The Most Underrated Business Metric

How long your employees stay with you is the most underrated metric in business. When I look at the great entrepreneurs of all time, most of them had a core group of people that stuck with them for decades. Everyone talks about customer churn, but employee churn is slowly eating your profits and your culture. My name is Mike Andes. I started a 200-location franchise and employ over 120 team members. In this video, I will show you why keeping your team is more important than gaining new customers. Now I'm gonna attack this from two different elements. One is the need for technicians, entry-level team members, and then also for management and for leadership. So why is it important to retain great technicians out in the field for your home service business? Because if you start every spring rush when you're gonna get this influx of new leads, and you have a whole bunch of newbies out in the field, it is very difficult to train new employees. It is also very hard to keep the standard of service high when you're teaching everyone how to do the job. Training costs for new team members is one of those things that it just wraps up into payroll. It is not only costing you a lot of money to train new team members, there's a lot of morale and culture issues if you have a whole bunch of churn and it feels like a dead-end job. For example, if I join mowing grass for your business and in the first 2 weeks I see 4 people bail and they're leaving for other positions, they're leaving for more money, they're leaving for whatever reason, it doesn't feel like a place I'm going to put my roots down and be able to grow with the organization. Despite what is said to me in onboarding, despite what is said to me from the owner or my manager, I just believe that if I have a group of 8 people and within a couple weeks 4 of them have left, that this is probably not a place I'm gonna be at long-term. I'm probably going to be like my coworkers that went and found another opportunity, made more money, got to the next stage of their career outside of the organization. Now, I'll take this as an example for Command Center where we hire people to answer the phone. From an administrative perspective, relatively entry-level. We usually get them with experience from other phone centers. However— Relatively entry-level. However, Over the past 3 years, we've had near zero churn. Back in 2020, 2021, that was a different era, it was crazy. But in the past 3 years, we've had near zero voluntary churn. How? Because we made sure that as the business wins, we help them win. So there's a few things you can do for technicians and entry-level team members to be able to make sure you do retain them. And at Command Center, like, we've added a ton of like the compensation side. So I would call this compensation progression. This would be things like pay for performance, profit sharing, benefits, paid time off, dental and health. Even if you're like, I can't afford healthcare. Okay, can you give them an $80 per month incentive that allows them to get a gym membership, for example? That might be cheaper and less prohibitive when it comes to just setting it up than healthcare. Or dental might cost $15, $20 a month. These are things that you could do to help create stickiness around staff. Yeah. Staying at your place of work. We always talk about having a sticky product for customers and retention of customers, but what about retention of your team? First off is the compensation progression. The next thing I would say is career progression. So at Augusta, we have 7 stages of success for technicians, 7 stages of success for general managers, 7 stages of success for owners. All in all, the 21 stages of success. The reason we did that is 'cause we'd always said our goal was to get people to the next stage of their career, but we never had stages, and it was kind of meaningless to say that. So by having an actual roadmap that people can progress in their career, it allows them to feel like there's reason to grow, there's reason to gain more skills, and there's reason to stick around, 'cause there is more money to unlock, there's more skills to unlock, there's more positions or titles to unlock, and so that career progression is super important. Another thing when it comes to technicians and entry-level team members is, A 30, 60, and 90-day. This is probably the most important when it comes to one-on-one interactions with the manager and whether or not they're gonna stay more than 3 months. I have seen consistently in home services, if you get a technician to stay 3 months, they will stay 3 years. A lot of your churn happens in the first 1 to 3 months because of a lack of onboarding. And so a lot of us think of onboarding as like, oh, I hired them and then the first couple days I ramped them up, train them how to do safety, how to run their payroll, how to use the software, how to do the work itself, and then we're off to the races. I would highly recommend having a 30, 60, and 90-day, i.e., 3-month ramp period that at the one-on-one meetings that you're having from manager to technician, there are very clear indicators as to whether or not they are winning. What are the things that are expected of them to be doing at each of those increments, 30, 60, and 90 days? I do this for all my roles now inside the media company, all the leadership team, like we are always trying to figure out what are they supposed to be doing the first 30, 60, and 90 days to make sure they're on track. Because if they're off by just a couple degrees in the first few weeks, you go 6 months down the road and they're way off track. They've likely left the company either through you firing them or them self-selecting and leaving the company voluntarily. I'm gonna have very clear indicators of success during a 30, 60, and 90 one-on-one meeting with that team member. I've gotta know what their goals are early on in my relationship with them to be able to make sure that as I think about their career progression, their compensation progression, their title, where they're going in their career, I've gotta make sure that aligns with their goals. 'Cause they might not care about some of these things, like making more money or getting another title. They might not care about that as much, but if I can figure out how to tie that in with the fact that they are trying to put their kid through college, for example, that's their goal, I will then make the connection for them to show them by doing these things, getting to the next stage of your career, by making more money, by hitting these KPIs, by making sure that this metric is good, the business goals, I will align it with their goals, which is, hey, if you wanna put them through school, let's make sure you can make some more money, and to do that, here's the things that need to happen inside the business. And so, goal alignment, very important, and in those first 30, 60, and 90 days, understanding what their goals are, and then giving them a clear roadmap in the business to be able to achieve their personal goals, that will make it very sticky. Alright, that's technicians, frontline team members. Let's talk about leadership. Now why is it important, in my opinion, when it comes to continuity with your leadership team? This is the people that, as you grow an organization to 3, 5, 10 million and beyond, that you might have 4, 5, 10 direct reports that then lead managers, and underneath those managers, you then have technicians or entry-level team members. Why is it so important to have continuity? In my opinion, continuity equals trust, and trust equals speed. And so if you wanna move fast, I need to have trust up and down the chain of command. I need my leaders to trust me, I need the people that they're managing, the managers, to trust them, I need the people at the front line to be able to trust their managers. There needs to be trust up and down the chain of command. And so if there is no trust, because I constantly am churning through leadership, then there's, and there's no continuity, it slows the business down dramatically. This is why a lot of people will top out around $3 million, because they're having churn at the leadership level, and it's causing distrust, and it's causing unrest in the rest of the organization. Now, if I talk to most $10 million plus founders that are not named Elon Musk, they have a core group that has been with them for years. And for entrepreneurs that I see building really big businesses that have been in the game and doing the same thing for 15, 20+ years, there are people that have been with them from day one. They've been with them for 5, 10, 15 years. I believe churn at the leadership level has cascading effects on the business. And again, some people will point to people like an Elon Musk and be like, well, he went to xAI, within a matter of couple years, the entire leadership team was replaced. The entire leadership team left. The entire leadership team got fired. It is very, very rare to see that caliber of an entrepreneur, let alone have the ability to be able to have that kind of churn inside the organization at the leadership level and survive. And so, I would say that it is an exception, it is not the rule. The vast majority of successful entrepreneurs I have personally seen have a core group of people that when they need to get things done, they can move very fast, because they have trust built up with people that have been with them for a long time, and that's the continuity we're seeking. So continuity allows that trust to be built, and that trust allows the organization to move very quickly. Most recent at Command Center, we've added another level of management, 'cause there's now 80+ agents, and so we added a management layer between the leadership layer, the management layer, a layer, and then there's an admin layer, and then there's all the team below, 'cause there's 80+ people just at Command Center. Mm-hmm. Now, all 3 businesses in the last 2 to 3 years, we formalized a leadership team that actually report to me. Since then, none of them have voluntarily exited, and I'm thankful for that. And all the progress that we will see over the next 12 to 24 months and how fast we will see the businesses grow is likely a result of the formation and the continuity of those 3 leadership teams across the 3 departments. We have the media department, we have the franchise department, and we have the software department. And first finding the right people to put them on the bus, but then keeping them there, in my opinion, is a huge win. It trickles down across the entire organization. And I have been very blessed to have phenomenal people stay with me for a very long time. And I've only recently realized that this is actually the unlock. This year we will grow probably twice as much, in terms of percentage, compared to last year. Why? We finally— established the leadership team in all 3 departments, and they've all been with us for multiple years now. And some of them as much as 10 years. And so, how do we do that? And by no means am I perfect. I'm like a very flawed human being. And so, how have we been able to maintain having a leadership team that's stuck around? 'Cause your leadership team sees your weakest points as a leader. They are the people that directly report to you. They have a huge amount of responsibility. They also carry huge weight for the organization. Mm-hmm. And a lot of what successes you get acclaimed for, they actually did the work for. So they have to like do the work, they don't really get recognized for the work getting done, and yet they have the biggest impact on the business from an operational perspective. And your head in the clouds vision and mission is very important, you have to do that, but if you don't have great leaders, you can't do that, and that's what keeps most small businesses under $3 million, is the inability for the founder to go focus on leadership and vision and where's the company going and higher-level things, but the reason they can't do that is because they don't have a good leadership team, and there's churn at their management level all the time. And so I started asking myself, okay, what's the unlock here? What have we done? We've done one thing, right? And that was like, keep good people around. So I kinda broke it down to 3 things. One, align incentives. And that is, if the business is winning, I want them to win. Also, it makes me less likely to micromanage if I know the business winning means they win. Now you might be watching this video and be saying like, hey, leadership team, general managers, managers, I'm not there yet. And I get you, but I know what it's like to have 8, 9, 10, 15 employees and not have aligned incentives with them. Just the technicians out in the field, out on the job sites like this every single day in home services, but feeling like the only way for me to be able to have them be efficient is for me to micromanage them and constantly be looking over their shoulder. And the reason I felt that way years ago was because I didn't have aligned incentives with my technicians. And that's what pay for performance, or P4P, is all about. The harder the employee works, the more money they make. If they show up on time, if they have all of their, their materials and all their tools ready to go, they don't have to go back to the job site or back to the shop 5 times throughout the day. They make more money. And now we're all pulling in the same direction, which is we want the job done on time and on budget because the crew makes more money if that happens. Go check out P4P software. I made a free course for you to learn exactly how to implement it in your business. So this is like compensation, making sure titles, everything is aligned with the incentives of the leadership team and myself. You will never, ever, ever hear me, and I can say this with confidence 'cause it does not ever enter out of my mouth, you will never hear me say a negative thing about my leadership team or my direct reports, ever, never. There might be in a one-on-one meeting I directly go over areas of improvement, that happens almost every single meeting, or areas of feedback or things I think could be improved in their department, et cetera. But you will never hear me, even if they're doing a poor job, say something negative about them. I personally feel like this is really important to have this level of trust between a leadership team and an executive layer. And that is sort of like a relationship or marriage. You don't go to your buddies and start talking bad about your wife. Probably a good indicator marriage isn't doing so hot. If the wife is going to all her little girlfriends and saying all the negative things and joking about her husband, probably not a good indicator that this is a healthy relationship. Mm-hmm. And so, in my opinion, if I want that same level of commitment that I would have in a marriage in terms of professionally with my executive team, I'm not saying anything negative about them. And they are gonna make mistakes just like I will. And if I want them to block for me to the public, to the rest of the team, to our customers, I've gotta block for them by being the line of defense that when people come complain to me, they're not gonna get a shoulder to cry on about my leadership team. I am gonna take that feedback, I'm gonna go to them one-on-one and interact and potentially have a very hard conversation,, but I am never, ever going to say publicly negative things about them. And so the second thing, though I'd on the fly, is no public criticism. Critiques and improvements, they happen, but they're happening behind closed doors. Out in front of the team, out in front of everyone else publicly, there has to be a united front. The same way in any family there is dirty laundry, that happens in the backyard. That stays in the backyard, and we're gonna have a united front in front of the team and everyone else we're trying to serve. The third thing that I'm looking looking for or trying to make sure is in the organization, this is my job, is to have a worthy mission. If you do not have a worthy mission, you will attract mercenaries that do work, you will not attract missionaries. By definition, a great mission attracts missionaries. I want people that believe in what we're doing, that they're willing to ascribe discretionary effort and go the extra mile because there's a worthy mission. It's worth sacrificing for. For the vast majority of people, making you more money as the owner is not a worthy mission. Now, if you making more money allows you to do something much better for the people around them, for the people they care about, for the organizations they care about, for the community they care about, then that becomes a worthy mission. Mm-hmm. So to make this more personal for myself, our goal is to take the company public in probably 6 to 10 years. And in doing that, I will make a lot of money. But making the money is not the mission. The making of the money is a result of making the mission a reality. And so everything is geared towards hitting the mission and making sure it's a worthy mission that everyone can actually get behind. And making sure that this mission is large enough for them to fit their own goals inside of it. Worthy mission, it is the most important thing, and if you're not spending time reiterating the mission, especially as the team size gets 20, 30, 40, 50 people and beyond, you basically just become a broken record of, Here's the problem, here's the solution, and here's how this ties into the mission. That's basically how I think about every single all-hands meeting, every single leadership meeting is like, here's a problem, in the weeds. Here's a solution, based on everything we talked about, and here's why it matters according to this. And so, we make it very clear, like on the media side, the mission is to make home service business owners rich. So whether it be making free courses, or whether it be making free lead magnets, like homeserviceaudit.com, or instantmowingcode.com, those cost real money. But the whole objective is to make home service business owners rich, and if we serve that mission, everything is funneled towards that. For Augusta, the mission is to change the level of professionalism in the landscape industry. Everything is seen through that prism. And if we make more money at Augusta, and we get more owners to join because they're attracted by more money, and they join the opportunity to join Augusta, and we get 1,000 locations, I happen to believe we'll be able to reach the mission. Mm-hmm. The money will take care of itself. Everyone asks first, how do I monetize this, instead of what's the mission, and if it's big enough, you'll make money. It'll take care of itself. If you take care of the people around you. And the fourth thing is, to attract and then retain great leadership is— Don't be a jerk. Okay. This kinda goes back to what I filtered in with the no public criticism. Like, don't be a jerk. You will lose great people if you just let your stinking mouth say whatever comes, comes into your mind. And so again, people will look to people like Elon and who says whatever he wants. And there's a huge downside cost, and that is he loses his executives, he loses key team members, and he is a phenomenal entrepreneur and he'll be able to override that. Obviously has. But for the vast majority of us that do not have that level of skill or talent, Being a jerk will cause great people with great ideas that have the solutions that will unlock the growth of your business, they will leave. And they will go work for someone that they make less money for, they have less incentives, they have less upward mobility, but they don't wanna work for a jerk. Now, I have jerk tendencies. There are times I get very frustrated with other people and with myself. That is no excuse to show anyone on the team just how frustrated I am. The leadership team probably sees that the most, but definitely no one outside of that is going to see me being mad, me being frustrated, me getting angry because of someone dropping the ball. That's not happening. Because that's what a jerk does. There are times that you as a leader, especially as you start to scale, you have management levels, that you are not hiring people inside the organization. Other people are hiring people that are your employees. If you start to be a jerk, Everything gets compounded. Little words that you might say in a meeting, negative slants of looking at each other, uh, someone else, it all gets magnified because people don't wanna work for a jerk. And people work for a less worthy mission where people do criticize them and they don't have aligned incentives, but they'll do it 'cause the person is nice. And you just have to ask yourself, like, would you work harder for someone that you liked working for or someone that you thought was a jerk? You would probably work harder for the person that you liked. And you would probably actively look for ways to tear down the person that you thought was a jerk. Whether it be saying things behind their back, whether it be tearing down the culture, whether it be saying things to customers about the business. If you're a jerk, that happens. And so, if you're like me and you get frustrated by everything, you get frustrated by your lack and your inefficiencies, and you get frustrated when other people make mistakes, 'cause you're a perfectionist, like me, you're going to have to put a can on it. It has been the number one thing that I have had to figure out and I am still trying to work on, is that when I get frustrated, I can't show it all the time. When I think something, I can't say it all the time. And that's not you putting on a face. That's not you putting on a front. That's not putting on some sort of facade that you as a CEO have. That is protecting your team and making sure that your emotions don't govern your leadership. 'Cause an emotional leader will almost always, in times of difficulty, become a jerk. If we focus more on employee retention inside of home services, if we just focus on keeping our team at the technician level and the leadership level, customer retention would follow.