Mike Minutes Mastermind (Jobs Report) 05/06/22

Good morning Augusta Nation. I'm going to go over a few new things here, more concerning jobs and hiring and the overall market. And then I will go over a few questions that came in. First thing, wages are up right now 5, 5.05% year over year. Unemployment in the United States is 3.6%.

Hasn'T been lower than this in terms of unemployment for many, many years. And that's what we're all feeling the pain of. And I feel like this past week it seems like every single day it has been every single day there's been multiple owners contact me kind of in 9, 11 status of employees leaving behind on jobs, weather being bad, but mostly revolving all around fact that employees are just literally leaving or you have to fire them, etc. A couple other things that I want to look at in terms of data. When we look at inflation being around 8, 9% and probably more like 10 or 12% when you actually look at what's affecting the average citizen, let's just say it's 8%. What what's been really important, something I've been watching for the past six to eight months is making sure that we don't have what's called a wage price spiral. And what that means is, is where wages go up and because employees make more money then they spend more. That causes businesses to be able to raise prices because everyone's spending, spending, spending and we get inflation, people just keep raising their prices and businesses just can keep doing it because everyone's making more money and then just self fulfilling profits. Well now the prices are higher, now employees need more money and then because they need more money, they get paid more. Because they get paid more, they start buying more. And because they start buying more, businesses start to raise prices more. That's what is a wage price file causes massive hyperinflation. And it was the main thing I've been looking at over the last six to eight months. And over the past couple months I've been consoled by the fact that that's not happening. And you can tell by the fact that inflation is higher right now than the year over year growth of wages. So I would be very concerned if wages were going up 10% and inflation was 8%. I'd be very concerned then that next month it was 11% for wage increase and 9% inflation. If that was happening, we'd be in a wreck right now. So I don't feel like this is a long term 10 year depression that we're going into. Just FYI. And I know a lot of you. When you have three or four employees walk out and you're down to you and one other person, it can very quickly become very gray. Very quickly. The day comes very bad very quickly. I understand that. We have gone through that. I've gone through that. And it's extremely debilitating. It's extremely emotionally draining and psychologically damaging to be able to come to like conference, for example, in January. You got all these goals and plans for growing the business. And then you think you get enough employees and you've hired up and like, man, I'm ready to go. And then all of a sudden spring rush hits, you get tons of work, like, let's go. And then bam, employees leave or you have to fire them or they just don't show up or they stop showing up consistently, like, whatever it might be. So let me give you my two cents on this stuff, okay? And maybe I'm wrong, but if you look at the average net worth of a United States citizen in a household over the past three years, if you compare it against three years ago to 2019, the average net worth of a household in the United States is 140% higher today. Okay, 140% higher today. I'm shocked that politicians have not jumped all over this number. It's pretty clear and tried to herald this as some sort of equality thing. The reason they're not is because if they did, they would also then have to take blame for all of the inflation that's happening. And that's what everyone's mad about right now. But at the end of the day, right now, the average, again, the average. So there's people making way more money on the top end. And that's what people are mad about. The rich are getting richer. But because so many of the of the lower class has made substantially more money because of wage increases, because of stimulus, because of tax credits, because of, because of all sorts of stuff. There's still tons of rent forgiveness to be that is being doled out in many states, from the states.

So when you increase your net worth by 140%. On average. On average, 140%. That being said, the average renter's net worth is somewhere between 4 and $5,000. So if that goes up to say 9,000 or $10,000, that's like 100% increase, right? But when the, when you have the average net worth going up 140%, guess what? People feel rich.

Employees feel rich. And that literally might mean their net worth went from $2,000 to $5,000, but they feel rich. It's all relative speaking. And so what does this mean? This is what my opinion is. Unemployment, super low. Got a lot of options that employees have to be able to get hired. They're looking for other jobs that they can get more, more money from, etc. Which is completely fine in a healthy economy. However, because they all have so much net worth increase, 140%, their net worth has gone up. They do not feel like they need money. Here's the brain twist for all of us that are money motivated and have started businesses because we want to make money.

Is that employees don't care about money very much right now. They have a lot of net worth comparatively to a few years ago, and they have a ton of other options to make more money by simply just moving jobs.

When you look at why they're moving, why jobs are leaving, it's actually not a lot to do with making more money. Right? So there's a survey I want to share one of these days. I'll share with everyone. They're not leaving because of money. They're leaving because of other things. And so this is my theory, this is my opinion. And we've done this at the Bellingham shop, like I mentioned in January, we are working towards this.

Mentality at Command Center. It's going to take us a lot longer because there's just so many more people. But it is a matter of we are not going to expect people to work 40 hours in a week. We are going to plan and schedule for people who work 32 to 34 hours in a work week.

Get this job report came out this morning. The average number of hours worked in a week, 34.6. 34.6.

Went down to 34.4. So people are working less. And again, you can, we can complain about this. We can talk about how back in the day, we work 55 hours a week, we work Saturdays, et cetera. It's not going to work anymore. And so when it comes to rebuilding your culture, rebuilding employees, getting new hires after people have left, I would highly recommend to start budgeting as if they're going to work 32 to 34 hours a week because they do not feel like they need the money. The net worth angle.

Of them feeling like they have more money, as bad of an idea as that is from a financial perspective, is what's driving all of this behavior. And so they're leaving because they don't like working outside. They're leaving because they feel exhausted. They're leaving because after a Week of rain and working outside. It feels very appealing to go make the same amount of money in an Amazon fulfillment center or just check out at Target. That's what's happening. And so the only thing that we can do, because we can't change the work, we can't change the fact that we do lawn care landscape, we can't change that. But what you can do is reduce the workload. And what that means is actually really, really messed up. And that is you got to find more people. Because this is the problem. This is the spiral that happened at Command Center a few months ago has happened for all of us. When we're losing employees is when you lose the employees, the workload then increases on the people who stay. That increase in workload creates more morale to go down. And then they, it's just a self fulfilling prophecy because now they, they leave and just constant churn. And so that's what made me so mad the other day by the way, when politicians are heralding churn as a good thing and all of us small business owners are just dying because of it. But anyways, I would Recommend Scheduling for 32 to 34 hours a week. We did this at the Bellingham shop. We've done this all year. They haven't had to work a single Saturday. Overtime literally never happens.

And if it does, it's only because someone's job went way over and they say had to stay late. But like it doesn't happen.

So Fridays are usually pretty light days and it stinks because revenues down. Revenues are down compared to last year. Like the local shop for example, because we, we had to start with a smaller group of people and then we've slowly been building it. So every week or two we're adding one person right now because we have a good strong core group. And that's what I'd recommend doing. Like strip down how many hours per week you're requiring people to work by reducing your workload and your capacity for budget hours per week. Hire, you're going to have to hire more people. That's the hard part. It's like, well, I can't even find anybody. I understand. That's the hard part is you have to have less work for out less work hours per week. Therefore having to find more people in a very hard labor market. That's what takes the time to build the culture like the team back up. So a lot of you in the past week, what's demoralizing, what's crushing is when you have three, four, five or six employees and you lose two. Because if you lose two employees and you have 10 or 15 employees, it's like, look, we're all going to work a couple extra hard weeks. We're going to have a couple weeks to find new employees. We'll get them back. It'll be no problem. When you have four employees and two of them walk off the job and you have to cancel jobs, you're, you have to all work long, long, long days and hours. And now you're running the risk and jeopardizing those two employees that are staying because they might leave when they have to work 55 hours and Saturday and Sunday to catch up. So it's just a self fulfilling prophecy. But as you start hiring right now, it's like the worst time right now to have to think about this is spring rush. You have to over, you have to hire more people and then have them work less hours so that when they don't show up to work, you plan for that. You've scheduled, you've literally scheduled. Everyone's going to like not show up one day a week. And so, you know, again, it's very easy to look back five, 10 years ago, as I did myself a couple years back when we were starting to face these issues and be like, man, the average, the average we would work was 50 hours a week. And there used to be, we would never like, I, we never took holidays. But I'm talking eight, nine years ago. When I first started Augusta, I didn't even know that you're supposed to let employees off for holidays. We never not did not work a Saturday. Like we always work Saturday. The only day we took off, which is July 4th for the parade, because we were in the parade.

That is not going to work now. Like that kind of mentality will not work. And so it's a bit of a brain twist and that you need to hire more people and they only work less hours. And I truly believe that's why a lot of us are leaving employees. And it's very difficult. It's easy for me to say that now, but it's hard when you just lost two employees. You have four of them and now your workload just doubled and now I'm telling you to have them work less hours. So it's extremely difficult. Just know that this is across the board. This is not just one of us. Like I'm talking literally every single day, my phone is at some point having a 911 call of I just lost three, four employees. I just lost two employees. They just walked off the Job. No one showed up today. I have 40 hours worth of work today and no one showed up. That happened this week. But it's not just Augusta. This is happening across small businesses. I just talked to a regional manager for McDonald's. The first time in their career that McDonald's regionally lost money because their wages have had to gone up, have had to go up by 60% and they lost money. McDonald's lost money.

Because of this and they're still struggling to find employees. So this is not easy. It's very, very difficult. And honestly, like I said the other day, a recession might be the best thing that happens for us as small business owners so that the unemployment rate can go up. And now people need work. They don't have a massive amount of net worth. They feel like they need a job and they come back to work. So anyways, all right, questions? Yeah, but low employee hours could be employers cutting costs as well.

Yes. The 34 though, the 34 hours that I was mentioning, that has been relatively stable. It's gone down. It went down from 34.6 to 34.4 over last quarter. But honestly, I feel like some of that's honestly just because of omicron people taking off like a week or two because they test positive that reduces the hours. But when you look at the average number of work week, work hours per week, that has been slowly trickling down for like a decade in the United States and it's almost very common in Europe right now. 30 hour work weeks, by the way. 30 and 32. So again, like what I've talked about with like the whole economy shifting towards what's going on in Europe and Australia, it's the same work. It's the worker mentality is also shifting like it is over there too because of so much more government programs and things.

Yep, exactly. All right, there's a few questions that came in on the form. Let me go through these. Number one, Kevin from Mississippi, how can I set up a text to go out as well when I email an invoice on service autopilot have to have text go as well as email with all the junk emails these days, more and more people are not checking their emails near as much anymore. But we'll check or see a text. Perfect example. Harley ever checks her email but sees all our texts there. There has been more problems this year with clients not seeing this or that on their email. But when the past due automation kicks in and sends a past due text, they call quickly. Yes. So inside. Super. We already have the setup where when invoice goes out it's already sending them a text immediately as well. The text inside service autoplay don't look as clean honestly because they have a big link and things like that. So we have not used those and it's just not as smooth of an integration to be honest with you. But it is absolutely possible and what you would do is you would set up the automation to send out a text based upon when the estimate is changed from draft to sent and so that can be done inside your automations and just literally use just make that text as short as possible. There's nothing worse than having a very very long text and making it look as clean as you possibly can would be my goal on those. So you can absolutely do that. Just make it based. The trigger would be when the status of an estimate is sent. Change to sent.

Bloomington, your thoughts on how to help an employee use terrible with their personal finances. Example is he spent all his last check within four to five days on on things that I could have waited that I feel could have waited. He is now struggling to have enough gas to get to work or find someone to bring him. I have helped him make ends meet before he worked with worked for me but I feel it is about time he learned how to handle his money instead of enabling him. I also don't want to stick my business where it don't belong but he is very open about his outside of work life but then will come to me and ask for help. So again, sometimes you can't help people until they ask for help from you. And so my theory a lot of times when people are doing something financially imprudent and I have some sort of connection with them, whether it be employee or family or friend or whatever is honestly most people will not take advice until they actually crash and burn and they need help from you, right? So when someone comes to you asking for help, you are in a place of power to make recommendations and then demand changes if needed. And so I would recommend waiting for someone like your employee to come to you and be like hey, I need help with X, Y and Z. And if this has been a constant issue, this is your time. You'd be like hey, I'm going to give you some money, I'm going to help you tie over. But this is the last time and this is what I recommend you do to change this from ever happening again and making it very decisive that this is the last time you're helping the person and this is why they keep following the issue and Have a bit of a ready presentation to be able to give them is what I would say. It sounds like this person you kind of know outside of work too. That's why I would say give them one more chance kind of thing. At the local shop, we have it very clear. It's in the employee handbook. There are no, you know, payday loans. There are no, like pay advances. It never has worked out well for us. It has never worked out where, like suddenly the employee manages their finances well. Never has worked.

And so if they get $400 from next week's paycheck, next week comes and they make $400 less than just a constant. Right. So, um, someone's operating like that, it's a matter of like, look, if you've been helping them, this is the last one. Here's what you need to do to change, because this is not happening again. But we make it very clear there are no pay advances. I feel like it's just as detrimental to the employee like you, like you're just being so mean to your employees. No, it's really bad behavior and bad for them to be have to come to you as an employer and ask for a payday or a pay advance. It's extremely bad for their financial psychology. So.

Okay is an anonymous one. There are more important things to do in a day than I can find time for. It makes me feel guilt, like I'm procrastinating. But I'm really doing my best to prioritize what's most important every day and do that. There's just not enough time for everything. How do you deal with this? It's a good question.

This is basically business ownership, especially as you begin to grow. As you begin to grow, like we talked about at conference, it goes from physical stress to financial stress to psychological stress. Usually when you're in the wilderness of business, which I've talked about, the stage three of growth, which is 200,000 to 500,000 revenue. When you're in that, in that zone, you typically have an equal balance of all three or an extra helping of all three types of stress. Physical, financial, and psychological. That's why I want people to get past that stage because they at least can drop off the physical stress that comes with the business of actually working hard all day long. 14, 15, 20 hours a day.

So when it comes to guilt around procrastinating, you have to realize that prioritization and execution is part of time management. It is part of becoming a better executive, a better owner, a better leader is realizing that when you prioritize and execute. It means things will not get done. It means things will fall through the cracks. It means that you will not be able to get to everything.

And that's for someone that is type A. Someone that wants to get things that you don't like disappointing people. Very, very difficult. It's difficult for me when, for example. Let me give you an example. There's things inside service. All I know, we could do better on and we could fix with the automations, we can improve, we could change the processes, etc. But I have to prioritize and execute on the fact that I cannot do that really well, as well as make sure that Zooper's up and ready for everyone to transition in January. So I understand that. I know I could create a text automation, for example. I'll just be honest with everyone. So with South Haven, with Kevin, I know we could build that. I could create all sorts of videos on how to make the text better, make the automation, set up all the rest of it. But that would be prioritizing something that I know in 12 months we're not even going to be using and that I need to prioritize. Super. Because I know in 12 months that's what Kevin will be using and that's what I need to perfect. And so I'm only using myself. An example, because every single one of us in our day have this, whether it be sharpening blades. Okay, well, like, when do I sharpen the blades? Well, when do I go? I need to employ people. Like, I just had three people leave. When do I go hire someone? Okay, I need to balance the books. Like I need to finish payroll. I need to. I know I need to send out invoices. I have a whole bunch of overdues I need to collect on. These are all things that are priorities that you have to organize and execute on the highest ones. And so feeling guilty about letting things dwell through the cracks is a recipe for disaster. You cannot feel guilty. You can feel responsible for those things and take ownership of those things. But ultimately you only have 24 hours in a day. You can only get so much done, and you can only do so much. And so beating yourself up for not doing everything is a recipe for ultimate failure and giving up. Because time is finite. You only have 24 hours in a day. So beating yourself up because you don't have a 25th hour to get more done is. You will always. It'll always lead to depression. It'll always lead to just beating yourself up and feeling very, very horrible.

And being like, it just be, yeah, depressing. And so you have to realize that if you have a hundred things you need to do in a day, you're only gonna get 10 done. So your go, your goal should not be beating yourself up over the 90 things that are gonna fall through the cracks. It's the, you gotta beat yourself up over the fact that spend time to make sure you're spending your time on the most priority 10 things, not the most urgent things. Focusing on the things that are most important, not the most urgent. Right. And so, you know, yes, the blades need to be sharpened, but is that more important than making sure you hire two more people? You should probably prioritize the interviews, right? And so those are the type of things I'd be thinking about. But don't beat yourself up. How I deal with this is just a matter of I know I'm trying my best and I'm putting in everything I possibly have into whatever I'm doing. So when things fall through the cracks, I realize that is not a matter of me being a failure, it's a matter of me having to prioritize other things over them. And that is life. It's not just because you're a business owner. That is life. In, in family, in relationships, you have to prioritize and execute because there's never going to be enough time in a day. You cannot create time. Time is finite. You can only organize time and you can only reshuffle those priorities to make sure you get the done the, the highest level things in the business and in your personal life and your family life. That is why some people will say, I do not have time to work out. They have not prioritized that thing in their life. So they become fat. They, I don't have the time to eat healthy, I don't have the time to meal prep. Those have just not become priorities in their life. And no one else besides you can determine what those priorities are in your life and in your business. So for one person, they'd rather gain £50 but not take the time to work out because they're prioritizing maybe family time or their business or making money or their career. And that's fine. That's a choice you have. So we cannot create time. We cannot do everything that we want to do get done in a day. But what we do have the power to do is reshuffle and organize, prioritize. And so being very clear and intentional with that will sometimes hopefully give you the.

Confidence, knowing that that's the only thing you can control because you cannot create more time. Go. All right, really quickly here. With our home value doubling three years since we bought it, I want to sell the home, move into our parents rv, go into a storage unit for the business and use the 100 grand to fuel the business and get to where we want quicker and minimize our.

I'm sure this is another word. Any tips on how to convince the wife?

I wouldn't try to convince her. I would try to show her again, I'm not married. So like take all that with a grain of salt. I wouldn't try to convince my wife of anything. I would try to look at her as a partner and she has to be on board. And again, this is, this is Mike's opinion. So you can log off from here on out if you like. When it comes to relationships and partners, if you actually have a wife and you actually look at it as a partnership for life, I'm not going to try to convince someone of anything. I'm going to make sure that we're on the same page and we both have the same goal and we see why we're sacrificing in the short term and if that's not going to happen. And again, Mike has never been been married. So take all this with a grain of salt. If she ever.

So funny. But like, in my opinion, if I was to ever have a wife and she disagreed with like, hey, I need to like, we're going to go move into a closet for the next few years so we can grow Augusta. And she was like, no, that's not happening. I would have to. If she said no, it's off. Now if I could talk about, hey, here's the benefits. In five years, this is what I believe will happen. Here's where I'm spending the money and then she agrees and she's actually wants it, then I'd probably listen and I'd probably go forward with it. But if someone is.

Married and you want to have that partner for life, I would make sure that you're not convincing them of short term sacrifice. Because short term sacrifice in business is two to three, five years. It's not like, hey, honey, we're going to sell the house, make a bunch of money in our bank account so you feel good and we're going to live in a camper. No, like that sounds great until six months later, it's cold outside, the electric's not working and there's no shower. Like that becomes a big problem. And now it leads to the business actually doing worse. Because then your family life starts to suffer and again, the priorities of your life start to reshuffle themselves. And all of a sudden that relationship goes to the top because it's on the rocks, causes the business to fall. Right. So it's all. It's not about balance. Like, I'm not into balance, but it's about reshuffling. Prioritize priorities and making sure that very important things like a relationship don't fall so far down that then it affects things like the business. Right. Or vice versa. Right. Make sure the business doesn't get so prioritized, then it affects the relationship. Right? So awesome. We're going to call it a day. Thanks so much, everyone. I hope you had a great.

Hope you have a great Friday this weekend. For those of you that are really struggling with the employee side of things, I know exactly where you're at. You are not alone. This is happening across the board, across the system, across small business right now. And I'm almost hoping for a recession at this point to get the unemployment rate up and for us to be able to have employees that want to come to work and that are hungry for jobs. So.