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How To Choose the Right Compensation Structure For Your Cleaning Business

July 16, 2021 in Business

This article is based on a presentation by Tom Stewart from the 2020 Maid Summit. Tom is the CEO and founder of Castle Keepers House Cleaning, and Maid Central. In this post, we’ll go over some tips to take away the guesswork of different payment models by showing you the pros and cons of different compensation methods. 

A common hurdle experienced by maid service owners is how they should pay their cleaning professionals. We’re not talking about direct deposit versus PayPal. We’re talking about the different compensation structures and how to choose one that makes sense for your cleaning business. 

How and how much you decide to pay your cleaners ultimately depends on your unique business and how you want to structure compensation for your team members. Early on, you might experiment with different ways of paying your staff by trying out hourly or commission-based pay.

In this post, we’ll go over a few of the ways you can choose to structure your payment models, as well as the benefits of using a performance-based payment model. 

How should I pay my cleaning professionals? 

There are a few different ways you can structure how you pay your cleaning professionals. Some of the most common methods include hourly, commission-based, and salary. 

With each of these models come some decisions you need to make. For example, you need to decide how much to pay hourly or salary employees or what percentage of commission to pay commission-based cleaners. 

Let’s get into some of the pros and cons of each way to pay. 

Hourly pay 

With hourly pay, you pay your cleaning professionals for the number of hours they work that day. On the surface, this method looks pretty straightforward and fair. And it is a great way to pay your cleaners to compensate them for their time. 

However, there are a few downsides to hourly pay. Paying your cleaners hourly doesn’t incentivize them to be more efficient or use their time wisely. 

Since you are paying them for the hours they work, they don’t have any reason to work more quickly or find ways to optimize their processes. They may feel inclined to spend more time on each job so that they get paid more. 

Commission-based pay 

With commission-based pay, you don’t have a set base pay for your employees. You only pay your employees based on the houses they clean. So depending on how much you charge per cleaning, you will decide what percentage of that price you will pay your cleaners. 

This method works best when hiring contractors or outsourcing your cleaning jobs on a per-job basis. Using commission-based pay can also incentivize your cleaners to market your business for you and try to bring on their own clients. 

Salary pay 

When you pay your staff a salary, you are paying them a fixed amount every month with the expectation that they work a certain number of hours per day or week. Paying your cleaners on salary helps build trust and stability, and nurtures your relationship with your staff. It can also incentivize them to continue working with you long-term. 

One of the downsides of hiring salaried employees is that they may get too comfortable. Since they are earning the same amount consistently, despite how much they work, their work quality can sometimes decrease over time. 

With salaried staff, it’s important to have frequent check-ins and milestones for employees to meet and work towards. You should also have a solid quality management program in place to track cleaner performance and your customer’s satisfaction. 

Incentive pay

There’s a lot of value in incentive payment plans for cleaning professionals. They create an incentive for staff to meet the scope of work as quickly as possible. This creates the opportunity to clean more homes and generate more revenue for your business. 

As the name states, it incentivizes your cleaners to work quickly and efficiently to help them earn more. 

With incentive pay, you want to make sure you are paying at least a minimum base wage and then adding an incentive for each home they clean. 

So to make incentive pay work, you still need to determine an hourly or salary base rate and then determine what percentage of each cleaning you want to pay your employees on top of their base pay. 

How much should I pay? 

You always want to make sure you are paying your employees as much as possible without breaking the bank. After all, they are the ones interacting with your clients and acting as ambassadors of your brand. 

Even before you decide HOW to pay, you should choose HOW MUCH you can pay. Figuring out how much you can pay your employees to be competitive requires you to have a solid understanding of your numbers

You want your company to be a competitive place to work, and you want to attract top talent. But you also need to make sure that you are profitable. 

One of the first steps to determining how much to pay is to research other cleaning businesses in your area. You can also shop around on sites like Indeed, Craigslist, or other job boards to see what other cleaning businesses are offering their employees. 

Lastly, check the Bureau of Labor Statistics and search for the open market rates in the house cleaning industry to make sure that you are paying livable wages. 

Here’s a screenshot of the average wages for the house cleaning industry as of May 2020. 

Once you establish how much on average you should expect to pay your cleaning staff, use any data you have on your business to figure out how many recurring clients you have and how long the average cleaning usually takes. 

Take a look at when your cleaner’s workday starts and ends and their clockable hours versus their working hours. 

Their clocked time is when they are clocked in, whereas their job time (working hours) is how much of the time they actually spend working on houses during their workday. 

Use this information to compare different compensation methods to determine which strategies would be the most beneficial to your staff and make the most sense for your bottom line. 

Having the right payment plan is really important to get the outcomes you’re looking for. 

Final Thoughts 

A lot of people think house cleaning is a job for low-skill, low-wage workers. But that’s just not true. You want to hire the best talent for your business, regardless of what your business is. And to do this, you need to make your business as competitive as possible to attract great employees. 

As a cleaning business owner, your cleaners are one of the most significant assets (if not THE biggest). Paying your employees fairly while still maintaining your profitability is a delicate balancing act. 

Even the most successful cleaning business might try a few different payment methods before figuring out the right one. Also, as your business grows and evolves, the way you pay your staff might change as well. 

It’s important to reevaluate your pay structure every once in a while to make sure it still makes sense for your business. 

To learn more about these different pay structures and determine if a performance-based payment model is right for you, check out Tom’s full presentation from the 2020 Maid Summit. 

The Maid Summit, hosted by ZenMaid, aims to help maid service owners overcome their hurdles and grow their businesses. It features talks by over 40 industry experts, maid service owners, marketers, and more. Get full access to all of the replays here. 

Read more helpful articles to help you grow, scale and automate your cleaning business on ZenMaid Magazine:

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About the author: Amar is the founder and CEO of ZenMaid Software, Inc (www.zenmaid.com). He previously started and ran Fast Friendly Spotless, a maid service in Orange County, CA. With the help of customized software to automate work he successfully operated the service in under 30 minutes per day. His goal with the maid service software at ZenMaid is to help other maid service owners do the same.

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