EntreLeadership - “He’s a Jerk and There’s a Payroll Problem”

Episode Date: June 3, 2024

Today we’ll hear about:       A leader in a company who has to deliver bad news to the owner, who is also his girlfriend’s dad A business owner wondering how to share profit with his team A business owner who is discouraged by making over $1,000,000 but not having any profit How to structure benefits and pay to attract and retain team members Next Steps 🗳️ Submit your question for a chance to be on the show with Dave Ramsey: https://ter.li/askus 👣 Find out what Stage of Business you’re in: https://ter.li/axd39b ✉️ Sign up to receive tactical tools, advice and resources in your inbox every week: https://ter.li/y8qdo7   🏢 Attend EntreLeadership Summit: https://ter.li/fcazl2   🎤 Attend EntreLeadership Master Series: https://ter.li/wcjhpu ☎️ Learn more about EntreLeadership Coaching: https://ter.li/ycznhl 💵 Learn more about Ramsey SmartDollar: https://ter.li/4imot0   🗳️ Help us make the show better! Please fill out the quick survey form. https://ramsey.qualtrics.com/jfe/form/SV_01hjJ6UN8mnQPNI   Offers from Today's Sponsors NetSuite: https://ter.li/x1t20q BELAY: https://ter.li/yohiu6 Payority: https://ter.li/fh2oau Trainual: https://ter.li/a8zexl Found: https://ter.li/ggwmrv Listen to more from Ramsey Network 🎙️ The Ramsey Show   💸 The Ramsey Show Highlights 🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💰 George Kamel 💼 The Ken Coleman Show Ramsey Solutions Privacy Policy https://www.ramseysolutions.com/compa… Learn more about your ad choices. Visit megaphone.fm/adchoices

From the headquarters of Ramsey Solutions, this is the Entree Leadership Podcast, where I take calls from leaders like you about what it takes to win at any stage of business and leadership. I'm Dave Ramsey, your host with over 30 years of experience in the trenches, in the ditches, and sometimes up on the highway. Yeah, we've been in all of it. We know what it looks like. We know what it feels like. We're one of you.

And if you're having a great day, been there. If your day has sucked, been there. Know how it feels. If you're looking for a think tank on theory, you're in the wrong place. We're here to help real business people run real businesses with real answers from somebody who's actually freaking done it. So give us a call. The phone number's 84449-1070 or go to the website at ontratery leadership.com slash ask.

This podcast has become one of my favorite things I do because we're helping small business. And small business is what drives America. Most people in America, more people work for small businesses than work for corporate America. Ooh, gotcha. More of our economy is created by small businesses than by corporate America. So you can put all the big dogs and the big names together, and they don't add up to Joe's heating and plumbing in your neighborhood.

Yeah, that's what it amounts to. So we're here to help. Again, 844-9-4-1070. Mike is in Utah. Hey, Mike, welcome to the Entry Leadership Podcast. Thank you, Dave. So I am a PM supervisor for an AV company based in Utah, and I got a sticky situation going on. So I've been working for the company for about six months now, and I moved up to the chain really quick to, from just the crew member to a PM supervisor just because of, he says I was really outstanding and going.

Preventive maintenance for those out there listening, right? Yep. So I finally got to the position where I, you know, could help address issues with employees and everything. So over the last week or two, I've started like listening to the employees and what their issues are. And there's two main issues is a payroll issue and a, the co-owner is not very nice to his employees,

as I should say, and where it gets sticky is because I am dating the governor's daughter, so I don't want to, you know, push too far and, you know, end up in a bad situation. What would you recommend me doing in that situation? So the guy that's a jerk to the employees are dating his daughter? Yes. So that's why it complicates a lot of things. Yeah, this is not going to go well, is it? No.

And, like, he is not the nicest guy to try it. to you, but he is always like... How would that be for a father-in-law? It's not very well. Yeah, look. But it's like, he asked, like, why can we keep employees, but, like, nobody will address it to him, so I want to finally bring it up to him. I just don't know.

So he asked you these questions, and so you went on listening to her with the employees at his request. Correct. And so the questions he wanted answers to, the answers are, he's a jerk. and there's a payroll problem. Correct. And I just don't know how to, you know, address the situation without causing conflict in the workplace. Okay.

Does the girl you're dating his daughter work there? She does not. Okay. All right. Well, number one, you don't discuss any of this with her. Yes. Under any circumstances. That would be unethical and highly inappropriate.

until you've talked to him about what he told you to do, you don't talk to his family about it just because you're dating her. Yes. So how long have you all been dating? We've been together for about three years, and I've been working for him for about six months now. Oh, so you're dating before you came to work there? Correct.

Okay. So he offered me the job when... And so did you see a different side of him? Before you were working there? Oh, yeah, a complete different side of him. He used to be, like, sweet, carrying an ice to me, but as soon as I started working with him, outside of work got pretty bumpy, too.

Hmm. And yet he handed all this over to you. Yeah, and that's, there comes the second part, is the owner is upset with him because she says, I'm stepping on toes because I am trying to, you know, help build, the company and it's making employees upset. So I'm like, do I back down? I'm sorry.

You mean the other owner? Yeah, so we got an owner and the co-owner. So they're both family ties to the company. So they are family, basically. And the other person doesn't want you doing what he asked you to do. Correct. And there is no communication in the workplace. And that's why it's so hard to discuss certain situations is because

one side gets heard, but the right hand is doing. 21. Oh, good Lord. Okay. And what do you make? I make 22 an hour, and that's where it gets complicated because there's a guy that's been here for five years, and he's making 20, or 1975 an hour. And he is a AM team lead or AM supervisor.

Is that the payroll problem you're talking about, that the payroll is not equal, and everybody knows what the other one makes and they're not happy about it? Well, not just that, but other companies, like the couple guys were like, well, I could go work for another AV coming in. They're starting at like 26 an hour and they're starting to wage here is 20. So they want to. Exactly, because he's about to because he's not getting what he wants to be paid. So I'm like, well, you guys are losing employees, A, because of your payroll and B, because of your behavior towards your employee. and I'm like, I don't know if I should address that.

It's not your payroll. It's the compensation plan is what you're talking about. But, yeah. Yeah. Okay. So I'm like, do I just wing it and hope for the best? No, because it's not going to get better. And I'm like, okay, I'm trying to think that is there, is there a scenario where you sit down and talk to these two owners and give them this information and they change these.

two things as a result of you giving them both the information and then peace sits in the valley and everything becomes okay. I'm kind of thinking that's not going to happen under any circumstances. No, because I try to address the payroll issue with the owner while they were out of town. No, I'm talking about it. You've got to quit doing that because y'all are like mom and dad against the kid and the kids pulling mom and dad against each other and all that. The three of you have to get in the room and solve both of these issues. And it's the only shot you've got. And so go, okay, number one, do you want me to work on this?

Both of you, look at each other and decide that right now. If you do, I have some conclusions I can tell you. If you don't, I'll walk out of here and shut up and never say another word and y'all will deal with it. And if they raise their hand and say, okay, what did you find? You say, okay, I found these two things. One is the way we're treating people, not treating them with dignity, and the way we're addressing them is not working.

Okay? We don't have to soft pedal, but we do have to be at least, we can be direct, we can confront issues, but we don't have to be jerks about it, and the people are tired of being talked down to. They're tired of that. Number two, our pay scale is not up to market

on several of the folks, and we're going to lose them if we don't adjust their comp to at least market. Those are the two things I have discovered. Now, I'm only 21 years old, and I don't know nothing. But that's what the people have been telling me, and I'm passing that on to you for what it's worth.

Now, if they took that and said, oh, we're going to start, you know, being normal human beings and be good leaders. And, oh, we've got to go through and do a comp study and change everything. The chances of that happening, Mike, is about zero. Yeah. So I think you're going to be working somewhere else.

Yeah, because, like, even the owner is planning to retire, or here in the next like year and a half. And everybody's like, the company's going to sink once they go over, takes it over. So. Yeah, which happens to be your potential father-in-law. Yeah. Gee, what a mess. The whole reason I started working there is because he says,

well, in like five or six years, you guys will be taking it over. But as soon as I started evaluating. I don't want to take this over. Why do I want to rearrange the chairs on the deck of the Titanic? Yep, exactly. No, thanks. Let the deck chairs sit where they are. So, you know, and I guess you can pose it to that and say, okay, look, you're thinking about retiring,

you're talking about me taking this over someday, although you're only 21. So that's a decade away, Mike. You've got to put up with this crap for a decade. And if these characters aren't going to behave, life is too short. You're better off to work somewhere else. And so I think your only shot is to sit down with both of them and have a very candid conversation. And I'm, even though you're very articulate and it sounds like you've thought that you've thought is through with a wisdom beyond your years,

I think your age is going to work against you in this conversation. Because I think these two old dinosaurs are going to be Godzilla versus King Kong in there, and they're going to just squash you in the conversation. And that's what my other issue was, too,

is their own, but like, what do you know about writing a business? Yeah, but you ask me. Exactly. I didn't come in here unsolicited. You asked me to go do this. Now, do you want to know the results of what I did? If not, I'll out here and not say another word. And if they say, okay, we don't want to know, okay, walk out of there and go look for a job, dude,

get out of there. Because this is not going to get better. These people are not going to deal with their issues or at least what you perceive them to be. And so you're going to be at a minimum, dissatisfied and uncomfortable. And then you've got the hard job of never saying anything negative about your girlfriend's dad to her. And you cannot say a word negative. I mean, relationally, you can't do that. That's just stupid.

So, you know, you're going to be biting your tongue and blood's going to be run around inside your mouth while you're, you know, trying to have conversations. Well, what happened? I just couldn't work there. I just thought I needed to go somewhere else. And you just got to keep real high road, real high road, real high road, real high road. And but if you sit down with, the only shot you got to sit down in person

with both of them and ask a series of questions that lead them to ask you what your findings are, and then you ask and say, okay, what can be done about this or what are you going to do about it or, you know, how can I help or how can I serve you or something like that? And they say, well, screw it, we're not doing anything about it. Then you go, okay, the place is going down. And I'm not going to be here and rearranging the deck chairs on the Titanic. That's the deal. So, man, what a mess. But you took the job while dating the girl. This is the Entree Leadership Podcast. Well, if you're struggling to know what the next right step is for your team, then you're in good company.

Most business owners deal with seasons of uncertainty. But that doesn't mean you have to keep blindly stumbling from one obstacle to the next. I know how to get you from where you are right now to where you want to be in 10 years. It's called the Entry Leadership System. And it's the roadmap that takes the guesswork out of your business growth. So you can build the life and the business that you really want. Where you're running your business, it's not running you. If you'd like to learn more about how to solve the right business problems

at the right time and level up and level up and level up in the right way, go to entreleadership.com slash system. Entreeleadership.com slash system. Shane is in Myrtle Beach. Hi, Shane. to the Entree Leadership Podcast. What's up? Thanks for having me on Dave. I am the co-owner of a residential housing company that is an on-your-lot builder. We have about 25 employees and our top-line revenue for 2023 was

$26 million. So, and we are in the beginning stages of, of being in the legacy stage. And we don't, we feel like we're probably five or six years away from, you know, trying to pull away from the business. And we don't have any obvious choices for, to take over the entire company. We realize that someone will have to have some management help. And we've got two or three key employees that are, really shown a lot of leadership and growth.

And we're trying to figure out the best way to include them in some profit sharing to help continue to motivate them in their growth. Okay. You said you had 2016 members. 25. 25. And two of them are what you're considering being eligible for this. Yeah, we have kind of three locations throughout eastern South Carolina.

Coastal, South Carolina, and we have one location where kind of the sales manager and our superintendent have really, really shown a lot of growth in our, at least showing potential that we could not be involved in the day-to-day operations of at least that one location. So you think about dividing the profits up by location and sharing them or sharing them across the whole thing? Well, we have the profits divided up by location anyway, and then so we know what our profit is each. We actually have it divided up in two ways at each location because we actually have our company set up as a construction company and a sales team. Our construction company gives the cost of each project to the sales team, and then the sales team gets paid and shows a profit on whatever they see. sell it over that construction crossed and then the construction team gets paid on the profit that they create by building it for less than what they told the sales team.

So the price they're giving them includes a margin and then the sales team's marking it up again and making theirs and you're running that as two separate profit centers? Yes, sir. Okay. All right. So how are you thinking about paying the team member, the senior team member that's leading a location that has those two different things in it? Well, I know.

So we wanted to be sunk because I've heard you talk about profit sharing in the past and the problems that you've had and you kind of went back and sort of made it a more of a thing that could be changed moving in time. But we also wanted to be some concrete numbers that we can show them. So our thinking was to pay these two members. off of our construction profit, but basing them getting this additional bonus off of this construction profit, it would also be based on them hitting some sales goals. Does that make sense?

Yeah, yeah, but it's messy. It's messy because they also are managing the sales team if they're managing the whole area, right? Right, yeah, they're managing their sales team and basically the sales office. Yeah. So we want to take that. And they're managing the building team. They're melding the whole location, right?

Both streams of income. Right. Well, pay them off of both streams of income then. Okay. Like, that's how you get paid. Right. Yes, it is. You can make them a partner without giving them stock.

Uh-huh. If they were a partner and as a general partner of that location or an operating partner at that location, they got X percentage of the bottom line of those two income streams, maybe different percentages for the two different income streams, I don't care. It might be 3% on one, 5% on the other. It might be 22%. I don't know, whatever it is to get them back to their income level. We kind of got to back into it to get them to at least where they are now, right? Right. And so what does the guy at one of the locations make now, as an example? Able to, they're both right around that 150 a year, Mark. Okay. And what percentage, okay,

and if I took the sales profit at that location and the builder profit at that location, What would those two things add up to? As far as percentage. No, total dollars. Total, okay. I believe last year at this particular one, it was like one and about 1.5. Okay. If they could see the entire P&L and had some say-so over the entire P&L,

meaning they can create the revenue and they can help manage the expenses and keep them down, which they're probably already doing. they're running that location, then they are controlling their own income. You don't think my only concern that we had with that was, you know, sometimes people can get, well, we're doing all of this and we're getting this, and y'all are just kind of watching us do it. Well, there's that part where I own it. Do what?

There's that part where I'm the owner. You know. You are right there. I mean, come on. I mean, you know, if you want to go own something, go on something. But this is, right now you're making 150. I'm offering you two and a quarter. Okay.

And if the guy doesn't have the maturity to run the numbers and see his part in the numbers, then, you know, maybe that's not the answer. Sounds like we were trying to make it probably too difficult in order to not show them the full books. Well, if you want them to run something for profit, they got to see the books. Right. Okay. So I've got 14 people on our operating board here. They all are paid off the bottom line of the whole company.

Everything at Ramsey goes into a pot, you know, eventually, it's split up all over the place, but eventually it ends up, you know, landing in my pocket, right? And so once it comes down through all the different gyrations and everything, so they get paid off the same line I get paid off of. And it's not a huge percentage, but it's a huge amount of money. Okay. And they see every detail of the books. Their job is to help me run this large and complicated business

and keep all the dead gum toggles toggling, right? Right, right. And so, yeah, because if I'm going to call someone a, you know, if they're at the level where I, if I, that I might want to have actually shared ownership with them, then I need to at least be able to share the books with them. Yeah, okay. And if they're not, then they're not. That's okay too, because not everybody can make it, you know, can be on my operating board

because some of them can't handle looking at the numbers and going, well, that's only what I make. Yeah, well, you weren't here when I started it either. And you weren't here in those 16-hour days before I lost my hair and all that stuff. You know, I mean, there's all that thing. So it's a good question. It's very interesting. And it might not be that that's the right model for y'all. You may want to just say, you know, we're going to pay you off of this and you can just start showing certain numbers.

I don't care what it is that create the same situation, but I still want them motivated to run the business. Keep expenses down and revenues up. That's running the business from an accounting standpoint. I want to make a profit, and that's keeping expenses down, revenues up in your area. If you're not doing that, you don't get to be here, if that's your job.

I mean, your job is keep expenses down, revenues up, and everything that entails. that means all kinds of different things, but that's what it comes down to. And that's what I have to do. If I don't do my job, I get to go home because we're broke, you know? So that's how the whole thing unfolds. So, yeah, I think, yeah, what I would encourage you to do is, number one, nothing's in stone forever. Number two, I have, you know, have them sign non-disclosures and non-competes.

If they're going to be at that level, and if they sign those two things, then we can talk about all kinds of stuff. This is the Entree Leadership Podcast. Thank you for joining us, America. We're glad you're here. This is the Entree Leadership podcast. If you're enjoying this and listening regularly, thank you. Help us by clicking the follow button, the subscribe button, leave a five-star review, share the show, click the link and send it to somebody. Wherever it is, you're consuming it, let people know that, you know, we're there on Spotify, we're there on Apple, we're there on YouTube, and we're here to help you guys.

This show might be worth what you pay for it. I don't know. But you can, you know, I'm enjoying doing it. I know that, and I hope we're helpful. So if we're helpful, help us and spread the word on this thing and subscribe and follow. It's a big deal. Jerry is in Vancouver. Hi, Jerry.

Welcome to the Entree Leadership podcast. Hey, Dave. Can you hear me? All good? Absolutely. What's up, man? Thanks for having me. First off, I've been binge watching your content for the last little bit here. And not going to lie, my heart's a bit pumped up right now, and I'm glad to be on the show. Oh, we're glad to have you, sir. How can we help?

So, yeah, my name is Jerry. I'm actually from Vancouver up in Canada and BC Canada. And I run a automotive-type business. It's a bit of a niche market. for automotive, we're a small shop that works on four by fours in general, like your toilet comas, four-enders and whatnot. And, yeah, we were a fourth year in. Revenue last year just crested 1.15 mil, Canadian, so it's, you know, a little bit less down there.

But, yeah, I mean, I feel like we're in a great position, but as of lately, we've been, to put it short, we've been having some growing pains. Staff morale has kind of been down, and it's kind of taking a toll on myself personally. I'm the only owner here, so I work with a general manager, five other employees, and actually since the time I reached out

and we were going to do the show here, I had one of my staff handing this two weeks, so I kind of, we've been working to get someone else back in the shop and help them out and go from there. But, yeah, it's just... So what is a growing pain? What happened? Well, I mean, we're at a point where I feel like the revenue we're able to pretty much double from the previous fiscal year, which was amazing. But the expenses I've been creeping up, and I've noticed that it's every time there's an issue like one staff member kind of brings up because we're such a small team.

Every, you know, 10 steps forward, we take 11 back, I feel like. Like what? What are you talking about? So I'll give you an example The technician just recently left us Since it's fresh in my mind He you know They're all pretty close The three of them in the back

And then one of the service advisors in the front And I believe just You know The reason that the employee that's leaving Has given me It kind of everyone else You know Takes that kind of attitude

And it just brings everybody down Takes what kind of attitude? What are you talking about? So he's kind of giving the, he's given me the reasons of he doesn't like how the business is run. I guess part of it's due to me, and then the other part is every time they feel like they're close to hitting profits, which we are very close. We just seem to have something else. So you made a million dollars revenue and you didn't make a profit? Not on the books. Well, books count.

I mean, that's where the profits measured. Yeah. So did you make a profit or not? No, we didn't. We took a loss. Why? I've narrowed it down to mainly the amount of labor hours build out versus the time spent on the jobs. So you suck at estimating?

In a way, and because we're in a, we work on a lot of custom work. But you give a fixed price and then you double the hours of what it should have been. So you suck at estimating. Yeah. Yeah. I'd say, I would assume that. Or you need to change the pricing model where you get charged, you know, we think it's going to be 10 hours. And, hey, you know, you get five hours into it and you go back to the customer and go, it's not going to be 10 hours, it's going to be 20.

Yeah. Yeah. Yeah. Yeah. So, like, it's, it comes down to, I would say, every quarter, we're doing better and better. But, yeah, every time we kind of make a breakthrough, something happens either with, again, this, uh, staff feeling discouraged and whatnot. Well, them feeling discouraged doesn't keep you from making a profit.

No, it shouldn't. No. No, they'll be discouraged when you don't make a profit because they don't think they're going to get to keep their job. I think it affects me more personally than perhaps, and maybe at times they see that. Okay, so I hear two problems that you're facing. One is you're not profitable, and two is the staff morale is down, and the two are tied together. The profit is not down because the morale is down. the morale is down because the profits down.

Agreed? Yes. Yeah. Okay. And so really what I, if I'm you, I'm going to get involved and start figuring out my pricing model and make this stinking thing profitable. You make way too much money and do way too much work to not make a profit. Yeah. I mean, if you're bringing in 100,000 bucks and you hadn't figured it out yet, that's different,

but you're bringing in a million dollars. Yeah, it should be something left over. that of the day. Yeah, hello. Yeah, that's a lot of work. I mean, but it's a dog chasing his tail. You still ain't caught anything, you know? Yeah. So right now it's a dead-gum expensive four-wheel hobby. Yeah. So, and these guys, they can feel that and they don't, you know, they want to be a part of something that's winning and, and that's profitable. So how do you do your pricing? So you're doing custom work on four-by-four, so you're creating something to do, right? rock climbing or monster trucking or whatever, right?

Yeah, so there's definitely, I would say, different categories. We also do an online store, which is about a third of the revenue. Are you making a profit on that? I would say so. I don't say so. You need to know, man. You're running it. It's about 15 to 20 points on average for gross profit for the online store.

All right. So it's not too much. How much overhead is associated with it? That eats that 15% up? Well, I mean, we carry about 400 inventory at any given time right now. That's inventory. That's not overhead. Yep.

So usually, yeah, we buy it in like 30 points if we can. That's kind of the ideal what I aim for. Okay. So you're probably making some money on that. Yes. But not a time. It's definitely subsidizing the shop. The greatest...

Okay, so why is the shop not making money? You can tell me, you know. Last six months, we only charged out of the market. about five and a half hours on average per day between two technicians. Well, one redstone... It's not getting work? Apprentice. I don't think it's the lack of work.

Sometimes, I mean, most of the time I feel like the shop is slammed. But when I look at the numbers of the end of day, we're just... The hours aren't there. Okay, they're in there working eight hours, but they're not billing them? I want to say sometimes it's... I see jobs getting dragged on. And I don't want to make assumptions. I still...

I do. I'm making a million dollars in losing money, so I'm about to make some assumptions. Okay. I'm about to make somebody's assumption go in the street. You and your assumption get to leave

because I'm about done. You know, this is... I got a real short temperament for things that don't work. We've got to fix them. And so, if I'm you, that's what I want you to take on. And if you become a man of action,

a man on a mission, your morale issue that you personally are facing will go away because convert your fear and your disgust to a healthy, righteous anger, not at people, but at this broken, dead gum mess. And we've got to fix this mess. And if that means two of the guys leave, that's fine. They need to leave. Because if you're working for me and you're dragging a job out

and I build the job and the reason we're not profitable is you're taking twice as long because you're sitting on your thumb, then you don't get to work here anymore. That's a simple equation. Yeah, that's business, right? Yeah, we're managing a project. Okay? So how are these guys paid?

Are they paid by the hour? The full-time? I've one part-timer. So everyone else is on salary, the apprentice is on hourly, eight hours a day. So a lot of techs and, you know, you got a service rider in a standard car,

not a custom deal, but you've got a service rider and it's already pre-programmed in the computer. This is a 3.25-hour job, and that's what they get paid for. And if they take four hours, they only get paid for 3.25. You know how that works in a regular shop, right? Yeah, so we are not flat-range here. Yeah, the techs are on a fixed salary.

Yeah, I know. And we're going to roll out. I'm just wondering why they... I mean, it's probably harder to do it than it is in a standard service rider because you guys, it's not as easy, to say, okay, this is a three-hour job. It might be a four-hour job, but you might want to say, you know, you and me, tech and me,

are going to sit with a customer, we're going to do these five things, and we're going to charge X, and here's what you're going to get paid for this job. Right. And do it by the job. And let them be involved in setting the estimate, setting the price with the customer,

and then the tech is going to make X, and you're going to make Y. And the customer knows ahead of time what it is. And then by God, it's not going to take eight hours to do a five-hour job. It's going to take four hours to do a five-hour job because the dude wants to move on to the next job. Because he's getting paid by piecework. Yeah. But he helps set his own poison on that.

I mean, I'm not going to make him choke that down. Now, in a service rider situation, you know, you're working a General Motors or a Ford shop. They know exactly how long it's going to take because they've done 8 million of those things. Okay. but in this, we're making this up. So you and the guy, the guy's got to have input if you're going to put him on this. But I'm going to change the comp plan to piecework for one thing and get them and let them have a say in the pricing then. And listen, and if you're a tech and you want to bitch about how I'm running the business, you do need to leave.

Really? I'm glad that guy left. I know there's work not getting done because he's not there, but you also don't have the acid and the toxicity of his gossipy mouth in the shop. Yeah, no, I definitely hit that now, actually. Yeah, if every time you turn your back, they're running you down, well, no wonder nobody likes anybody in there. Yeah.

And that's a standard thing. We call that gossip here. We have a, one of our core values that Ramsey is, is that you hand your negatives up. You come in my office and sit down and one of the leaders' offices sit down. You don't hand your negatives down. If you hand your negatives down,

that's called gossip. And I will warn you one time, and after that, you get to work somewhere else. It is a no gossip policy. That's what we do. And you know what? People don't talk about other people here, unless they're in a leader's office

and saying there's a problem with so-and-so. But we don't run each other down, and everybody's back, and then everybody doesn't have to be looking over their shoulder, and there's all this negative. Because sometimes an automotive shop is worse than a beauty parlor. A bunch of old men sitting around gossiping makes these women look like saints. And so, you know, you got to bust up into that and go, you turkeys, we're not doing this.

We're a team and we're creating these cool cars together and we're doing this cool work together and we're going to be on the same team together or you're not going to be here because this is the kind of thing we're going to run. So I'm going to get real proactive on dealing with that and setting that standard in the office and on the floor. And I don't know exactly, Jerry, if my idea will work on piecework here, but something's got to happen where you have your finger more on the pulse and have more of an expectation, a demand reasonably without being a jerk about it, to get your work done on time because

you're screwing up our profitability on these jobs when it takes eight hours to do a five-hour job or we're getting paid for five and it's taking you eight. That ain't cool. You know, if you're here working eight hours and I only got five and a half hours billing, there's a problem. There's no way you can make a profit. That's a 30%, 40% problem.

So, yeah, you can't sell enough stuff out of your store to offset that crap. And that's what's happening to you. So the way, the operational way, you're billing and paying and estimating and pricing, all tied together, is where you're at, that's the core issue.

And if you'll get down in there and figure that out, you're going to solve this problem and then just keep firing people until you get the right people in there that aren't going to run their dadgum mouth. And I don't mean that in a mean way. I mean, firing is going to continue until morale improves.

That's not what we're talking about here. But we are saying, you know, you can't work here if you're not going to be a positive influence on everyone. If you've got a frustration, you've got a problem, you bring it in my office. You don't sit in the coffee room,

stand around the coffee mug, leaning up against the office space, up against the cubicle, telling everybody what's wrong with me. We're not doing that, and me pay you. That ain't how this deal works. So, and I don't know why,

where we got to in our culture, we think we have to put up with that crap. Because you don't. You own the thing. This is the Entree Leadership podcast. Thanks for being with us, America. We're glad you're here. Sarah is in St. Paul, Minnesota.

Hi, Sarah. Welcome to the Entry Leadership Podcast. Yes, thanks for taking my call today. Sure. What's up? My husband and I own a small metal recycling company. We also provide some trucking services and sell heavy truck parts. We have 12 employees, and last year our revenue was $3.4 million.

Wow. My question is, what should we be offering our current and future employees in terms of pay and benefits? I'm struggling with whether to offer health or dental insurance. And if I need to raise my current employee's wages, if I start hiring the same job description with higher wages to bring people in, I don't think we should have to cover dependents until age 26 and our employees' poor life style choices. And I'm just looking for advice on that in terms of this I need to be thinking differently.

You're not required under Obamacare, the Affordable Care Act, to furnish health insurance because you don't have 50 employees. Correct. So you can just, now it's just down to an economic choice like it used to be before we socialized health care. So, but yeah, you're not required to do this. So you just got to decide what, you know, what does it cost? So, you know, have a health care company, I mean a health insurance company give you a bid of what it costs to furnish health insurance.

And what we have done for years and still do a little bit. bit. We furnish about 80, 90%, somewhere in there. So the employee, you know, we might be paying 500 bucks and they might be paying 50 bucks for them to have health insurance in our case. Now, we're required to furnish it, obviously, with 1100 team members. So, and it's a whole other thing when you get into that. But in your case, you could just go to like a Blue Cross Blue Shield type thing and say, all right, what's it cost to cover these people? and they can give you a number, and then you can have the, gather the team up.

I mean, there's only 12 of them. Let's put them in a room and go, guys, okay, here's what it costs. We're willing to pay half of that if you're willing to pay your half. How many people want it? And you can figure out real quick if anybody wants to pay for it or not. Right. And that's a perfectly legitimate moral thing to do in a small business. You are not morally required to furnish someone's,

health insurance. Correct. Yeah, I know that. I guess I'm just looking at it in terms of attracting future employees. Yeah, you're not going to, I mean, you're not going to compete with corporate America anyway because they've got, they're going to pay a whole bunch of crap that you don't want to pay. Oh, sure, sure. You know, I'm really looking at the CDL truck drivers, the second.

Am I driver? Yeah. Just because it's, you know, just awful trying to find those types of employees. But you think health insurance causes them to come drive for you? I think maybe it would entice them a little bit, but then I don't want them chasing a benefit package. Exactly. And can you make the numbers work? I mean, you may, you're a small enough operation.

That may, I mean, if it's $1,200 bucks a month per driver, for health insurance, and it very well could be, right? And that's just a new cost for you, and you've got 10 drivers. That's $12,000 a month. That's $150,000 a year. Right. You don't need drivers that bad. I don't think, do you?

Yeah, and as it is now, they don't use, some of them don't even use the benefits that we offer. That'll always be the case. So that's what I mean by let them have some skin in the game. How many of you want health? And so, you know, you could say to a potential driver, once you get all this stuff evened out, hey, we pay a little bit more than market,

but we pay half your health insurance. Our normal, you know, our payroll, your salary for driving or however you're paid is better than market, but I only pay half your health insurance and you pay the other half if you want it. If your wife works at corporate America and you can buy your insurance through her by being the spouse,

might be cheaper for you. And then you don't have to pay anything. Yeah. And so, yeah, I mean, we had, in the early days, we were 50-50 here, and we've moved way up past that now. But it's just pennies now hardly that the employee pays. But I don't try to compete with corporate America.

And here's the thing. If it takes, what's it take to hire a driver right now off the street? What's the rate? anywhere from 25 to 27. Okay. It's called $26 an hour. Okay. Is that what you're saying?

Yes. Okay. And you got people working there at 22. You're better off give them a raise and not let them leave than try to replace them. So, because they know what the street rate is. And they'll go take it somewhere if the difference, you know, you're nice, but you're not nice enough for it to be huge difference. They'll leave. So, you know, we try to figure out what market is and pay our current team market

before we try to bring in outside people at market because the current team is, it's harder to replace current team than it. I mean, I would a lot rather keep people I've got than hire new ones. Right. They know us. They know the systems. They know, you know, they're much more productive. You bring somebody in new, it's a little while for you even,

where they even find their way of the bathroom. So, you know, you got to, there's a while before you get productivity out of new people. So I want to get my current people up to current, and then I can offer, in good conscience, the same rate to attract people. And if I want to say pay 27 and the market's 25 to 27, now we pay 27, we pay top dollar, and that includes the people work for us, but we don't furnish the entire health insurance, we only furnish half. And you look at what that's going to cost you if you want it.

If you can buy it through your wife's work or your husband's work, it's cheaper, then go that way. And that's how we've done the analysis on it. So I do not tell small businesses, and I have not, tried to build a benefits package that competes with corporate America. Because as you said, very wisely, Sarah, I don't want to attract people with benefits. The benefit of working here is you're going to be working with people that care. It's a small business atmosphere. It's a family atmosphere. You're going to love it.

That's the benefit of working here. It's not your health insurance, although the health insurance is good here, too. But, hey, guys, remember better a wary warrior than a quivering critic. This world needs more high-quality leaders. So take courage and lead. I'm Dave Ramsey, your host. Thanks for listening to the Entree Leadership Podcast.