Employees Are To Expensive

Thewoodman

Is it just me or has it gotten to the point where it is too costly to have employees in the construction field anymore? If the new government wanted to really fix things they should actually make it enticing for us business owners to hire people.

Just my two cents worth. (before taxes thus leaving 1/2 a cent)

Mark

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Framer53

Pass the costs along to your customer and stop worrying about it.
In order for a business to grow and become more productive you need the employee!

Mellison

The real problem is that you may be bidding against guys who are cutting corners in regards to their employees pay.
Off the books = No workers comp, no FICA contributions and less general liability Ins.
It is expensive but when every employer plays by the books it levels the field and then the cost is easily covered by the customer.

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TxElectrician

I cannot afford to not have employees.

adwilk

Its not a tough subject. Just as the cost of materials, gas, insurance, and EVERYTHING else goes up, so does the labor force. I once shared your thoughts about paying too much. Work on how you sell your services. If the playing field isn't "level", be sure that the customer knows that and why. Explain that you pay more for labor because you have the best guys working for you. Get the customer off the price and you'll be fine.

willworkforbeer

I'm getting there for a different reason, I aint what I used to be, sciatica attack right now

XanadooLTD

sub it out. less problems.

orson

Case and point.

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ottagosoon

Sure that's the way to go. I use a lot of subs. AK "One Man Show" But for me to get out of the truck and do just managing, I will need some employees.

The problem is it takes a nice nest egg to keep from worrying about the payroll every week. I have a lot of subs, and for some reason more so then before, calling a asking if they can get some money before its due date.

Also when things slow down employees can eat up a lot of money quickly and I have been there.

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joasis

The basic problem is the the cost vs. what you must charge. It is easy to say hire the guys, pass the costs along. The problem we have seen since the economic slowdown is the number of contractors who low ball, and they don't have liability, worker's comp, bonded, or play by any rules.

When it was no longer profitable for me to keep two crews running, I backed off totally. Now it is my son, self employed, and me, self employed. We use temps from an agency for labor when we must, and I sub out everything I don't want to do, or have the manpower to do.

My contracting has picked up since I have quit trying to do everything on a job site.....that is what being a GC is all about anyway.

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orson

I'm not saying there is anything wrong with subbing work out.

If you have enough work that you need a reliable guy 36 or 40 hours a week to work on your jobs and you sub him instead of hiring him this is clearly wrong.

Just because something is commonly done does not make it right.

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72chevy4x4

for those who cry out to sub something out, are you getting more or less from subbing as compared to if you had an employee?

joasis

I call out a framer with 8 guys working, tools, equipment, insurance.

I had 2 guys on a crew. I pay all the bills and make 10% either case. Do the math.

There is nothing wrong with hiring qualified guys instead of crewing the job yourself. There is nothing wrong with hiring guys and doing it all.....but we are in business to make money. I looked at my bottom line and the decision was easy.

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Leon Wood

josis, we've just given up on in house labor because of the cost factor to us also.It is a "no brainer" when you need immediate help on a job, such as someone being on hand for an inspection, but we've adjusted and it works well. The " new changes " implemented by the president is going to come back to bite us all in the but, because no one wants to take on anymore liability and taxes in this business, just PASS IT ON .

coveinspiration

I think employees are a good deal when you build up a solid rep and can charge your guys out for a pretty penny. Otherwise subs are the best bet in my opinion.

RumseySupply

Go with subs when you can, a strong FFP contract with, minimal mark up for you can, keep you in the black and reduce your stress for the dollars. I am able to keep my mark up really low, around 2% or 3%, when I need help with paper or phone work I use a sub and only pay for accomplished work (completed order/sales) , no "standing army" on the books.

Magnettica

People in government who do that are normally referred to as conservatives.

Register to vote and do it accordingly.

God Bless America.

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LMack

I am a drywall subcontractor and at one time I used subs extensively for just about everything, but in the last few years I have grown to loathe them. Regardless of how much time I spend vetting them to verify qualifications I cannot seem to find any that want to work. They all show up to the office when they want money, but getting them to properly man projects or supervise their own people is like pulling teeth. I had one sub whom I found out he was falsifying payroll applications and was ripping off the people who worked for him. I found this out when ten guys showed up at my office demanding money because he had not paid them and had told them it was because I had not paid him. Fortunately for me I have a clause in my contracts to cover this very thing. I was able to negotiate a buyout with each of them and used the remainder of his payroll monies owed to him (plus another $2,000 from my budget) to settle with all of them and get them to individually sign documentation stating they were paid to date for the project. Once they knew the truth they all quit working for him. I then formally tossed him from the project.

My boss still thinks subs are the answer to everything and bluntly refuses to let me hire anyone, so I have begun to "be too busy" to make it to the field so he has to deal with them. Lots less stress on me and he is at least entertaining the idea of hiring a regular crew now.

Carport King

Man this is a great topic. We have done both in the past and we like the employee way better.

But, when we started to lose work because of pricing we went another route.

We started another company that only deals with commerical and builders and we only use subs there. This way we can be competitive and still make our number.

Also most of these type of builders are use to having subs on the job site.

We have about 80 employees with our other company and we mostly do retail only work.

This has worked for us and has kept us busy even in this economy.

rickmccarthy

Wow I can really appreciate this topic. When I had my residential new construction business I had the same issue. There are so many people willing to do the work for pennies on the dollar that it makes it nearly immpossible to get the job and turn a profit. When I was to busy to handle it myself I did hire some ind for piece work they carry own insurance and I got the work done but didnt really make enough to make it worth my time.

I believe that you have to change your entire outlook on how you run your business to grow with employees. when you bid a job your customer will have to understand that you are a legit company with lots of overhead like insurance and employee benefits. and to hire a professional costs more than joe contractor that has a F150 and a hammer. You will probably not get every job if you bid this way but you will get the higher quality work that actually pays you what you are worth.

If you start paying yourself a reasonable salary retirement plan benefits remember you need a couple weeks paid vacation. As well as putting money back for tool replacement and vehicle repair. I believe if you start bidding with these costs incorporated you may not get as much work at first but you would not need employees right away either and you would have less stress. When you do get busy enough for employees you will have already incorporated the costs in job for them

Just My two cents best of luck