LESSONS LEARNED: Locking Up Labor

When Jeff Korhan first heard about the H-2B program, he didn’t think it applied to his Plainfield, Ill.-based design/build business, the Treemendous Landscape Co.

“It always sounded like it was something that wasn’t for us,” he recalls. “It sounded like something that was for people who needed to hire hundreds of employees, meaning companies that do a lot of large commercial projects.”

But after learning more about the program during the 2003 Green Industry Expo in St. Louis, Korhan changed his mind. Korhan ended up hiring a dozen H-2B employees and was so satisfied with the results that he applied again for the 2005 season. Unfortunately, Korhan was one of many contractors throughout the country who didn’t get their H-2B applications in before the 66,000-worker cap was reached in January.

Korhan was forced to fill positions the old-fashioned way – by advertising and carefully screening applicants. Korhan says missing the deadline has made finding qualified candidates more challenging but that it’s also helped the company fine-tune its hiring practices. 

“The biggest benefit of H-2B is that it got us to really focus on the workforce,” Korhan says. “We had to because we were bringing in these guys who knew nothing about the business. They were just able-bodied men, and that forced us to really focus on finding guys who will work harder and were willing to learn. When people know you’re watching and that you’re involved and engaged with them, that’s going to improve productivity.”

Since Lawn & Landscape spoke with Korhan, President Bush signed into law changes to the H-2B bill that will make any H-2B worker from the last three years exempt from the 66,000-worker cap. Korhan says he plans to reapply for more workers but that he’s still cautious. “I know I’m still committed to H-2B but much more gun-shy given what we’ve been through,” he says.

Prior to H-2B, what was your hiring situation like? We’ve had some good guys work here, but I didn’t feel like I had control over the workforce. There were issues that if I had a full-time HR person, I could have handled those issues – people holding you up for another 50 cents an hour or showing up under the influence. The primary motivation of H-2B is we wanted a stable workforce.

What was your experience with immigrant labor prior to H-2B? I’ve had numerous regulatory issues with the county, zoning, EPA and the Department of Agriculture that we’ve managed to learn as we go. So I made the decision that if we’re going to do this, let’s just do it right so we know that we have a workforce that is properly documented, and if we put a bunch of money into training these guys, we know that we’ll be able to reap the rewards. Before, we would always have this core group, but we’d put this time and money into training people, which could take months, and then they’d move on because the grass is always greener somewhere else.

So how is that situation different with H-2B? These guys think about it as a contract. They’re here for work, so we’ve got a year to develop a relationship and prove that we’re a good company to work for, and if we do our job, then they want to come back, so it adds stability to the workforce.
 
What did H-2B do for your company? The results were, No. 1, by default it forced us to put more emphasis on the field labor force, and that increased productivity and made us more profitable. No. 2, it stabilized the workforce. We didn’t have this revolving door of guys, so it made our work easier. We didn’t have to worry if the guys were going to show up on Monday. I don’t think our H-2B workers missed a single day all summer long. And that sent a message to the other guys, so things started to gel and we began to establish some cohesiveness, and it was a great season from a team-building point of view.

So what happened this year when you tried to apply for the program? We knew that it was going to be a tough year from the start. Just about everybody in the industry was telling us that, so we stayed on top of it, and every step where we could expedite things we did. And things were looking, we thought, good. We started to get all of our approvals in the second week of January. That wasn’t soon enough, whereas the previous year we got a late start and got our approvals back later than we would have liked. This year we were planning to bring them up here March 1, way ahead of schedule, and it just didn’t work out.

Is there anything you would do differently in the future to ensure that your labor demands are met? I don’t have any regrets. I can say we learned a lot, and we’re applying those lessons to the workers who we are bringing in. It did help us to clean up our systems with respect to our hiring process, interviewing process, drug testing and so forth. It’s unfortunate – you build a relationship with these men. My biggest regret is that they put their trust in me, and I have not been able to deliver. And it’s hard to tell them it’s the political system, and there’s nothing I can do. So what I’m going to do is just not rely on it as heavily. I put a little too much reliance on it. We’re a small company, and probably half of our workforce was H-2B, so that was probably not the best thing to do. H-2B will be an adjunct to the workforce that we have now. And we’ve got a lot of new guys now, obvi ously, because we started working early this season and put a lot more focus and attention on it. So far, it’s working out fairly well, but it puts a bit of a burden on all the managers because they’re having to train entirely new guys.

You said you ‘learned a lot’ from the process. What exactly did you learn? We’re really not doing anything differently – we’re doing it better. When potential employees come in to fill out an application, we don’t just give them the application, have them fill it out and then evaluate them. We walk them through some paces. We tell them about our company and spend more time with them, so we have a lot more focus and involvement and better results.

How do you retain employees? We offer a below-market wage plus an incentive. We ask them, “How much do you think you are worth?” Then, I offer them a buck or two below what they think they’re worth and tell them they’ll make up that and then some. It’s based on incentives and budgets, and if you can deliver, then you should have no worries. But if you’re a short-timer who probably isn’t looking to deliver, then you’re probably not going to even take the job, which is what usually happens.

How are you dealing with the H-2B cap this year? I sensed it wasn’t going to happen, so I started trying to find people locally. We took every single person who walked through our doors seriously. If we thought the guy was a strong candidate, we hired him. Our strategy was to overhire and let go of guys who aren’t working out. We tracked their hours, set up systems and put them with other workers who expected them to participate as part of that team. We basically set up a system whereby the weeding out process is handled in the field because everybody wants to make more money with profit-sharing, and if you’ve got one guy on your team who is not performing, you either work with him to get him to perform or else.

What would you recommend to a contractor who is considering the H-2B program next year? Honestly, I wouldn’t do it because we relied on it and it took an enormous amount of my attention. I gave presentations at our chamber of commerce. I spoke to the legislative committee. And it’s still in limbo. So what I told people is that if you can find people some other way, then I would recommend that route first. I would not recommend it for a small company like mine unless you can’t find people. H-2B is a lot of work. It’s a lot of effort and a financial investment, and we’ve only proved that it’s not going to work every time.