PM: How are plumbing contractors rethinking compensation today as retention continues to be a challenge?

CB: More contractors are starting to realize that compensation needs to extend beyond short-term pay bumps. They're shifting toward a more holistic approach that builds long-term alignment with their top team members. This means looking past just wages and commissions to focus on how compensation can strengthen loyalty, foster leadership growth, and drive future value. The focus is moving away from simply paying for work to rewarding the contributions that help meet business goals.

What are the biggest mistakes you see contractors make when it comes to structuring compensation for long-term retention?

CB: One of the biggest mistakes is treating compensation as purely transactional. If the only lever is hourly pay or a raise, employees are easy to pull away with a slightly better offer somewhere else. Another mistake is overcomplicating short-term bonus structures with too many variables, which can make incentives feel subjective or out of reach. And in many cases, owners wait too long. They do not think seriously about long-term retention until a key person is already halfway out the door.

Beyond wages, what types of incentives are actually motivating technicians and crew leaders to stay with a company long-term?

CB: The incentives that work best are the ones that create a clear connection between individual contribution and the long-term success of the business. That can include profit sharing, milestone-based rewards, and long-term incentives like phantom stock. What really makes a difference is when employees can see a clear path forward with the company and understand how their dedication and performance play a role in reaching meaningful goals. When incentives are tied to both individual efforts and the broader success of the business, it fosters a sense of purpose and alignment. People are far more likely to stay when they feel they're contributing to something bigger than just earning a paycheck.

How do traditional benefits, like retirement plans, compare to newer approaches such as profit sharing or long-term incentives when it comes to retention?

CB: Traditional benefits are important, but they are usually passive. A retirement plan is valuable, but it often does not create a strong day-to-day connection between an employee’s effort and the company’s success. Profit sharing and long-term incentives are different because they are more directly tied to performance, growth, and outcomes. They can create a stronger sense of ownership and alignment, especially for the key employees who have the biggest impact on the business.

For contractors who currently offer retirement plans, what should they be thinking about beyond those benefits to build a compensation strategy that actually drives long-term engagement?

CB: They should be asking whether their compensation strategy gives top performers a reason to think bigger and stay longer. Retirement benefits are a good foundation, but they do not usually answer questions like, "Do I have a long-term career here?" or, "What's in it for me when the business meets its objectives?" Owners should think about layering in incentives that reward leadership, loyalty, and contribution to the long-term value of the business. That is where retention gets much stronger.

How does the size or structure of a business impact the mix of compensation and incentive strategies that make the most sense?

CB: The right mix depends a lot on the unique goals of that business, as well as how mature it is. A smaller owner-led shop may want to focus on a handful of key people whose retention matters most, using simple long-term incentives that are easy to understand and administer. A larger business with more management layers may have room for a broader mix that includes short-term rewards, profit sharing, and long-term value-based incentives. The structure matters too. The more dependent the business is on a few leaders, the more important it becomes to align those people in a meaningful way. The goal is not to copy what big companies do. It is to design something that fits the realities of the business and the people driving it.