Q For Employers About Billable Hours...

orson

For those of you who are employers as well as those of you who are employees and privy to this data:

1. On average, what percentage of the hours your employees work ends up being "billable", or a COG, versus hours that you end up rolling into overhead?

Edit: this question is in reference to workers in the field, exludes office personell etc.

2.What multiplier would you plug into this formula: (Hourly wage) x (multiplier for all labor burden)= (hourly cost)
--please indicate if your multiplier accounts for anything beyond standard insurances and benefits(WC, Vaca, Health,FICA)--

I made up this calculator, does it seem accurate to you?(input items in green)

Attached Files

Employee Cost worksheet.xls (19.0 KB, 33 views)

__________________
Lancaster Remodeling Contractor - Lancaster Remodeling
Kitchen & Bath Remodeling PA- Bathroom Remodeling Lancaster PA
Custom Kitchen Remodeling PA - Ruby Construction FaceBook-Lancaster Bathroom Remodeling

Chris Johnson

Guys in the field I figure I get about 70-75% value out of them. Basically if you take into account and actually watch them production is good and meaningful for 6 out of 8 hours. Breaks lag a little here and there along with lunches, guys wondering looking for items even though they are right there in front of them, if a guys been moving block and bar consistantly they slow after a run to catch their breath, etc.

All in all I'm not going to complain, nobody is a machine and work consistantly fast all day. Once you know your crews habits and are satisfied with the end result you can schedule the proper time for a project based on past performance.

I have been known to be dissatisfied with the days results and had everyone work later to get us where we should be. But because of this I try not to be off site for more then a few hours if I have to leave.

__________________
Chris

Jason Whipple

I put all that in my billable hourly rate under class of help. I would never try to figure out and bill for each individuals time.

Forman $***x
Carpenter $***x
Helper/Laborer $***x

I have my top and bottom figured out for each pay scale and set my overhead base on the top figure. If I can do better, good for me.

__________________
Jason E Whipple, General Manager
Historic House Restoration, Cincinnati, Ohio
Facebook | Twitter

nap

their hours are 100% billable. It costs you 100% of their labor costs for every hour they are at work. What you need to be doing is reflect the hours you deem as required for any given job. If you a slow crew, you need to adjust your bidding to reflect that and if you have a fast crew, you can adjust to reflect that BUT don't cut your throat as this is where you can gain profit or build a buffer for bad days.

There should be no hours not billable unless they are actually doing something for the shop and not the job.

Once you have a $/manhour figure and the number of hours you are placing for the required work, then you add office overhead and profit, eqipment costs, and material (including whatever mark up you add)

I don't quite see where you would put any of their hours in anything other than labor costs. That is what they are. Anything else is simply juggling the numbers to fit where you want them to.


Anything less than that gives you a false sense of cost of a job

orson

To clarify:

My question doesn't have anything to do with individual efficiency, crew efficiency or an employee or crew taking more time to accomplish a task that what was estimated for a job.

What I am asking is: How many hours a week on average does an employee end up doing things that cannot be assigned to a job, things like washing their truck or organizing the warehouse, driving that's not accounted for, etc. I know that ideally 100% of their time would be attributable to COGs on specific jobs, but does this wash out in reality? Who shovels the walks at the showroom? Washes and organizes the trucks? Maintains tools? Cleans up the warehouse? [Insert annoying little task here]?

__________________
Lancaster Remodeling Contractor - Lancaster Remodeling
Kitchen & Bath Remodeling PA- Bathroom Remodeling Lancaster PA
Custom Kitchen Remodeling PA - Ruby Construction FaceBook-Lancaster Bathroom Remodeling

rbsremodeling

My driver does. He stocks the warehouse gets the vehicle tags and everything else that can't be classifed and he is considered an overhead expense to me because he is not directly assigned to a job, He roams from site to site, does deliveries, trash, operate equipment and all the bs stuff.

__________________

Mike Finley

I like the question. But it's a tough one because I assume everybody runs things differently. Right now for me non-billable hours are maybe 1/3rd of 1 percent at most. But that's because I do a lot of those non-billable hours type things now.

nap

That is up to you. 100% of his time is a cost to the job if he is working on, or for, the job. Driving is part of the cost to the job, unless he is driving to another job, then the driving is a cost to the other job.

Organizing his truck should be part of the job considering it got messed up for the job. Washing is a toss up. If you require it, it is part of the cost of labor to have him on a job. Many folks with a truck discover it is a bene to have a truck so the take iit upon themselves to wash their vehicles. If they don;t, it's part of the job unless you specifically want to break it out and put it elsewhere.

Having a shop hand is often a better alternative since it does not add to labor costs for a job without act acutally having the benefit of the work on the job. You are going to pay for it one way or another so use your cheapest guys to do it.

Shoveling the walk; now that is office overhead since it has nothing directly related to a specific job.

Tool maintainance; depends. If he is fixing tools from or for a specific job, then it is an actual cost of the job. If he is just in the shop fixing stuff, then while it could be split amongst all the jobs, it is easier to figure as a shop/office overhead.

organizing the warehouse; same as tool maintianance.

many of those items need to be looked at both ways. You may have tax benefits one way over the other.