The fundamental problem with paying for time.
Every service business owner knows the dread of the “I need a raise” conversation. If you pay your team strictly for their time, your goals and your technicians' goals are fundamentally opposed. You win when jobs are done efficiently, and technicians win when they log more hours.
For Ron Williams, who runs a $5 million dual-trade operation, this bottleneck was becoming impossible to ignore. On hourly pay, his plumbers were incentivized to spot a problem, apply a quick fix, and immediately move on to the next call to log hours.
Artificially inflated labor rates
Worse than the band-aid fixes was how the team managed their jobs. To make their days easier, plumbers would constantly request an extra set of hands on-site.
“My plumbers would ask for another plumber to give them a hand. So that was driving my labor rate up.”
Having two high-paid technicians on a single job site reduced his margins on every job.
A hyper-competitive private equity landscape
Private equity companies are flooding into the Maryland market. Ron currently competes with seven PE-backed companies in his area. He realized he could not simply outspend these competitors — to survive, he needed his technicians to deliver incredible service and maximize the value of every service call.
Implementing performance pay.
Contractors have talked about performance pay for decades, but getting it right is notoriously difficult. If a compensation plan requires a CPA for a technician to understand their paycheck, they will never buy into it.
Ron tried multiple tools before finding ShareWillow. “I probably spent four or five thousand dollars on other systems trying to make it work. And every time I got to the bottom of it, it was just too complicated.”
Working directly with our team, Ron built a performance pay structure that dramatically changed his business. Here is the exact math he used:
- The GoalMaintain a strict 18% labor rate.
- The SplitPlumbers earn 9% on sold revenue + 9% on completed revenue (this keeps them wanting to do their own work, rather than passing it off).
- The FallbackTo comply with state labor laws, an hourly base pay stays in place. If a technician's earned commission is higher than their hourly base for the week, they receive the difference as a bonus.
What changed when Ron switched to performance pay.
1. Average tickets doubled
Previously, Ron's plumbers had an average ticket of around $800 to $1,000. Today, their average ticket is anywhere from $1,500 to $2,000.
Because their pay is tied to revenue, they now spend more time with customers and ensure they deliver a first-class experience.
“They are taking their time, they're doing a walkthrough, and they're going over everything with the customer instead of just looking for that one little band-aid fix.”
2. Labor rates dropped and raise requests vanished
Remember how plumbers used to ask for high-paid helpers? Now, they want to do the work themselves or bring an apprentice, because sharing the job means splitting the back-end commission — boosting Ron's labor rates.
On performance pay, the plumbers are now seeing an effective hourly rate of $55 to $60. And no one asks him for a raise anymore. Top performers control their own upside.
3. Techs bring in new business
Ron didn't stop at just optimizing plumbing tickets. He cross-trained his team to look for aging systems across trades, creating a stream of Tech Generated Leads (TGLs).
“They're smart enough to see that the fins are rusted out and there's nothing left to it. That's when they're going to do their cross sale and get the HVAC guy out there.”
By offering spiffs on these HVAC leads, Ron aims to pull one TGL out of every ten customers.
4. A-Players are knocking
Moving to performance pay didn't just motivate Ron's existing team — it turned his top performers into active recruiters. Ron just hired a new plumber and a new HVAC installer away from much larger competitors specifically because those competitors didn't offer incentive-based pay.
Why so many shops never get it right.
If you're reading this, you've likely thought about implementing performance pay. But getting it right is notoriously difficult. “I probably spent four or five thousand dollars on other systems trying to make it work. And every time I got to the bottom of it, it was just too complicated,” Ron told us.
If your compensation plan requires a CPA for a tech to understand their paycheck, they will never buy into it. ShareWillow is the exact opposite — a system that makes building and managing performance pay effortless.
“I will say for everybody out there dealing with ShareWillow, you guys have been super fabulous with tailor-fitting it to my business.”
