From The Stimson Group

Q: We can't hire or find enough qualified installers. We've even gone to neighboring cities and offered to relocate. Any other suggestions?

AV is a unique industry in a lot of ways, but work is work. Hiring good workers should be our highest priority in personnel. What concerns me is that too many companies feel they need to hire trained personnel - and right now. The only trained AV personnel you will find are the ones that your competitors let go or couldn't keep. Unless you are the industry leader everyone wants to work for (and therefore don't have this problem to begin with), transient techs will look at you as a stopover on their way to the big leagues. And, it is very rare that someone else's failure will be your success. That's not to say there aren't great techs in transition - that shouldn't be your whole plan for adding personnel. Put that energy into keeping the ones you've got.

The long term solution is to hire good work ethic, spirit, attitude - whatever you call it - whenever and wherever you find them. The key to making this work is to make training part of your culture. Let go of the notion that each new hire has to be working billable hours on day 1. Make them an extra person for the first two or three months and let them soak up that OTJT (on the job training). Move them around the company and find out what they are good at. Having two or three of these folks in the system at the same time actually improves your chances of success. The new hires can see what is working for other new hires.

The key to this method is the probationary review process. After one month, sit the new hire down and ask them what they've learned. Give them some tips for being successful. After three months, have a formal review and make a decision on whether to keep them on forever or let them go now. If you feel that you need to give them more time before you make that decision, you probably should have let them go. If you keep them, give them a good raise and a set of tools. Then get them ready for their CTS by end of year one.

I can hear the complaints now - we can't afford to do that! Do the math. If you can hire two good prospects (or three) for the cost of one trained tech and end up with one good tech at a much lower rate - what was your total investment by the end of the year? Start with good people, add training, take care of them, repeat.

Q: I am not sure we have the right sales commission structure in place. What works best for staging companies?

The rule of thumb for commissions - or any incentive for that matter - is to reward the behavior you want to repeat. Successful incentive programs tailor rewards to outcomes the recipient has some control over. Be careful what you wish for though. Sometimes the results can have detrimental effects. For instance, it is not unusual in sales-driven companies to base sales commissions on gross revenues. Rental & Staging companies should probably not choose this path. The tendency is to sell anything and everything and let operations figure out how to make money. The variable costs are almost impossible to manage.

Some companies choose to apply job costing methods that allow them to pay commissions by the show. This usually ends up in a battle between sales and operations over internal resources. Decisions based on job-cost can also be customer relationship killers. Would you cut corners on a good customer for the sake of one show? Perhaps the most detrimental effect of job-costing is that it promotes selling the available solution instead of the right one. In general I do not recommend job-cost based incentives as a primary means of commission.

Consider using a combination of volume and profitability. If you want more business, apply special new business commissions that kick in if existing business levels are maintained. In other words, don't sacrifice current business for new customers. If you want increased profits, figure which cost centers need the most improvement and base commissions on improvements in those areas. Jobs that underestimate labor are a huge drain on profits in AV Staging. Reward smarter selling.

Finally, firms with strong outside sales efforts that utilize show or project managers to maintain relationships should consider commission pools. Sales persons earn big credits for bringing in new work, and those commissions slowly convert to a bonus pool for the rest of the firm. Project Coordinators earn increasing shares for maintaining repeat business.

There is no end to the combinations of incentives that might work for you. Describe the behavior or outcome you wish to reinforce before you consider any commission plan. Remember that finding new customers is critical, but that keeping customers is cheaper and easier; and profit is always a company effort.