In the cleaning industry, you have two choices when it comes to paying your employees: by the hour or by the job. Both have their ups and downs, and there is this ongoing battle as to which way is better. There’s also a third option: hitting hourly goals with bonus incentives. With these options, which gets you the highest productivity and most satisfied customers while maintaining a healthy profit margin?
We’re going to break down all three ways to pay your cleaning employees efficiently so you can make an informed decision.
1. Pay by the hour
2. Pay by the job
3. Pay hourly with goals
1. Pay by the hour
This is a tried-and-true method, even in the cleaning industry. Yes, people can abuse this, but you can fix this by hiring quality people that care about doing a good job for a good paycheck, not just showing up for a job to get a paycheck. Here are the pros and cons of hourly wages for cleaning employees.
- Good wages motivate employees
- Motivated staff makes for happier clients
- Compliant with wage laws
- Compliant with overtime laws
- Raises are rewarding
- Simplifies bookkeeping
When you take good care of your employees, they take good care of your clients. Also, hourly wages provide a sense of security, allowing them to hit their hourly goals while focusing on getting the job done right. Your clients feel taken well care of and that can lead to a booming business. And honestly, who doesn’t love a raise?
On the legal side of things, an hourly wage effortlessly helps you comply with labor laws and keeps bookkeeping simple. The only thing you need to make sure you have in place is a clear overtime policy. Some employees simply work slower than others. If you can’t afford overtime yet, make sure you have law-abiding procedures in place that protect both you and your employees.
- Employees might work slower to “milk” the hours
- Can be limiting on a fast-paced, efficient employee
- Value can feel limited by wages
- Risk of lost income due to varied hours logged
To combat slow workers, you can set up jobs with time quotes. If an employee keeps taking longer than anticipated, then you know you have someone on your hands that cares more about their paycheck than your clients.
On the other hand, you may have highly motivated individuals who know how to do a great cleaning job quickly. When they get paid the same as a slower worker, it can be discouraging, unless you have incentives in place to reward high performance. However, that means pay outside hourly wages.
Also, hourly pay means you only get paid for when you work. In most cases, this means lost pay when calling out sick, an emergency happens, etc. We all know how stressful that can be. Unless there’s an opportunity to work outside set hours to make up for lost time, hourly employees will have to deal with the stress of potentially losing pay.
2. Pay by the job
There’s a certain type of employee that excels at this model: the ones who see the advantage of working quickly and efficiently to maximize earnings.
As your company grows, paying by the job can be a huge asset, especially when things are hopping. Still, there are pros and cons to this approach as well.
- A great motivator for employees
- Makes labor costs predictable with repeat jobs
- Creates opportunities or great pay
When figuring out the numbers, it’s nice for both you and clients to know exactly what everything is going to cost. On top of that, employees know how much work they need to do in order to hit a financial goal. The hours are more flexible, too, and creates options to make up for lost time.
- It can lead to rushed jobs
- It presents challenges with wage laws
- It can lead to complicated job restructuring to hit all your appointments
The cleaning industry leans heavily on quality work. Paying by the job can lead to the temptation to speed through work and miss details that cause clients to stop coming back. This method takes trust.
Getting paid by the job has to legally translate to meeting minimum wage standards. Pay can’t be arbitrary or whatever sounds fair. You have to take the law into consideration when quoting jobs.
As your company grows, chances are you’ll have cleaning crews instead of individual workers. Crews will be paid by jobs, but if you have to restructure crews when an employee calls out sick, then it can throw things off for everyone.
3. Pay hourly with goals
To put it simply, this third option means your employees are paid hourly but you give them a set number of tasks they are expected to complete within a set time limit. This gives you the advantage of meeting labor laws while providing incentives for employees motivated enough to work for them.
The upside is this combines the best of hourly and by-the-job pay. The downside is it still requires you and your employees to keep track of hours, and you have to have a clear measurable way of gauging quality.
One way to get around the quality problem is to have your clients rate the jobs. The better the job, the better the commissions. This neatly ties together speed and quality for those who are a great fit for your company.
As long as you follow through with appropriate rewards, your employees are going to feel valued and look forward to being praised both verbally and financially for a job well done. Pleasing both you and clients will be rewarding motivators.
Ultimately, paying employees what they’re worth (and you can afford) comes down to trust. Employees need to be able to trust you as their employer and know they’re valued. And you need to be able to trust them to represent you and your cleaning business well, to make clients happy and find gratification in a job well done.
Pro tip: Resist the urge to micromanage employees. Micromanaging does not instill trust; it instills resentment and kills productivity. Let them learn how to manage themselves so the company can run without you hovering over everyone. Read more tips on how to start your cleaning business here.
Not everyone’s cut out for the cleaning industry. There’s no magic formula for finding the right employees. With employment options comes a couple of other scenarios you’re bound to run into, so we’ve provided a couple of quick answers.
When should I fire someone?
This is one of the toughest parts of being a boss. It’s going to come up in any workplace. When you’re faced with having to choose between an employee’s job security or your company’s integrity and reputation.
No one can really tell you when and when not to fire someone. You’re going to have to review unsatisfactory employees on a case-by-case basis and keep legal parameters in mind. You don’t have to be paranoid about letting someone go, especially if they’re costing you money and clients.
One worthwhile thing to consider is to address said employee one-on-one and see if there’s anything you can do to help them improve. Life happens and sometimes an employee may not be aware of how their behavior is affecting their job and your company. If an employee is unwilling or unable to meet your standards, then that’s your cue to find someone who’s a better fit.
How do I make not paying overtime legal?
Ultimately, if an employee exceeds 40 hours on the clock, you are legally obligated to pay them overtime wages. You could face a lawsuit and up to hundreds of thousands of dollars in fines. The thing is, overtime is an entitlement, not a requirement, so if you limit employees to 40 hours, then it’s up to the employee to meet the limit.
To figure out whether your company must pay overtime, check out the Fair Labor Standards Act (FLSA), the federal wage and hour law that sets out the overtime rules. The legalese is already there so you don’t have to reinvent it.
Also, make sure you’re aware of your state overtime laws. Some go by the weekly total. Other states also take the daily total into consideration. For example, if an employee in California works 10 hours one day but only 6 the next, you’d have to pay two hours of overtime on the 10-hour day.
Please note: This blog post is for educational purposes only and does not constitute legal advice. Please consult a legal expert to address your specific needs.
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About the author. Entrepreneur and Cleaning Business Fan.
Hi! I am Shawn and I am a happy individual who happens to be an entrepreneur. I have owned several types of businesses in my life from a coffee shop to an import and export business to an online review business plus a few more and now I create online cleaning business resources for those interested in starting new ventures. It’s demanding work but I love it. I do it for those passionate about their business and their goals. That’s why when I meet a cleaning business owner, I see myself. I know how hard the struggle is to retain clients, find good employees and keep the business growing all while trying to stay competitive.
That’s why I created Cleaning Business Boss: I want to help cleaning business owners like you build a thriving business that brings you endless joy and supports your ideal lifestyle.