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Do You Bill Your Guys At The Same Rate?

 
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Old 01-23-2011, 04:20 PM   #1
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Do You Bill Your Guys At The Same Rate?


Do you bill out for your guys (say on a time and material job or change order) at the same rate no matter which guy does the work or what their task is?

For example: If your $12/hr guy is painting baseboard or your $30/hr guy is coping crown does the customer get billed for the same hourly rate?
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Old 01-23-2011, 04:29 PM   #2
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Re: Do You Bill Your Guys At The Same Rate?


No. I break it down in my contract by trade for extras.

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Old 01-23-2011, 04:53 PM   #3
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Re: Do You Bill Your Guys At The Same Rate?


Different trades yes...but I mean your own employees. Do you break that down according to task?
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Old 01-23-2011, 05:02 PM   #4
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Re: Do You Bill Your Guys At The Same Rate?


Can't charge more for painting just because your lead guy is doing the work. You should have a set hourly rate for painting that you charge the customer. Is that what you're asking?
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Old 01-23-2011, 05:07 PM   #5
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Re: Do You Bill Your Guys At The Same Rate?


I will and have billed myself and my partner differently. I have billed my partner (he is an electrician by trade) at $45/hr. and also billed him at $35/hr to paint all on the same job. Usually my employees are billed the same no matter what they are actually doing because they are mostly laborers or helpers to me and my partner.
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Old 01-23-2011, 05:34 PM   #6
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Re: Do You Bill Your Guys At The Same Rate?


When times were better and their were more employees at a previous company I worked for, everyone had a "burden" rate to the company. The employees were broken down by Construction manager, Lead Carpenter, Junior Carpenter, and Laborer. Just because a guy made $25hr wasn't the burden. (ie) It was more like 38.50hr with all of the "burden". Payroll, insurance and so on.

The cheapest guy always got sent to do the cheapest and simplest tasks. The Leads did not sweep. There was a hierarchy. This was all under the guise of carpentry though. Anything else was a subcontractor with a fixed bid cost.

I don't know how you could run a legitimate business with say 8-12 employees any other way.

These days when I'm working for myself, I suck it up and do whatever it takes to get the job done. Sometimes for less than I'd like.
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Old 01-23-2011, 05:56 PM   #7
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Re: Do You Bill Your Guys At The Same Rate?


I bill at different rates but I break it down into two categories; skilled and un-skilled.
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Old 01-23-2011, 06:03 PM   #8
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Re: Do You Bill Your Guys At The Same Rate?


When I was working as a lead carpenter for a large commercial outfit, they billed out at the same horly rate for every one. When I was promoted to foreman I was being billed out at the same rate as the laborer working for me. I guess it all evened out.

Now my dad and I have our own general contracting company we have painters on staff. Last year we had 4 painters, 2 which have for my dad for a long time and two younger, less experienced painters. We billed them out at the same hourly rate. If all of the skilled painting was done on a project, (cabinets, doors, trim, faux), I moved atleast one if not both more expensive guys to the next project. The less experienced guys don't need a lot of supervision so that is not an issue, and I don't want to pay 18 an hour for rolling walls, when a 14 dollar an hour can do just as good a job. Most guys get complacent and don't want to make the effort to stay ahead of their guys like that, but it is worth the effort.

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Old 01-23-2011, 06:06 PM   #9
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Re: Do You Bill Your Guys At The Same Rate?


I will try to be a bit more specific...

Do you bill at different hourly rates for your employees?

I do not bill different rates but am considering doing this as some things are worth more money... Coping crown is worth more than pushing a broom...but both are essential to a project. With this model I make more money from the broom pusher than the crown coper but in the end it averages out.

The two models for a two man crew are this...

1) Two guys do a job. A lead guy billed at $60/hr and an apprentice billed at $30/hr. Total is $90/hr

2) Two guys do a job. A lead guy billed at $45/hr and an apprentice billed at $45/hr. Total is $90/hr

I belong in scenario number 2. Seems to work fine...we make sure the "low man" is doing the "low man" things and the high man the high man stuff. I've never had a complaint...but wonder about other experiences.
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Old 01-23-2011, 06:12 PM   #10
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Re: Do You Bill Your Guys At The Same Rate?


No, I dont. I charge out the helper at the same rate I charge out the Jorneyman. It works out the same in the end anyways. Your example is perfect.
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Old 01-23-2011, 06:33 PM   #11
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Re: Do You Bill Your Guys At The Same Rate?


I have three rates

1. Laborer/unskilled
2. Second carpenter
3. Lead carpenter
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Old 01-23-2011, 06:40 PM   #12
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Re: Do You Bill Your Guys At The Same Rate?


The problem comes in when I, for example, have a job come in that requires only a lead carpenter. An example would be:

A homeowner we did a kitchen remodel for wants a custom mantle and built ins. This is more or less a one man job where a helper would spend much of his time standing around.

If I keep the same "averaged" rate in place for this guy on this project I make almost nada. Seems to me there is room for a change in my business model that allows me to charge more per hour in cases like this.
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Old 01-23-2011, 07:07 PM   #13
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Re: Do You Bill Your Guys At The Same Rate?


Quote:
Originally Posted by atrawlings View Post
I will try to be a bit more specific...

Do you bill at different hourly rates for your employees?

I do not bill different rates but am considering doing this as some things are worth more money... Coping crown is worth more than pushing a broom...but both are essential to a project. With this model I make more money from the broom pusher than the crown coper but in the end it averages out.

The two models for a two man crew are this...

1) Two guys do a job. A lead guy billed at $60/hr and an apprentice billed at $30/hr. Total is $90/hr

2) Two guys do a job. A lead guy billed at $45/hr and an apprentice billed at $45/hr. Total is $90/hr

I belong in scenario number 2. Seems to work fine...we make sure the "low man" is doing the "low man" things and the high man the high man stuff. I've never had a complaint...but wonder about other experiences.
If I were the customer I'd be asking why am I paying the same rate for a helper that I am for a skilled tradesman?

I bill at different rates. One for helper/labourer, and one rate for skilled.
Scenario #1
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Old 01-23-2011, 07:20 PM   #14
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Re: Do You Bill Your Guys At The Same Rate?


So let me ask you then Katoman...

When you estimate a project, do you figure out your labor costs based on how many hours of lead carpenter work is involved and how much for lesser skilled work? Or is it straight man hours.

Where is the dividing line? What about a $16/hr guy? Someone who has good skill but would be lost if left alone for too long? Is there a sliding scale for a workers experience or must you put ALL workers into two categories/labor rates?
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Old 01-23-2011, 07:29 PM   #15
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Re: Do You Bill Your Guys At The Same Rate?


If the man has skills, perhaps he's not a full fledged carpenter yet, then he gets billed at the higher rate.

Only labourers get billed at the lower rate.

If I am estimating a job, all men are on that job. I only do one job at a time. So for me it's easy. How much a day are x number of men costing me.

I do a lot of cost plus work, so it's necessary to have two rates. Like I said, the HO will not like being charged the same for a labourer as a carpenter.
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Old 01-23-2011, 07:45 PM   #16
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Re: Do You Bill Your Guys At The Same Rate?


How come jobs aren't billed out by job?
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Old 01-23-2011, 08:50 PM   #17
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Re: Do You Bill Your Guys At The Same Rate?


T and m is billed out at $65 an hour for journeyman and apprentices. The journeymans job is to keep his apprentice on task producing the same quantity of production. It's not the superintendants business who has there card and who doesn't just so long as the amount of work produced reflects the hours billed.
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Old 01-23-2011, 09:37 PM   #18
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Re: Do You Bill Your Guys At The Same Rate?


Quote:
Originally Posted by atrawlings View Post
I will try to be a bit more specific...

Do you bill at different hourly rates for your employees?

I do not bill different rates but am considering doing this as some things are worth more money... Coping crown is worth more than pushing a broom...but both are essential to a project. With this model I make more money from the broom pusher than the crown coper but in the end it averages out.

The two models for a two man crew are this...

1) Two guys do a job. A lead guy billed at $60/hr and an apprentice billed at $30/hr. Total is $90/hr

2) Two guys do a job. A lead guy billed at $45/hr and an apprentice billed at $45/hr. Total is $90/hr

I belong in scenario number 2. Seems to work fine...we make sure the "low man" is doing the "low man" things and the high man the high man stuff. I've never had a complaint...but wonder about other experiences.

That only works if they never work alone.
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Old 01-23-2011, 09:42 PM   #19
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Re: Do You Bill Your Guys At The Same Rate?


I bill
1- Lead and tools
2-carpenters
3-laborers
Nobody wants to see a t&m bill for total hours and all the hours are charged at the same rate. My time card make the guys break down what they did and where they are doing it at. Gives me a real good idea exactly how to bid jobs and Ive never had a complaint of over charging.
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Old 01-23-2011, 09:51 PM   #20
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Re: Do You Bill Your Guys At The Same Rate?


Four rates used to bid jobs:

Lead/Foreman
Journeymen
Apprentices
Laborers

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