Improve your landscape maintenance margins

July 2, 2014 -  By
Photo: Stuart Miles / Freedigitalphotos.net

Photo: Stuart Miles / Freedigitalphotos.net

There’s hardly a contractor who’s not concerned with pricing challenges and the negative impact they have on gross margins.

The competitive environment has put enormous pressure on service companies to find savings wherever possible. As a result, many maintenance companies take the easy way out. They cut hours and force crews to do more work in less time.

This is one possibility, but only if done in a thoughtful way.

A better solution is a multipronged approach that could actually improve performance and quality while finding savings at the same time.

If you have job costs, look at the largest jobs performing at the lowest gross margins. See if you can reconstruct the crew to yield a lower average hourly wage. You might be able to replace some of the crew with lower paid people and lower the average hourly wage.

On these same larger jobs, observe the crews at work. Are they using the right equipment and are they performing the work tasks as were bid? Look for ways to make them more efficient. Are they using small mowers to mow areas that could be mowed with larger mowers? This consumes unnecessary labor. Are they over detailing with a string trimmer? This, too, is a time waster.

Eliminating the over-servicing of properties can save significant costs. For example, mowing is a very repetitive operation. In most markets, mowing is a weekly service that may be as much as 80 percent of the hours spent on a site. There will be weeks when, due to dry conditions, you could skip mowing in whole or in part. You may not have to trim soft edges due to little or no growth. Omitting tasks when they’re not necessary can deliver big savings. Your supervisors should be on the lookout for these opportunities and should make sure the crews know to take advantage of them for labor-saving solutions.

Inspection is important to maintain a high-performing crew. Look at your work crews and your routes. Can you redistribute labor to improve their performance levels? Can you reconfigure to boost route gross margin by replacing a high-paid crew member with a lower-paid crew member? Can you combine small routes (with a small two-man crew) to make a larger crew with one crew leader and three lower-paid crew members, thereby lowering the average hourly wage? These types of changes are tough choices to make because they have human costs, which could translate to possible layoffs. But sometimes you must make these difficult decisions. Over time, crew members with no demonstrated potential to become crew leaders continue to get cost-of-living increases and become overpaid. Staff members who aren’t on the path to advancement often can be replaced by lower-paid employees.

Material use is another place for saving. Look for opportunities to make spot treatments of herbicides and pesticides rather than using blanket applications.

Using plant growth regulators can reduce the pruning required on fast-growing plants or plants that are difficult to prune efficiently due
to access issues.

Be sure your crews are up to date on their training. The latest tools can translate to big savings. But the efficiencies your crews might get from using products and equipment will be lost if they’re not kept current on how to use them.

Having a well-trained team of supervisors also can play a key role in lowering costs. Make sure your supervisors know the impact they have on managing costs, and know what to look for. Often supervisors become firefighters and end up doing the crew leaders’ work.

Cutting hours overall can compromise quality. If crews are told to do a job in eight hours rather than 10, they often shortchange important tasks or skip steps. If you make smart decisions to save on labor, you can usually make significant cuts without sacrificing the quality of your work.

Photo: Stuart Miles / Freedigitalphotos.net

About the Author:

The author, of the Wilson-Oyler Group, is a 30-year industry veteran. Reach him at bwilson@wilson-oyler.com.

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