Mike AndesFounder, Augusta Lawn Care and Homeworks · Founder of Homeworks and Augusta Lawn Care

If You Make More Profit You Can Pay Your Employees MORE!

6 Mar 2025 · 1 min

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0:50

Mike Andes shows home services businesses how to pay workers 30% more while cutting labor costs. The trick: tie pay to budgeted hours and productivity instead of clocked time, keeping direct labor under 30% of revenue.

Questions this video answers

Keep direct labor under 30% (of revenue).

About 30% more (example: $20/hour → $26/hour).

Based on how many budgeted hours they complete (performance), not on clocked hours.

Chapters

How are you going to make more and have very low cost of goods sold in terms of direct labor and also pay more to your employees? How is that possible? If you can get your direct labor cost under 30% many times that is a golden benchmark that I see for home services to be able to make a lot of money. Now, direct labor is the amount of wages that you have to spend for people to actually do the work in the field. Cost of goods sold, cogs. So that's make more. What about pay more? Pay more is I can have better wages than my competition. I'll be able to attract the best talent. I want to be able to pay my employees 30, 30% more than my competition. So if they're paying $20 per hour, I want to be able to give my employees at least $26 per hour or 30% more than my competition. I'm going to pay my employees based upon their performance. I'm going to pay them based upon how many budgeted hours they complete. Clocked hours don't make you money.