“Clocking” Profits

Suzanne Wedeven spends her days coaching home service companies nationwide, helping them identify hidden cash leaks in their operations. One of the biggest culprits? Untracked time. From wasted hours between jobs to inefficient scheduling, companies often hemorrhage profits without even realizing it. But the good news is—minor adjustments can lead to significant financial wins.

Labor costs are one of the biggest expenses in any home service business. From plumbing and drain cleaning to HVAC and electrical work, your team is your biggest asset, but they can also be your biggest liability if labor costs are not controlled. Left unchecked, rising wages, overtime, inefficient scheduling, and unproductive work habits can quickly eat into your profit margins. The good news is that you can rein in labor costs without sacrificing service quality or employee satisfaction with the right strategies! Let’s begin:

Managing Overtime to Protect Profits

One of the most common ways labor costs spiral out of control is through excessive overtime. While some overtime is inevitable in the home service industry, too much of it is often a sign of poor scheduling or inefficiencies.

If your technicians work overtime to complete their assigned jobs, it might be time to re-evaluate your dispatching and job scheduling processes. Optimizing job assignments, setting clear overtime policies, and tracking time spent on each service call can help reduce unnecessary labor expenses while ensuring your team remains productive.

Boosting Productivity: Work Smarter, Not Harder

Just because an employee is clocked in does not mean they are making money for the business. Untracked time, inefficient work habits, and unnecessary downtime all add up, leading to lost revenue.

A well-structured performance tracking system can make all the difference. Monitoring key metrics such as wrench turning time completed daily, revenue per job, and customer satisfaction scores can help identify areas where employees need additional training or support. Incentivizing high performance with bonus structures can also encourage technicians to work more efficiently and maximize their earning potential while increasing company profits.

Reducing Employee Turnover: Keep Your Best Talent

Employee turnover is another hidden cost that many business owners fail to account for. Constantly hiring and training new employees not only consumes time and resources but also disrupts productivity. When employees do not see a future with your company, they are more likely to leave, forcing you to start the hiring process all over again.

Retaining top talent requires more than just a competitive paycheck. It involves creating a positive work environment, offering career growth opportunities, and providing ongoing training to keep employees engaged. Investing in your team’s development can reduce turnover, improve morale, and ultimately lead to a more profitable business.

Eliminating Non-Billable Time: Maximize Every Hour

One of the easiest ways to reduce labor costs is by eliminating non-billable time. If your technicians spend too much time waiting on job details, gathering supplies, or handling administrative work, you are paying for hours that are not generating revenue.

Streamlining operations with field service management software can minimize these inefficiencies. Optimizing scheduling, invoicing, and job tracking allows your technicians to focus on what they do best – wrench turning and generating revenue. Ensuring service vehicles are properly stocked, and technicians have all necessary tools before heading to a job can also prevent wasted time on unnecessary supply runs.

Aligning Pay with Performance: Reward Productivity

Aligning pay structures with performance is another crucial step in controlling labor costs. Paying employees a flat hourly wage regardless of their efficiency can result in wasted time and lower motivation.

Performance-based pay models, where technicians earn more based on revenue generated, can drive productivity and ensure that labor costs align with the value being created. Structured bonus programs for upsells, efficiency and positive customer feedback can motivate employees to go the extra mile while keeping costs in check.

Conclusion: Small Changes, Big Financial Gains

Ultimately, labor costs do not have to drain your profits if you take a proactive approach. By optimizing scheduling, improving productivity, reducing turnover, and leveraging technology, you can create a more efficient workforce that delivers high-quality service without breaking the bank. The key is to track where your labor dollars are going and make data-driven decisions that ensure every hour worked contributes to your bottom line.

Efficiency is not about doing more work – it is about doing the right work, the right way, at the right time. Need help optimizing your operations? Schedule some time with our coaching team!