People outside Applewood Plumbing Heating & Electric have a hard time believing the company’s Refer an Employee program. But the Denver contractor really does pay its people who refer a new employee $500 every six months for as long as the employee they referred to Applewood stays on the job.

“The program means that two reputations are on the line, the new employee’s and the person who referred him or her,” Marketing Director Paula Washenberger says. “I have referred many people to the company, and I sold them on Applewood before they came to work here. The people I brought in are outstanding. They represent me well.”

Applewood employees enjoy other benefits including health insurance. The company pays 100% of their medical coverage and for their spouse and children, too. Applewood matches its employees’ contributions to their 401K retirement funds.

Those kinds of monetary benefits are important to people such as Master Plumber Jaime Rodriguez, who has a wife and four children. He moved from Orange County, Calif., five years ago to work as a service tech at Applewood.

Just as important, however, is the personal time Applewood gives him to spend with his kids or to attend family functions. He also likes the family-oriented company outings to a Colorado Rockies baseball game or a local bowling alley.

Ready access to company President John Ward and Vice President Josh Ward is one more factor that makes Applewood a special place to work, Rodriguez says. It’s just one of the reasons that Plumbing & Mechanical named Applewood Plumbing Heating & Electric our 2012 Best Contractor to Work For.

“Personally, I think it’s awesome they are here every day and their door is always open,” Rodriguez says. “John and Josh make me feel comfortable. At some companies, if you have a question, they tell you that you have to talk to so and so. I don’t deal with that here.”

Applewood’s roots

Saying he’s a plumber and not a marketing person, John Ward took the name Applewood from the Denver neighborhood where he started his plumbing business in 1973. Son Josh Ward joined Applewood full-time in 1991.

The company worked in new construction and mechanical contracting until 1992 when interest rates hit 18% and the housing market went dark. The same year, John Ward attended a seminar conducted by Milwaukee plumbing contractor and longtime PM columnist Frank Blau.

Blau convinced Ward to convert Applewood into a service-only business. He also encouraged Ward to join a new best practices group he had just co-founded called Contractors 2000. Known as Nexstar Network today, the group welcomed Applewood as its 15th member in 1992.

“We love Nexstar,” John Ward says. “Nexstar has helped to teach us how to run a customer- and employee-focused business with all the systems for accounting, marketing and customer service. We use the information from Nexstar on a daily basis.”

Applewood also belongs to Service Roundtable, the Plumbing-Heating-Cooling Contractors – National Association and the Air Conditioning Contractors of America. The company added forced-air HVAC to its plumbing and hydronic heating offering in 1995.

Today, 50% of Applewood’s business is plumbing, which includes drain cleaning; 40% is HVAC; and 10% is electrical. Residential service comprises 95% of the contractor’s work with commercial service being the other 5%. Company revenues in 2012 totaled $24 million.

Applewood employs 114 people, including service techs, office and warehouse staffs and parts runners. The 61 techs report to Service Manager Mike Taylor and Weekend Service Manager Molly Murphy.

“The number of employees today is as high as it’s ever been,” Josh Ward says. “We’ve been steadily growing since the early ’90s. Generally, there’s more work than we can do. We’re always hiring with technicians being the most difficult to come by because they must be licensed, drug-free and certified.

“We’ll keep hiring. There’s always demand for service, so the downturn didn’t affect us.”

All’s well

The constant drive to recruit good employees was costing Applewood $10,000 a month in newspaper help-wanted ads. That realization led the Wards to start their Refer an Employee program.

“We’d rather keep the money local and give it to employees,” Josh Ward says. “It started from there and it really has worked well.”

Dispatcher Randy Palato has referred four employees in his five years at Applewood. Three work in customer service and the other in the warehouse.

“They’ve been both friends and people I used to work with,” he says. “I tell people how much I like my job.”

Despite the program’s success, Applewood stays aggressive in its other recruiting efforts. The contractor employs two people full-time to recruit, screen and interview job candidates. It is advertising for help in 20 cities on Craig’s List and Monster.com and in trade magazines and newspapers. Once candidates are brought in, Applewood uses the Wonderlic test and technical testing, depending on the opening, for further screening.

“We actually consider our recruiters as part of the marketing department because we look at recruiting from a marketing perspective,” Washenberger says. “We sell the company to job candidates just as we would to a potential customer.”

When an employee refers someone who is hired, the company makes sure to present the $500 check in a group setting. Applewood likes to find ways to recognize a person’s accomplishments. It recently reworked its Milestone program that recognizes an employee’s five years of service to the company and made it retroactive for people with a longer history at Applewood. Employees receive a $500 gift card for every five years of service, and the Wards make the presentation in front of the employees’ peers.

“Employee recognition is important. It keeps us thinking positive and motivates us,” says Rodriguez, who passed his five-year milestone. “But it’s the little words that mean the most. Thanks from John and Josh acknowledging the work I do are a lot better.”

Where possible, Applewood involves employees’ families in company-sponsored events.

“We want to reward our employees for the good jobs they do,” John Ward says. “We’re open from 6 a.m. to 10 p.m. seven days a week. They work long hours or are on call. We don’t see the families a whole lot. These events give us a chance to do that.”

Applewood has taken to communicating directly with spouses and family members in the home through a newsletter to make sure they’re aware of company-paid flu shots and other aspects of the new wellness program. Employees may not always share this information, and spouses can motivate them to participate, Josh Ward says.

“We pay 100% of the health insurance for employees and their families, and that’s expensive,” he says. “We were shocked to hear that only 13% of our male employees had physicals in the last two years since we’re paying for benefits. Two reasons for the wellness program are to get them to use the benefits that are provided and to help them get healthier.”

Customers and community

Applewood takes its training seriously on a variety of subjects including customer service, safety, and office and field technology. For training its service techs, Applewood works with fellow Colorado plumbing contractor and PM columnist Kenny Chapman through his Blue Collar Coach consulting business. Last August he spent a week doing ride-alongs with techs in the afternoon and then breaking down the calls and customer situations with them the next morning.

“Applewood is a model for our industry,” Chapman says. “It’s a great company with great people.”

Full-time trainer John Murphy coordinates the techs’ technical training on products and systems. Applewood works with reps of manufacturers such as Bradford White water heaters. HVAC techs receive much of their training through local distributor Johnstone Supply, with Don Leonardi being the main trainer there.

With 60% of its customers being of the repeat variety, the company wants to make sure its office employees know how to keep them happy.

“Our business is based on repeat customers. All our call-center employees get coaching and intensive training on our software system, our procedures and the quality that we insist on,” Manager of Service Experience Anna Sullivansays of the 11 customer service reps who report to her.  “It’s not just one training session. It’s daily, weekly, and over and over to make ourselves better. Our people care about our customers and make sure their needs are fulfilled.”

Palato came to Applewood with little experience as a dispatcher. His manager gave him hands-on training that allowed him to do his job rather than just reading about it, he says. He’s also impressed with the company’s customer service.

“Applewood is very responsive when it comes to customer concerns,” Palato says. “The dedication to helping our customers is something like I’ve never seen before. We handle their complaints 100%, and we make sure they are 100% satisfied.”

The company’s concern for its customers extends to the community in general. When Applewood hosts an event for employees and their families — such as the flu shot clinic, photos with Santa or an ice cream social — it invites its neighbors.

“Every time we do one of these special promotions, we invite a six-block area around our shop to attend,” John Ward says. “We’re located in a residential neighborhood with our 80 trucks clogging the street and taking up parking spots. We do everything we can do keep them happy. A number of our neighbors are customers.”

Applewood reaches even farther into the community through its charitable donations. Every month for the last seven years it has given away $1,000 per month – $80,000 overall — to small nonprofit organizations. Any employee or member of the community can nominate a group either online or through ads Applewood runs in local newspapers.

“I’m not big into giving to giant charities where we don’t make a lot of impact,” John Ward says. “We give to local charities. That makes everybody happier and makes the community a better place to live.”

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