Would you prefer an employee with 2 years experience at $14.00 an hour or
an employee with 7 years experience at $21.00 an hour.
I see the benefit of more experience but the amount of work each can produce is relatively close.
At the end of the day is less experience worth the savings in pay to get close to the same amount of work performed?
(Based on hourly pay not commission)
If this is true: “the amount of work each can produce is relatively close”, and all other things being equal (friendliness, quality of workmanship, reliability, etc), then it’s a toss-up : Same thing either way…
[INDENT][I]Example:
[B]$14/hr guy[/B] does 13 houses at $200 each during 40-hr week.
You invoice $2,600, and pay him $560 = [B]you keep $2,040.00[/B]
[B]$21/hr guy[/B] does 15 houses at $200 each during 40-hr week.
You invoice $3,000, and pay him $840 [B]= you keep $2,160.00[/B][/I][/INDENT]
Of course, I made up these numbers, you’ll have to insert your own to figure it out if it would be better either way.
I’ve found that “practical initiative” is worth far more than experience. Some workers see an obstacle, and decide “oh well, I might as well quit for the day and ask Kevin tonight after work what I should do about it…” - STUPID, and very frustrating.
Whereas a different, more practical worker may think : “Hmmm - I’m gonna try and find a way around this, before I call it a day - this might just work…”.
Sometimes it’s the experienced guy that has this initiative, sometimes it’s not. Depends on your guys. I would pay more for this trait, for sure, especially for Residential, since there are more unique challenges, every house being different…
And, there are many variables besides efficiency that provide value to an employee (i.e. attitude, professionalism, health, punctuality, etc.)
Paneless put this into a good perspective. I pay strictly commission due to this very reason. You are paid great for the experience and what you get accomplished. When I was paying hourly, I saw this same dilemma that you are describing. Some people are really go getters and some just do the basics. A basic straight clean can be done with a veteran and a newbie (6 months experience) in about the same time. Its the jobs that you dont do very often that will throw the new guy for a loop. I am still running into new situations on the job that takes a little troubleshooting to get done.
Steve
Always find this interesting although…the gross of the “employee” is one thing lets not forget work comp & taxes
So the same guy @ 14.00x40=560.00 would be costing me 754.48 total profit would be 1845.52 now thats at 34.73%
Even get whacked harder on higher paid employee’s 21.00 an hr @40=840.00x 34.73%= 291.73 bringing the total cost of that employee to 1,131.73 leaving a profit of only 1,868.27 as opposed to 2,160.00
total off my end 486.21 so…the picture isn’t as rosy as one may think when you consider all things involved.
Craig,
There are different scenarios for different companies. Some payroll services charge an arm and a leg to submit your withholding- some are reasonable. Same with accountants. Some are more expensive, some are reasonably expensive:D. My company is in a group rating for Workers Comp which saves me 80%. Thats a true 80% off of my bill every 6 months. It was 90% off last year. I know in CA. that they have different ways. We talked about the PEO program a ways back. It is basically a program that an outside firm handles your employees for you- Basically your employees are truly their employees leased to you. They handle all of the employee stuff for you if Im not mistaken? You said that it was expensive. I match taxes, pay a payroll service, Workers comp, etc. I have went back and forth with hourly guys. It drives me crazy how much they milk the clock! As I have said before. I have more money in my account than ever before. Drive time, sand baggers, milking the clock. It eats away at your profit right there under your nose.
Steve
TRUTH!!!
So what do you pay as a commission? What percentage? Sometimes I do large jobs and they require two to three people if they are gonna be done in one day. Do you take a percentage and split two to three ways? What about the crew leader who has more experience?
I have fought with this idea in my head put have never really come up with any solid numbers. I wanna keep my employee cost near 30%. Is that possible with this technique?
Just a wunderin’
I can appreciate your input Steve,i always do.Now if you are indeed matching taxes work comp & a payroll service you must be getting a SMOKIN deal.
I myself still think if…you were in Calif you’d be changing your tune real quick!
I pay on a hourly scale. The reason being lots of jobs are not just windows and bring $200 to $300 for an hour. Things I look for in a good employee are loyalty, trustworthiness, improvisation, attention to detail. Those things to me are worth more than skill.
I pay a training wage to start, once they learn and are ready to start on their own $15 an hour, after 3 months, medical. Each month their wage is looked at for an increase if they can earn more per day.
When I hire, I have already done the job description and I pay accordingly. If I need a route guy to take care of store fronts, etc., That pays differently than a project guy.
I know route guys that do no ladder work, no resi work and no rope work. They barely do pole work. I am not going to pay this guy 21 bucks an hour with 2 years or 10 years experience.
I have project guys that do the 2, 3, and 4 time/year work, clean-ups and 1-time or special cleans. I pay these people based on what they do. They climb/move up to 6 sets, 40 ft ladders, ropes, stages and anything else that needs to be done. These guys I pay base salaries and commissions.
I have 2 guys for project work that work for other companies. They are retired military and don’t want full time 40hr/week jobs…they fish…so they do piece work for several of us. This can be a dangerous thing, but these guys don’t talk about the work. They don’t tell others what I am doing and won’t tell me what others are doing. Our market is small enough that we know our competitors and what work they have
I love that comment Craig, these mid-west boys have no idea what you are talking about
Well Brotherman some do and others may not,either way its the truth(at least out here) you being from out here know exactly what i mean.
So many variables…but work comp & taxes alone are a KILLER as for whether or not comm/piece vs hourly is good they both have there place.Unfortunately you being from out here you know damn well we could not pay(low comm/piece) what some of our fellow WC 'ers in the mid west or other area’s pay comm/piece and expect to keep them very long…just aint happening not someone worth there salt!
It’s all in the numbers,you have to find that happy medium and keep the business solvent with profit. Because if your not making profit your not in business;)
I know what you mean Craig,
btw, what happened to your music on your website, I loved hearing that song on your home page/Index page???
The website seemed to be working fine with “Fire fox”
No Sound on my end with FireFox
What percentage do you pay your commission only people? Do they acquire the lead, bid the job, do the job and make X%?
