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I've been wondering, how much would or do you guys pay a top-notch hand? $25/hr. Or more or less. Of course I understand location plays a big part in this question. Just curious. Thanks in advance.
 

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Just curious what a "top notch hand" means? Is this an actual lead or perhaps the best of the crew just below a lead ?

A little light for the former, but certainly not out of the ball park for the latter.

There are so many variables as to how one can balance what $$ a crew can generate. When a worker has to do the work they have the skill to do as well as the grunt work they are way over qualified to do, the equation will produce a different result......

IOW, having a $25/hr worker perform menial labor tasks because there aren't laborers to do the tasks, diminishes the overall return and makes it harder (from a production standpoint) to maintain the higher rate of pay.
 

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Are you talking a skilled worker or a foreman?
 

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I pay up to half of the money they generate.
Looking to learn.

The general rule I hear is that an employee costs 2x what their actual labor rate is that you pay them, realistically a little under 2x.

Are you saying that if you could bill a guy out at $50/hr. You would pay him a maximum of $25? Sounds reasonable. Just wanted to know if that is what you're saying?
 

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Looking to learn.

The general rule I hear is that an employee costs 2x what their actual labor rate is that you pay them, realistically a little under 2x.

Are you saying that if you could bill a guy out at $50/hr. You would pay him a maximum of $25? Sounds reasonable. Just wanted to know if that is what you're saying?
A typical employee here does not cost 2x his hourly rate. On average, I would say my cost per employee is closer to 1.3x.
 

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Good to know. Would that pretty much include taxes, workmans comp, and vacation? I assume no insurance?
No paid vacations here, and no insurance, although we do have it available through our PEO. In Ohio, WC rates can be reduced via group coverage. You have to be in business for a year before you become eligible though. My current rate is about 4.6 percent through the group. When first sarting out, my personal rate was 18.3 percent.

An employer is required to pay half of the FICA, which is 7.65 percent, Federal and State unemployment (about 7 percent of the first 9k of income), and WC. You must also take into account all of the other company costs and allocate them into the hourly rate that you charge.
 

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Someone who can hold a decent conversation without sounding like one of the 3 stooges, no drama and shows up everyday is almost as important as the work he does. for me anyways.
 

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No paid vacations here, and no insurance, although we do have it available through our PEO. In Ohio, WC rates can be reduced via group coverage. You have to be in business for a year before you become eligible though. My current rate is about 4.6 percent through the group. When first sarting out, my personal rate was 18.3 percent.

An employer is required to pay half of the FICA, which is 7.65 percent, Federal and State unemployment (about 7 percent of the first 9k of income), and WC. You must also take into account all of the other company costs and allocate them into the hourly rate that you charge.
This is a good list, once you add on some overhead like payroll expenses etc youre at the 1.3 pretty quick.

The main cost Ive been sensitive about is training. Theres no number to be put on it really. But it has real costs on productivity. If you have a really steady revenue stream then great, the training costs are negligible, but if work is more spotty then you have higher turnover and significantly more time talking and less time working.

What do you do with your labor in the winter? Gotta keep em fed.

My sales over the last three years have been pretty flat. But profit is up 30 percent and I work LESS. I dont have to take crap jobs to feed the crew. I dont have to find eight hours of work to do if I have six or four hour day. I dont have to drive people home. I dont have to reorganize at the end of every week. Tools dont get lost or broken. I dont have to buy anyone lunch because they forgot their wallet. I dont have to spend time on garnishments, unemployment claims etc...

I would love to have one full time employee but when I look at the cost benefit I would need to do another 50 or 75 floors a year to make another 30k and that to me would be an inordinate risk to reward ratio. Just not worth it.

I remember one guy who wanted to make fifty grand a year. I said no sweat you need to sand and finish or lay 60000 feet of flooring a year. We were laying a 400 square foot apartment, yhe look on his face...priceless.
 

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A typical employee here does not cost 2x his hourly rate. On average, I would say my cost per employee is closer to 1.3x.
One other point I was getting at that I never made, in a high turnover situation, assuming the 2x mulitplier on cost is a safe bet.

Case in point, I brought in some labor to tear up carpet last week. Paid him 12.50. Bought him lunch both days, gave him a ride day one, had to make a trip to cut him a check day two. He broke a fein sanding pad and put a nasty curve on one of my scrapers I had to fix.
 

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This sometimes depends on if the person is capable of going off on their own. 2X is pretty normal around here for small outfits.

OTOH, if you pay too low, you can get people thinking they'll make a ton more money if they just weasel in on your customers.
 

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Looking to learn.

The general rule I hear is that an employee costs 2x what their actual labor rate is that you pay them, realistically a little under 2x.

Are you saying that if you could bill a guy out at $50/hr. You would pay him a maximum of $25? Sounds reasonable. Just wanted to know if that is what you're saying?
I said as a general rule you have to bill employees out at 2x their nominal pay to be able to cover costs AND put a few bucks in your pocket.

Warren's 1.3x cost is pretty accurate, but the cost isn't linear so it's different for every pay scale as well as your WC rates. A roofer in a 20% bracket will have MUCH higher expenses than an electrician at 3.6%
 

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I said as a general rule you have to bill employees out at 2x their nominal pay to be able to cover costs AND put a few bucks in your pocket.



Warren's 1.3x cost is pretty accurate, but the cost isn't linear so it's different for every pay scale as well as your WC rates. A roofer in a 20% bracket will have MUCH higher expenses than an electrician at 3.6%

That makes sense. Thanks
 
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