Get Creative About Employee Incentives—Especially During Shoulder Seasons

Home service companies are gearing up for the shoulder season—that time of the year between bleak midwinter and the dog days of summer, when residential heating and cooling needs tend to be sparser.

Contractors with any level of experience know that the shoulder season can be challenging, as revenues tend to go down a bit—yet with advanced planning, it’s more than possible to weather these seasonal dips and be in fighting form for the summer crunch.

Planning for the shoulder season isn’t just about protecting cash flow. It’s also important for home service contractors to think about their employee base. Simply put, once jobs begin tapering off, team members may begin to check out, becoming less engaged with their work—and thus, more likely to get antsy about finding new opportunities.

To keep their top talents engaged and motivated during the shoulder season, home service contractors should get creative about their incentive programs, exploring unique options for keeping team members fully committed to their work.

The Value of Incentive Programs

Creative incentive programs can boost employee motivation in more ways than one. Consider:

·       At the most basic level, offering any kind of substantive reward for good work—whether it’s a cash bonus, a deposit into a tool account or something else—shows that the company is making a real investment in their employees. This can be deeply reassuring during shoulder seasons, as employees are all too keenly aware of drop-offs in work orders.

·       Incentive programs can also be tied to very specific performance goals, whether that’s achieving a certain level of customer satisfaction, a particular first-time finish rate or simply a predetermined level of revenue generated. Having specific goals can inspire team members to meet or exceed expectations.

·       Creating an incentive program may also help to create a positive feedback loop, as employees who meet their targets and earn incentives have their good habits reinforced. For employees who fall a bit short, incentive programs provide a more structured way to discuss areas for improvement.

These benefits are noteworthy no matter the season, but can be especially valuable in slower months, when employee engagement levels are more likely to decline.

Creative Incentive Ideas 

It’s important for home service contractors to think beyond simple salary bumps—especially in a labor market where salaries are already pretty competitive. Instead, it may be prudent to explore creative ways to set targets and incentivize achievement.

A prime example is offering phantom stock. This is not actual stock, and employees do not receive literal ownership shares, but it does offer a way to connect employee incentives to the overall performance of the business.

Employees can accrue phantom stock based on their performance or their tenure with the company, redeeming their phantom stock at any point. When they redeem it, they receive monetary compensation that mirrors the company’s actual value or current share prices.

Phantom stock doesn’t require business owners to dilute their controlling interest in the company, but it does allow them to extend to their employees many of the advantages of ownership. It can also provide skin in the game, which can be especially valuable during the shoulder season—giving employees the extra push they need to keep customers happy, to sell bigger jobs and just generally to remain engaged with their work.

Crucially, phantom stock can be used as a mid-to-long-term incentive option, which can be especially valuable to employers navigating the shoulder season. Even when work slows down, phantom stock encourages employees to think about the long game—not to become disheartened about potential dips in their performance pay.

Phantom stock is one creative approach to employe incentives, but it’s not the only one. Restricted Stock Units (RSUs) work somewhat similarly, awarding employees with company shares that vest at a defined point in time. Generally, these stocks are connected to performance targets or simply to milestones of employee tenure.

Likewise, performance shares vest only when the business itself meets specific performance goals—for example, exceeding a threshold of revenue or growth. Performance shares can function as team incentives, creating cohesion during the difficult shoulder seasons. Retention bonuses are paid in cash installments as employees achieve particular levels of longevity, and profit sharing is another way to provide employees with a direct cut of business profits—as cash or as a deferred retirement contribution.

The bottom line: home service contractors have plenty of options to keep their employees motivated—and with creative thinking and strategic planning, it’s possible to get ahead of the shoulder season slump, investing in retention even if revenues dip.

‍Chris Buttenham is co-founder of Reins, a pioneering technology firm founded in 2023 dedicated to empowering small businesses through modern equity solutions. Reins’ proprietary solution, the Modern Agreement for Rewards and Equity (MARE) program, was built by attorneys and is customizable to meet each business owner’s needs.