Cant keep em

Jonathan Ellis

Jonathan Ellis

moderator
I have a huge problem with employees, I can not keep them for anything. Hours are limited, I do the majority of the work myself. I just picked up another contract and I have one pending and another that I am working on. Needless to say, I will have a lot of work. For newbees I start them out at $10 per hour. I do not offer any incentives (insurances, retirement, and so forth and so on). The reason I do not offer this is they are working limited hours. A full time person I would offer all of this. I like to show appreciation to employees, pay for snacks, dinner, etc. I took one of my guys to six flags last week and paid for half of everything just to say thanks. This guy was a hard wroker as was my other guy. The only cleaning they could do for me now is the inside of the jail house.
I continually told myself that I could not keep people due to the lack of hours, but I cant even keep someone on that wants to do it part time after their full time gig. I can not tell myself that anymore, there has got to be something that I am not seeing from where I am. Has anyone else ran into this problem and if so what did you do about it.
I have a guy that I am working on putting on full time. He is asking for $30,000 per year. I am trying to have this at my desired laber % rate before I bring him on.
What are the labor % rates that are being ran in other companies?
 
That is something I have struggle with over the years. I can't put an employee on full time until I acquire enough accounts, they can't live off part time wages. When they quit my name and accounts are in jeopardy because it is too much work for one guy. Rock and a hard place sometimes.
As for a %, I would need to see an extra income of around 150-200% of the employees wage to make it worthwhile with all of the overhead.
 
seems low

you say 150%-200% that is a labor rate of 1%/ That is impossible. If it is not, please tell me how to do it. Talk about huge profit... I look at about 15%. I am doing enough to put this guy on full time, it is just the fact of the matter that my accounts pay at different times and I do not want to risk giving him a check that would not clear.
I do however have the ability to get instant cash for my invoices overnite. I would receive payment before the invoice even reaches corporate. This costs me about 3%-5% depending on the amount. It is a great advantage, I just dont want to give up the 3-5 unless I have to.
 
What I meant by 150-%200% is, that in order to pay my employee, maintain equipment and potential (likely) breakdowns, and pay all other cost like insurance workmans comp etc... and still make a large enough profit to be worth the risk, the employee would have to generate that percentage of income. By this I mean if I pay him $20/ hour he needs to be generating $30-$40/hour in gross income to make it worthwhile and profitable for me.
With the $30,000/ year ($14.42/hour) I would need to average $22-$28/hour to justify him. That doesn't change too much unless he is working with me and then my equipment costs and repairs would be lower because I can see how he treats it.


You mention in another thread that you were thinking of 2 rigs. Check into the extra insurance cost and the risks of an employee driving one of your work trucks thouroughly before you take the step.

I hope that makes more sense.
 
Curious....

"I do however have the ability to get instant cash for my invoices overnite. I would receive payment before the invoice even reaches corporate. This costs me about 3%-5% depending on the amount."

Interesting. Mind if I ask how you can do that? Is that something worked out with your account or are you going to another source? That could come in handy at times. If you don't want to answer that on here, you can email me if you like. Thanks for the info.
 
I figure wages at 25% of gross. Any less than that and it is not worth the hassle factor. As for keeping employees, What Ron said. If they stay with me 3 months, they are usually mine as long as I want them.

Scott Stone
 
In the last ten years our payroll expenses including wages, all taxes, work comp, health insurance, etc., was just under 40% of gross!

Dave Olson
 
Are you includeing the Wages you pay yourself or is that just the labor staff ?
 
I just reviewed a job proposal that I submitted last week. As a percent of gross revenue labor for that project comes in at 24%.

I figure work based on my best estimate of what it will take to complete. I calculate labor at cost plus 25% for taxes, insurance, etc. The rest of the expenses are again based on what I expect to spend for each item and then mark everything up for overhead expenses and some profit.

Today I have a four man crew out doing a few small fleets. I just ran the numbers and labor cost today will be about 35%, last weekend the same crew cost about 23% of revenue doing larger fleets!

The almost 40% number is for 10 years! I keep some guys on the payroll regardless of the workload. I use them on projects around the shop and government work! :)

For health reasons, I cannot work on some projects, so I'm paying for help in some cases to replace me! In these cases my wages become part of overhead.

Dave Olson
 
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