21 years I haven't seen any time of year that is commonly slow. I've been busy and slow around every holiday & in every season.

My quote from Stone's book is a small piece of his thoughts on the matter. In other areas of the book he mentions the importance of creating a position with good pay & benefits so you have a reputation for being a high-quality employer which attracts high-quality technicians.

The advise from reno is another important point he makes. Your business is successful because you reach the sales goals you need to keep work coming down the pipeline.

Dave

I suppose im lucky,my boss is verry fair,he makes every employee an partner in the company after they show there loyalty and ability.therfore we all share in the ups and downs,and understand what it meens when we are slow, and we are all trying to get more work for the company.there are no layoffs becouse we just dont get the profits from the work that isnt there.when we are slow we go out and try to drum up more work.this also cuts down on moonlighting becouse we are all trying to help the company grow.

Sometimes we forget just how special we are...

Not to long back, I met a nice lady... who was amazed at how often I would come home for lunch, or finish early. My explanations that I was simply making use of my work schedule -which was often determined by the customer, or the nature of the work- was not truly understood.
Fast forward to today, where I have been working all sorts of hours in the past week. Long days. Early starts. Late finishes. Weekends. Evening service calls.

Only now is this lady beginning to understand what it means to be a contractor! Or, for that matter, the nature of construction!