Episode 1242 – Hourly vs. Flat Rate: Which Pay Structure Actually Works?
The Big Debate: Hourly vs. Flat Rate
In a recent podcast episode, Mike Campion tackled a key question for cleaning business owners: should you pay employees hourly or a flat rate per job? A listener, Allison, shared that she currently pays hourly but feels like her team is taking too long. She’s considering switching to flat-rate pay and wanted to know the pros and cons.
The Real Issue Behind “Slow” Workers
Before changing pay structures, Mike advises owners to ask: Are my workers actually slow, or are my expectations off? He explains that cleaning times can vary based on real-life factors like customer interactions or unexpected messes. If employees are slightly over the estimated time, it’s not always a problem. But if they are significantly over, it could mean they need better training—or they aren’t the right fit.
Hourly vs. Flat Rate: Which is Better?
Flat-rate pay might seem like a good way to boost efficiency, but Mike warns it can lead to rushed, lower-quality work. While it does help control labor costs, it isn’t always the best option. Instead, he recommends sticking with hourly pay and using performance-based bonuses to reward efficiency, reliability, and company values.
The Importance of a Credit Card on File
In the second half of the episode, Mike tackled another big issue: getting paid on time. A listener asked if they should require a credit card on file for commercial cleaning jobs. Mike’s answer? Absolutely. He explains that too many cleaning companies end up chasing payments, and big businesses can delay invoices for months. By having a card on file, you eliminate risk and ensure you get paid for your work.
Final Takeaway: Protect Your Business
Mike makes it clear—business owners need to be smart about both how they pay employees and how they collect payments from clients. The best-run companies don’t just focus on getting jobs done; they focus on getting paid fairly and on time. Whether it’s choosing the right pay structure or enforcing a strong payment policy, setting clear expectations is the key to long-term success.