Ask The Experts – Daikin Elite

A Contractor University Member recently utilized the Ask-The-Expert Q&A feature within the member dashboard by submitting the following question and received the response below.

Contractor Question:

“When a trainee is working alongside an experienced crew and their wages are charged directly to the job, what percentage should we use as a reasonable labor target?”

Contractor University Expert Response:

“If your normal installation labor target is 9%, it may not be realistic to hold a crew with a trainee to the same standard. When a trainee’s wages are included as direct job labor, the labor percentage should account for both productive installation work and the time being invested in employee development. As a general guideline:

Experienced crew with no trainee: 8%–10%

Experienced crew with an advanced trainee/helper: 10%–12%

Experienced crew with a developing trainee: 11%–13%

Experienced crew with a brand-new trainee: 12%–14%

For a crew working with a true trainee, 12% is a reasonable starting target. Compared with a normal 9% labor KPI, this provides roughly a 33% allowance for the additional training expense. For example, on a $15,000 installation:

Labor budget at 9%: $1,350

Labor budget at 12% with a trainee: $1,800

Additional training allowance: $450

That additional labor allowance does not mean the crew should automatically spend more. It simply recognizes that the job is supporting two objectives at once: completing the installation efficiently and developing a new employee.
Start by tracking trainee jobs against the 12% benchmark for 60–90 days. If those jobs consistently fall within a different range, you can adjust the target based on your company’s actual performance.
Long term, consider separating training labor from direct installation labor on your profit and loss statement. Doing so can provide a clearer view of installation gross margin, crew efficiency and the true investment your company is making in developing its workforce.”

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A Contractor University Member recently utilized the Ask-The-Expert Q&A feature within the member dashboard by submitting the following question and received the response below.

Contractor Question:

“What terms and conditions should be included in a one-year labor warranty for new system installations and repairs? How should it address response times, manufacturer-covered parts, labor, refrigerant and claims related to work completed by a previous owner?”

Contractor University Expert Response:

“I especially appreciated that you brought up the customer experience in your question. I believe there’s often a balance between doing what is required by your terms and conditions and doing what’s ultimately best for your customer.

One of the most valuable assets you acquired through your acquisition was your customer base. Protecting those relationships is worth thoughtful consideration. I would recommend establishing a threshold that makes sense for your business—for example, $500. When I owned my business, if resolving an issue cost $500 or less, I viewed it as a worthwhile investment to retain the customer and avoid potential negative reviews, which can be far more costly in the long run.

I’m certainly not suggesting that you “give away the farm,” but having a clear policy in place can help your team make consistent decisions without having to evaluate every situation on a case-by-case basis. After all, it’s almost always more expensive to acquire a new customer than it is to keep an existing one.

I completely agree that having clear, written documentation outlining exactly what is and isn’t covered under your warranties and guarantees is an important part of setting expectations and delivering a great customer experience. Please reference these documents that can help you get on the right track.”

Guarantees Handout Pricebook Tool & Training Materials Guarantees for Selling Process

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