Staying on site

A Luke Brothers Landscape Services crew installs annuals at a client's site.As fuel costs soared to the highest many people had ever seen in 2008, some businesses suffered financially. But the landscape industry was dealt a particularly hard blow – getting hit with fuel expenses for not only large trucks but for equipment as well.

For Pete Lucadano, president and CEO of Luke Brothers Landscape Services, Holiday, Fla., these rising costs were the catalyst for a big change.  Lucadano decided to implement more site-based operations in the company’s commercial maintenance division to reduce overhead costs for his business, which is estimated to do $13 million in revenue this year. In addition to saving on fuel and travel time, he felt it was also a way to maximize labor time. Instead of paying employees to drive to and from work sites, he began clocking them in once they reached their sites.

In addition to reducing expenses, Lucadano says a benefit that he didn’t originally consider has been the fact that this arrangement limits his liability since employees are spending less time on the road.

“It’s a dual liability in this industry – you’re exposing yourself to both workers’ compensation and vehicle liability issues when people are in the truck and on the road,” he explains. “Part of our safety program is trying to get people off the road and in the field more. It’s a dangerous industry but the most danger tends to come from all the driving that’s typically required.”

Lucadano adds that equipment is also most likely to get damaged in transport to and from a work site, so by setting up more site-based operations, he has been able to reduce this risk as well. The equipment is now typically stowed on site.

Another unforeseen benefit has been the response from clients. “There’s been a huge value gained by the fact that our clients are seeing personnel on their property every day,” he says. “It gives them a level of comfort knowing that they can count on your staff.”

From a labor standpoint, this new arrangement has changed the way Lucadano hires. “It’s been a chance to hire from different labor pools that are close in proximity to a particular site,” he explains. “In the end, it’s allowed us to increase our employee base. Employees are now hired for a specific property.”

An interesting side effect of employees being hired based on proximity to specific accounts has been an improved employee attitude.

“There used to be a mind-set that there would always be more work,” Lucadano says. “If an account was lost it wasn’t the end of the world to most employees because they figured they’d just move on to the next job. As a result I found it difficult to convey a sense of importance about each and every account. Now that we’re hiring for a specific property, however, employees are very aware that if we lose that client, their opportunity is lost as well. It has helped employees take ownership for specific properties and put in their best effort to keep the client happy.”

Of course, as with any major change, there are always challenges to overcome. Lucadano says one major challenge with this business model has been management. Initiating more site-based operations has meant staying more on top of accounts than ever before. “Each site has to be overseen extremely well,” he stresses. “Since employees aren’t checking back into the office regularly, it’s crucial to ensure the on-site crew has working equipment, product and anything else they need – even if it’s just uniforms. Every little detail needs to be managed by account managers who are really dedicated to their properties and doing regular routes to check in on accounts.”

Lucadano adds that the client relationship can’t be left to only the on-site man because he can be easily swayed.
“I’ve seen this happen before where the on-site foreman can become distant from the company since he’s not checking in to the office, but rather checking in at the site,” he explains. “It can become clouded that the employee is working for the company and not the property itself. As a result, it’s important to have good oversight from an account manager.”

Another challenge with on-site operations is supplying the crew with fuel. Even if a client allows for use of their shop or garage for equipment, many times they aren’t permitted to allow fuel storage. Lucadano says he has overcome this challenge by ensuring that these issues are addressed up front, before the job even begins.

“We find a solution before we start the job rather than having to shut it down at the last minute because of something like fuel storage,” he says. “Each scenario is different and the options need to be weighed, but sometimes spending the money for a monthly rental of a container or on-site shed is worth the investment.”

Lucadano says that despite some challenges, running more site-based operations has been a positive change. Others considering a similar move should take into account that it would allow them to bid and work more competitively in today’s marketplace, he says.

“I would tell other contractors to approach bidding with a more conservative pricing model and be open-minded to consider more site-based operations as an option,” he says. “Test it out with certain clients. They are often open to the idea and will even offer use of their facilities at no charge in exchange for a full 40 hours per week of work on their property. Also keep in mind that jobs don’t have to be 100 percent on-site. We do a lot of hybrid projects that allow us to keep only part of the job on-site. This often works well for everyone.”

The author is a freelance writer based in Royersford, Pa.