In the first chapter of his book The Complete Guide to Success, Jeff Campbell outlines why he prefers the revenue sharing method.  Not only does it encourage efficiency, he says, it also "acts as an incentive to be productive and helps workers focus on performing a quality job."  Losing a customer due to sloppy cleaning results in a pay cut for workers, so they are motivated to clean professionally. 

In Jeff's experience as owner of the San Francisco-based Clean Team cleaning company, he found that revenue sharing attracts higher-caliber employees who require less supervision.

Revenue sharing can also empower employees, contribute to team loyalty and enhance your employee's job satisfaction -- all good things in terms of promoting retention among your personnel.

Revenue Sharing: The Disadvantages
While a per-house fee structure monetizes efficiency and productivity, it might also compromise thoroughness.  And although more houses cleaned means more profits, clients will quickly find another housecleaning company if they aren't satisfied with the job done.

That was the conclusion reached by Andrew Yurchuck, C.E.O. of New Jersey's Classic Cleaning and Bio-Clean, after just six months of paying his cleaners a per-house fee.  

Andrew noticed that salaries based on percentages "encourage[d] employees to cut corners and do the minimum acceptable work to satisfy the client." He found that when he shared a percentage of revenues, "most cleaners just won't go the extra mile."

In fact, he says, the rush to finish quickly can lead not only to a less-than spotless home, but also to more harmful consequences, such as more frequent breakage in customers' homes and even more speeding tickets in company cars (as cleaners rush to the next job.)

Hourly Wages: The Advantages
Paying your cleaners an hourly wage is a clear-cut, readily understood compensation method.  Your employees know how much they will earn every paycheck, which isn't necessarily the case with a revenue sharing plan.

Before Andrew Yurchuck switched to the hourly wage method, he found that, "Most employees had a difficult time comprehending a percentage of the job pay plan."

Paying by the hour also gives employees that added wiggle room to be able to exercise their judgment if a house needs a few more minutes of cleaning. Andrew found that when he was paying a percentage of the job, "most cleaners just [wouldn't] go the extra mile."

Hourly Wages: The Disadvantages
By paying a set hourly fee, you remove the monetary incentive for efficiency, which the revenue sharing method encourages.  Owners can compensate for this by tracking labor costs as a percentage of gross profits. Breaking down those statistics by cleaner (or team of cleaners) allows you to pinpoint the source of the efficiency leak.  Once identified, you can provide targeted efficiency training for those cleaners while closely monitoring their improvement.

Another disadvantage of hourly wages is that they may attract less motivated, committed employees, which could lead to a higher turn-over rate.  As your cleaners are the backbone of your company, a high turn-over rate can cost you dearly -- both in terms of recruiting and training and in terms of company morale.  

One way to limit time inefficiency is to tell your team how long they have to clean a particular house. While setting a fixed cleaning time helps employers maintain control over labor costs, it also eliminates one of the primary benefits of an hourly wage -- ie. that cleaners have some wiggle room to stay a bit longer if the job demands it.  If you elect to go this route, you must be very confident in your ability to estimate how long a house will take to clean; for seasoned professionals, this is generally not a problem.  Too short of an estimate, however, could run the risk of an unsatisfied customer.  If you pay this way, avoid giving all 3 bedroom houses the same cleaning time,  For example, one 3 bedroom house may have kids, dogs, cats, and clutter.  The other one may have only 2 adults, some rooms not used at all and no clutter. 

Given the advantages and disadvantages of both the hourly fee and the revenue sharing methods, it is clear that neither method is flawless.  One of them, however, will be the right choice for your housecleaning business.  Which one is it for you?