February 16 Mid-Month Blast
From: Raymond J. Bailey Sent: Wednesday, February 9, 2022 4:56 PM
Lone Star Town Hall Meeting is scheduled for March 24th at 2:30.
Inclement Weather Policy
Lone Star is making a change to its inclement weather policy. We will now cover up to four days of inclement weather each year. After discussion with the COOs and HR, we have concluded ice days are not common in all offices and the number of times we close a jobsite or the offices is even rarer. Therefore, if in the future Lone Star is forced to send an employee home for the day due to inclement weather, Lone Star will pay you for the time your time off work. Lone Star will cover up to 4 days a year and any longer period will be addressed at that time. During your time off however, you may be assigned work that can be done remotely or learning modules on the LMS to study so that you can make the best use of your time. This change is effective immediately and we have already covered last week’s work stoppage as a result of the storms.
PTO Policy Update
Also, effective immediately, our PTO policy is changing so that all salaried employees will have open PTO beginning after the 60-day probationary period when joining the company. Any salaried employee that has been hired within the last 5 years under the accumulated PTO policy will automatically be changed to the new policy as soon as any accumulated PTO is consumed. All employees under the open PTO policy are still required to submit PTO requests for time off and managers must still approve the time prior, but PTO will no longer be tracked for these employees.
In addition, going forward all new employees will start with 40 hours in the PTO bank and will accumulate PTO as described in the handbook.
Thanks For Your Input
These policy changes came as a result of questions and comments from the Emplify survey Lone Star employees take each quarter. Sometimes these suggestions have a significant cost impact and need careful consideration as to the impact to the company and to your profit sharing bonus. Sometimes these suggestions are appropriate and are implemented. This particular suggestion came from the last survey and prompted management to review policies and research the impact of the changes, and it was determined the value of the employee satisfaction was worth the cost of the changes. Though sometimes it is perceived management does not listen, this action is proof that the surveys are reviewed, and the suggestions are considered. It can sometimes take a while to respond to give us time for proper research and review. However, I can assure you all suggestions are considered for their value and impact to the company and the employees.
Thank you to those that took the January Emplify survey. We will explain these changes again and take questions at our next Lone Star Town Hall Meeting scheduled for March 24th at 2:30.
It’s Newsletter time again!
I would like to announce the promotion of John Borden to Director of Education Sales for the Lone Star Communications Company. John will be responsible for education sales in all regions and will work with the sales staff in every office. This position will require travel to every office to mentor and teach salespeople the idiosyncrasies of selling to schools and school districts. John has been in sales in the Grand Prairie office since 2004 and has become
an absolute expert in education sales. John joined the company in 1992 within the first 12 months of Lone Star’s opening in the DFW marketplace and has been a valued employee ever since. John began as an installer but quickly became a Service technician and later the Service Manager serving in that role for 6 years as part of the Customer Services group. John spent a year in project management and brilliantly managed one of the largest TCIP/CPS projects in the country for the Keller ISD before moving into sales. Join me in congratulating John on this well-deserved promotion.
Profit Sharing. This was included in last week’s update to the employees, but the Profit Sharing for the last quarter of 2021 has been delayed due to the slowdown of closing the year in financials. Profit sharing is normally scheduled to go out on the second payroll of the month following the end of the quarter. The month following the end of the 4th quarter is January and the second payroll is on the 28th this year. However, due to the closing of the books, this has slipped to the first payroll of next month or the 11th of February. After seeing the issues that can come up at the yearend such as audits, we will be discussing if the first February payroll is a more predictable time to plan for a distribution each year. That would allow time for the financials to be closed and prep work accomplished so that the annual audits can be completed in time to meet the timeline for the IRS tax deposits. There is a lot to complete with closing the financials in four regions and the overall company. This would allow the accounting department to complete this work and spend a little more time on the Profit-Sharing programming. We will make everyone aware of next year’s distribution date before year end.
Cost of Living. Over the years we have established March as the time of the year to review the cost of living changes that have affected us and to make a cost of living adjustment, COLA, if warranted. 2020 was a tough year with Covid locking us down and out of some jobs, still we did a COLA increase of 2.19% in July 2020. In early 2021 inflation was low again and the adjustment made was 1.4% which was made in March, just 8 months later. In April 2021 we did merit raises as well. In November of 2021 it was obvious that inflation had hit us, so again, we did a mid-year adjustment of 4.0%. After a discussion at our Strategic Planning Session last week referring to inflation and wages, then seeing the news this weekend, it appears this inflationary period is likely to get worse before it gets better. Therefore, Lone Star is adjusting the pay of everyone in the company that is not on a commission program by an increase of another 5%. (Employees on a commission program have their own bonus program separate from the profit-sharing program.) This 5% brings the increase in wages since April of 2021 to 10.4%, or 3.4% ahead of the current inflation rate of 7%. Of course, Lone Star cannot bear this burden alone and will have to increase prices to make up for these adjustments. As you know that is the cycle of business. See the articles below for the actual inflation rates for 2020 and 2021.
2021 Inflation. The annual inflation rate in the US accelerated to 7% in the last month of 2021, a fresh high since June of 1982, in line with market expectations and compared to 6.8% in November. Energy was the biggest contributor to the gain but the rise was smaller than in November (29.3% vs 33.3%), with gasoline prices surging 49.6% vs 58.1%. Inflation accelerated however for shelter (4.1% vs 3.8%); food (6.3% vs 6.1%), namely food at home (6.5% vs 6.4%); new vehicles (11.8% vs 11.1%); used cars and trucks (37.3% vs 31.4%); apparel (5.8% vs 5%); and medical care services (2.5% vs 2.1%). Inflation spiked in 2021 due to pandemic-induced supply constraints, soaring energy costs, labor shortages, increasing demand and a low base effect from 2020. Inflationary pressures are likely to last well into the middle of 2022 and Fed Chair Powell recently pledged to do what’s necessary to contain an inflation surge including increasing interest.
2020 Inflation. United States of America - Average consumer prices inflation rate. In 2020, inflation rate for United States of America was 1.2 %. Though United States of America inflation rate fluctuated substantially in recent years, it tended to decrease through 2001 - 2020 period ending at 1.2 % in 2020.
The SPC, Strategic Planning Committee, met January 19th and 20th and reaffirmed our commitment to our BHAG of driving growth company wide to more than 3 ½ times the size we are now up to 1000 employees leading the company. This growth is necessary to keep up with the growth of our customers and the industry as a whole. This growth is what leads to opportunities for employee growth as well. Each time we add a new market or grow organically, we create new opportunities within the company that we hope can be filled from within. As you move up, others behind you get the chance to move up as well. All of this is good because it leads to higher wages and fresh opportunities for everyone along the way. Growth is good for the company, and it is also necessary and good for our customers. Our customers grow by buying or building hospitals, businesses and schools and as they get bigger, they want to standardize just like we do at Lone Star. One of 2021 Lone Star initiatives is One Lone Star. One Lone Star refers to all regions aligning processes and pricing to be the same company wide. Why? To maintain our quality and delivering the right product to our customer the first time, on time, no exceptions. Do you recognize that? Yes, it’s our mission statement. We need to deliver our mission the same everywhere. For instance, we have HCA hospitals in all regions. If an HCA hospital is getting a proposal from more than one region, they expect and should receive the same price whether that price comes out of Houston, Little Rock, Central Texas, or Grand Prairie. The product they receive should be the same out of every region as well.
Lone Star Success Flywheel. Have you seen the Lone Star Flywheel? This flywheel is a representation of what we do to create success at Lone Star. It reads like this: In the center of the flywheel is the core item we do: to deliver the right product every time. “Strategically Solving Problems Through Proactive Life Safety Innovation”. What does that mean? It means, at the core, Lone Star Communications is all about quality. Our Mission Statement reads:
“Lone Star Communications will deliver the right product to its customers. The product will be defined as either service or equipment or both. Quality is not to be defined by our competitors’ standards, but by our own high standards.
We will deliver: the right product, the first time, on time, no exceptions.”
This mission statement was written before the doors at Lone Star were ever opened. It was decided before we sold a single job that everything we sell would be sold as appropriate for the venue and of a level of quality we set upon ourselves, not the standard of competing companies, but by our own high standard. This means we will not just meet what the competitors do. When we provide a product, which is defined as equipment, or service or both, it will be delivered at a high standard we set. We hold ourselves to that high standard, no matter what others do. In other words, we provide quality.
The flywheel goes on to read, by “Strategically Solving Problems Through Proactive Life Safety Innovation”, we Make Communities Safer, the next ring surrounding the core. The outside ring of the core reads: By solving customers problems and making the communities safer, we bring in revenue. Pretty basic. We get paid because we solve problems, and by solving problems, we make the communities safer which is our purpose.
The moving arrows are to be read one leading to the other in the form of “because we (arrow text) we (next arrow text)”. Let’s start at the top, “Deliver Outstanding Products”. As I said above, we are a quality company and we deliver only the best, in fact, we are the best at what we do! So, the flywheel reads, because we “Deliver Outstanding Products” we “Attract Elite Influential Clients”. We are exclusive partners to many IDNs in our markets: Baylor, Methodist, THR, HCA, VA in San Antonio and so forth. We deliver outstanding products and solutions to these facilities and, because we do, we are their partners, not just vendors, partners for life.
The next arrow is “Create Customers for Life”. So, it reads because we “Deliver Outstanding Solutions” and we “Attract Elite Influential Clients”, we “Create Customers for Life”. Because we“Create Customers for Life”, we “Grow Revenue and Recurring Revenue”, the result of doing the job and doing the job right every time.
Because we “Grow Revenues and Recurring Revenue”, we can “Invest in Our People and Products”. We invest in our people through benefits such as healthcare, life insurance, disability pay, HSA, dental, vision, with our in-house training, outside manufacturer training, the education credit available to every employee, profit-sharing, 401k, and many other programs. Because we can and do “Invest in Our People and Products”, we “Attract the Right Employees”. Because we “Attract the Right Employees”, we “Deliver Outstanding Solutions” and so goes the flywheel of Lone Star’s success. We feel this is what makes Lone Star successful. The right products, the right customers, and the right people and we make the world a better place by making our communities safer. One Team, One Purpose, One Family.
Wage Review. Another initiative the SPC has identified is wages are in need of a thorough review and has created a new “Rock” to review the payroll range of every position in the company. The goal is to verify we are paying an appropriate wage for each position and adjust where the wage justifies an increase. This increase will be completed along with merit raises this year and should be complete in the late April/May timeframe. With the recent adjustments made to salaries and the wage rate so far this year, this should be good timing for adjustments if warranted.
Employee Advisory Council Another “Rock” created by the SPC is the employee advisory council. It is the plan of the SPC to create an advisory council of employees from every part of the company and every office/region to become the voice of the employee to management. The concept being, some of the issues that come up in surveys, SWOT/SWT meetings, and brought to HR directly, are issues employees can better solve as a group that can discover how to solve them quicker and sometimes better than management. The plan is to have an advisory council in place that can take an issue directly to all employees. This might be through a company-wide meeting, GoToMeeting, or in person in smaller settings to discuss these issues and find a solution from the employees directly. Then, they will bring the ideas back to management to see if they can be implemented. We fully expect this to become a place where employees can be identified for their leadership skills and new company leaders will emerge. Some of the issues ready to be submitted to this new board are things like work from home policies, what can Lone Star do to become even a better place to work, and up-leveling communications.
Whew, as you can see, we are off and running already this year. We have a lot of ideas on how to make this an even better place to work even though we were recognized as one of the Top Workplaces in the USA for 2022. We will continue to improve, and with your help, Lone Star will be the place to work for a long time! Ray
- Ray Bailey, President