And once Katsam identifies a good prospect they start him (or her) at $9 an hour with potential raises up to 50 cents and hour at 30, 60 and 180 days. Benefits include a four-day workweek, health insurance (at six months), an employee assistance program, seven paid holidays, 401(k) plan with a company match, and two weeks paid vacation after one year.
“Plus they get to work in a safe truck,” Larko says. “I don’t allow a driver to take a truck that’s not safe out on the road and our maintenance department has standards that will not allow an unsafe truck on the road.”
Tracking – and Reducing – OT
Larko says another area that caused concern was operator overtime. Most contract sweepers accept overtime as a natural part of the business, but there’s a difference Larko says between justified and unjustified OT.
“We had reached the point where overtime was out of control and we hadn’t added anything new,” Larko says. “It was just a level people were getting comfortable with, both our drivers and us.” But as the economy got tougher and clients were cutting back, Katsam looked to see how they could trim overtime pay.
“If we have special jobs, fine. If people are out sick and another driver has to work longer to cover him, okay. But if we had 30 hours of OT that we can’t account for then we have to fix that.”
Katsam’s first step was to find a way to monitor exactly what was happening each night. The traditional time clock employees punched didn’t provide the specifics they needed, so they turned to a GPS system called Eagle Eye. Among the capabilities of the system are:
• If the driver is in the truck and the truck isn’t moving it considers them on break and they get no credit for that time or toward overtime.
• It documents and can display on a computer screen driver routes, sweeping patterns, and speeds on the route while sweeping.
Nicholas and Larko wanted the GPS to tie directly into their payroll system, and once the two were integrated they could generate payroll directly from the GPS information. That is when some real savings came to light.
To verify the new GPS information Katsam for six weeks tracked what they were doing on time cards and also on the computer using Eagle Eye. Among what they learned was that employees were coming in to the office, punching in, and then standing around having a cigarette, going to the bathroom, talking with other drivers, changing into their uniform, and doing the pre-trip check of the truck. Similar types of things were happening at the end of the day.
“It was taking them 45 minutes to get out onto the route and the same thing coming back in,” Nicholas says. “That’s a lot of time wasted that ends up as overtime by the end of the day.”
As a result Katsam now allows 15 minutes per trip in the yard and 20 minutes at the end of the shift to clean the truck and do paperwork. “It shouldn’t take longer than that and we’ve saved time on pre- and post-trip checks on the truck,” Nicholas says. “It forces them to get out and do their work.”
“We were paying some guys 13-14 hours a day four days a week and we took it down to 10-10 ½ hours a day with anything over 40 hours per week being overtime,” he says. “We have taken at least 20 hours of OT out of payroll each week, which is 40 hours every pay period,” Nicholas says. “At $15 per hour we’ve saved at least $600 of payroll a pay period, not including taxes. If we save $600 - $900 per pay period times 26 pay periods it adds up to a lot of money.”
He says it also helps Katsam evaluate its manpower. “If we’re averaging 20 hours of OT every pay period that’s half a man on the payroll,” he says. “If that keeps up then we have to consider is it worth our while to bring in another person?”
As a result of all its cost controls Katsam has been able to weather the last couple of years without making significant cuts in employees or benefits. In fact Larko says the only real cuts the company made were done through attrition.