The beginning of the year is a great time to review company policies to ensure they are up-to-date and relevant to a contractor’s particular business. Policies pertaining to employment practices, safety issues, and insurance coverage obviously need regular attention, but so do policies such as who provides the tools that are used in the field. Tool policies should be reviewed at least annually to confirm that contractors and technicians are both satisfied with the arrangement, as well as to ensure that everyone is clear on who provides which tools and what the rules are for broken, lost, or stolen tools.

Evolving Rules

Envirotech Heating and Cooling (Shawnee, Kan.) specializes in residential service and retrofit work, and its five technicians are required to provide their own hand tools, including screwdrivers, nut drivers, wrenches, pliers, sheet metal tools, electric meters, refrigerant gauges, temperature gauges, torch sets, and drills. The company used to require technicians to purchase their own vacuum pumps and refrigerant scales as well, but the tool policy recently changed so that Envirotech now buys those, as well as reclaim machines, carbon monoxide detectors, hole saw blades, and gas bottles. The company has also established a personal tool account for technicians.

The reason for this evolution, noted company president James Gallet, is that there was a need for technicians to have dependable units, so he bought durable, more expensive equipment that would work reliably in the field. “Technicians can also charge any tool to their personal tool account, which has a limit of $350. If they go above that amount, they need authorization. This is a no-interest account, and technicians pay back the company through a flat $30 deduction from their paycheck until the tool balance is back to zero.”

The tool policy at Atchley Air, a residential and light commercial service and retrofit firm in Fort Smith, Ark., recently changed as a result of growing complaints from technicians, as well as management. For over 20 years, the company provided all the tools for its technicians, but this turned out to be more of a headache in the long run. As company president, Michael Atchley, explained, “Technicians complained, because we weren’t buying the brand of tools they wanted. Technicians would also have to keep their tools under lock and key — which rarely happened — or else the other technicians would raid their tool bags and swap out their old tools for anything that looked better than what they already had. If a new technician was hired and the company bought new tools for him, the other techs were upset that the new guy had a new set of tools and they didn’t. It was just a mess.”

Management was also upset, noted Atchley, and complained that technicians did not take care of the company-purchased tools and were not appreciative of the benefit that was provided to them. “I’m a big believer in personal responsibility, and I know from experience that people will take better care of items that belong to them and that they had to work to obtain. Our policy of providing everything did not encourage personal responsibility, so we changed it.”

To that end, Atchley created a list of 40-plus tools that technicians must now purchase on their own, including hand tools, cordless drills, and shop vacs, while the company provides higher priced or specialized tools and test instruments. The company also provides ladders, recovery machines, vacuum pumps, reciprocating saws, torch rigs, leak detectors, gas leak detectors, carbon monoxide detectors, and micron gauges.

In addition, Atchley Air started tool allowance accounts for each technician. The company contributes $50/month to each employee’s account, which allows them to earn money to purchase replacement tools. They can buy whatever they want with their tool allowance, and the tool is theirs to keep; but if they lose or break a tool, they must replace it from their tool allowance.

“If they don’t have enough in their allowance, we buy it and keep track of their balance until it is paid off,” said Atchley. “If they leave the company before they are out of the hole, they can either leave the tool with us, or they can pay us out of their last check. While we haven’t been doing this very long, it seems to be working so far. It has certainly cut down on the amount of bickering between technicians and management.”

Mark Schneider, president of Pacific Aire Inc., Camarillo, Calif., noted that the tool policy for his 12 residential service technicians and eight installers is also constantly evolving. “We have tried buying all the tools, but there was no ownership, so that didn’t work, and we had to replace them constantly. Then we tried giving them a program to earn their tools, but we had to manage that pretty closely.”

Now the technicians and installers at Pacific Aire must buy all their own tools with the exception of recovery machines, tanks, ladders, and infrared cameras. “We do adjust their pay as they add specific tools to their tool box, and we also offer a $250 tool allowance to new employees.” If tools become damaged or broken, technicians are required to replace them, or else their wage and classification may be adjusted.

New to the Field

For technicians right out of trade school, it can cost several thousand dollars to purchase the necessary tools for the job. Even so, most technicians come to work with the tools that Gallet requires for employment. “I have a list of tools that I give to new employees, showing what I want them to have. With our personal tool accounts, they can charge the tools if needed, and I will generally let them use this account after their first week at work.”

Schneider noted that new hires typically don’t have all the tools they need, but since they usually start out doing system tune-ups, their $250 new employee allowance is sufficient for what they need to do that job. If other tools are needed beyond that amount, the company may provide a loan to cover the cost of the new tools.

While Atchley can’t remember the last time a new employee was hired who didn’t already have a set of basic hand tools, he noted that this was one of the other reasons why the company’s tool policy had to change. “Many of the new hires had nicer tools than what we were about to provide them with, and they didn’t want to use our tools.”

The new tool policy at Atchley Air now states that if technicians do not have the required tools for the job, the company will provide them with a set. In return, instead of receiving the $50 monthly allowance, they will receive $12.50/month for the first year of employment. For years two and three, they will receive $25/month, and in year four, they will receive $37.50/month. In year five, they will receive $50/month, become fully vested in the tools provided, and the tools are theirs to keep. If technicians leave before completing four full years of employment, the company will retain ownership of the tools that were provided.

Many technicians entering the field have the tools they need to start working right away, thanks to the trade schools they attend. For example, at Lincoln Technical Institute, which has campuses around the country, students in the HVAC program receive an entry- level customized tool kit that is included in the tuition (see sidebar).

“Contractors who hire our graduates understand that students are equipped with basic hand tools,” said Luis Vendrell, HVACR education supervisor, Lincoln Technical Institute. “After being hired, our students usually train for three to six months with an experienced technician; therefore, certain tools are not needed because they will be riding with someone who has those specialized tools. After their initial training, the new technician is expected to have additional hand tools, including drills, pipe wrenches, etc.”

Contractors know that entry-level technicians are just starting out in their new careers and obtaining all of the essential tools at once is very difficult in today’s economy, added Vendrell. “As long as the technician has some basic hand tools, most contractors will work with them to obtain the needed tools for the job. Overall, I think contractors have fair policies in place for helping their new hires acquire the specialty tools they need to do their jobs.”

Atchley believes his new tool policy is fair, and it seems to be working. An added benefit is that using the tool allowance method has resulted in a 37 percent drop in actual out-of-pocket tool expenses over the course of the year. “Our reason for changing the policy wasn’t to save money, but it has certainly been a nice bonus. What makes us the happiest is that we’re not having to deal with any complaints over who has the nicest tools or what brand of power drill we are providing. If technicians don’t like their power drill, and they have the money in their tool allowance account, they can go buy a new one.”

The current tool policy at Envirotech is also working well, said Gallet, however, more changes may be coming, as the company plans to implement mobile technology later this year. “We will need to address who will purchase the tablet PCs that we will be using in the trucks for dispatching and invoicing. I am considering having the technicians pay for half and the company pay for the other half, because in my opinion, if technicians own at least part of a tool, they are likely to take better care of it.”

Businesses change continually, which is why it is a good idea for contractors to regularly examine their rules for tools. The result just may be a revised rule that not only makes technicians happy but saves the company money.

Sidebar: Students Get a Head Start

Students in the HVAC program at Lincoln Technical Institute receive an entry-level customized tool kit that is included in the tuition. In addition, a partnership with Johnstone Supply provides opportunities for students to obtain some of the more specialized tools in the industry at discounted pricing. The customized tool kit, which is assembled and distributed by Tech Source Tools, consists of the following:

• 18-inch tool bag with embroidered Lincoln Tech logo

• Multimeter digital clamp-on with temperature

• Low loss fitting (straight)

• 6-in-1 screwdriver

• Mini screwdriver (reversible with valve rem.)

• Low loss fitting (90 degree)

• Torpedo level (9-inch magnetic)

• 9 1/2-inch groove lock pliers

• 7-inch diagonal pliers

• 6 1/2-inch long nose pliers

• 7-inch linesman pliers

• Flaring/swaging set

• Clamp-type temperature probe (K type)

• Folding hex key set, 3/16 inch and up

• Mini tubing cutter

• Wire stripper, cutter, crimper

• Tubing cutter (large to 1 1/8 inch)

• 25-foot by 1-inch tape measure with fractions on blade

• 8-inch adjustable wrench

• Inspection mirror (stainless, large)

• R-410A/R-22/R-404A manifold set with 5-foot hoses

• Service wrench

• 1/4- and 5/16-inch nut drivers (long/magnetic)

• LED flashlight with pouch

• Safety goggles

• 10-inch adjustable wrench

• Safety glasses

• Pressure/temperature chart

Publication date: 02/20/2012