Hey y’all,
What is a the ballpark mark-up on employees? I know it depends on cost of insurances and benefits, etc. but just give me an idea?
The reason I ask is because in my area a carpenter from a temp. labor agency cost $17/hr., necessary insurance included. I’m wondering how this compares to what I might charge a customer for a $10-$12/hr. carpenter of my own. I’ve never priced labor to a customer before except my own.
If I start a carpentry business I’d like to have 2-3 decent carpenters on my own payroll and maybe use temp. employees as laborers(cheaper than carpenters) to clean up etc. And maybe use temp. carpenters on big projects as plain old carpenters following my own guys. Plus I can leave them behind if I don’t need them and they can move on to the next project with someone else.
I would probably mark up the temp. employees a little too to cover my time cutting checks to the agency, etc.
Does this sound feasible or unreasonable?
Replies
My labor burden is 33%. So if I'm paying an employee $15.00 an hour, it is costing me an additional $5.00 an hour in payroll tax, unemployment tax, work comp, and liability insurance. This assumes the employee is a roofer.
But this is in Indiana. I'm guessing our work comp rates are nearly the lowest in the country.
So that's the first thing you have to know. My numbers are: payroll tax is 7.65%. The unemployment rate (at least in Indiana) is 3.5%. Work Comp (at least in Indiana) is 15.33% and the liability insurance (at least in Indiana) runs 6.84%.
Then you have to decide how you are covering your overhead and profit. But, presumably, that markup is the same whether you're using temp employees or your own. A lot of people add up the entire years worth of overhead and profit, divide it by the number of employee hours they expect to bill customers for, and add that amount to the labor plus labor burden total. And there you go.
And if it works out that simply for you, you are ahead of me.
Rich Beckman
Another day, another tool.
I'd like to have some decent carpenters for $12/hr too, but that'll never happen.
There is more cost to temps than you think. They require more of your supervision time. You can'tt be a carp, a super, and a customer smoozer all at the same time.
And your markup needs to cover you for the mistakes they will make and your own time for going back to do it over again, right.
No time now for me but you really need to peruse some of the old threads here in the business folder about markup etc.
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>If I start a carpentry business I'd like to have 2-3 decent carpenters on my own payroll
Starting a little big, aren't ya Scooter?
I've never had any luck with temp employees without heavy supervision, and little luck with $12 / hr employees without heavy supervision. I think your odds of being able to leave a crew behind and move on are....
...well I fired my last guy so I could quit cussing. Having someone responsible, dedicated, competent, who has tools and a vehicle, and works without supervision will set you back at least $17 in Indianapolis, if you can find them. If they're missing any of the above my guess is you won't be happy.
Good luck...
remodeler
I guess I need to move somewhere other than North Carolina because down here wages are apparently lower for good carpenters. When I was working as a carpenter about a year ago, I was all of those things(responsible, etc) and more, being responsible for other carpenters as well as a go between the boss and the crew. I was getting $15.50 an hour plus basic health insurance. And we build multi-million dollar custome homes. Maybe the insurance is the difference, virtually no builders offer insurance here. Just a regular carpenter with decent skills on the crew only makes between $11-$13 an hour.
I've used a couple of decent temp workers. I had to weed through a couple of poor ones to get to them but once I got to them, when I need them I request the good ones by name. Sometimes there people who recently re-located to the area and just needed a job quick to make some bank. I realize they would require supervision but if they were working along side of somebody on my crew mistakes could be kept to a minimum. And if I don't like them I can send them home without a care.
I don't know if I will use this approach in the future but its something I've considered to fill in the gaps on a big project or when good bodies are scarce, which they can sometimes be around here.
That, and I know the good employers out there with a conscience hate the idea of having to lay their own people off if things get slow for a spell or whatever. With temp. employees, hey Hakuna Matata right?
Oh yeah, If I want to take a 2 week vacation with my family between jobs. I may not have to worry about keeping people who need the money busy.
They may say that I'm a dreamer, but I 'm not the only one! -- John Lennon
I hate to say it,but... This is the reason I got out of the business. My last job paid $15.00/hr. No benefits. This was a large, well established, high end remodel contractor. I provided ALL my own tools, truck and 27 years experience. Showed up clean, sober and professional every day. Worked alone or supervised a small crew. Did everything from trimout to tile and brick work. 40 hours a week. $600 bucks! Hell, I made $15.50/hr in 1985 as a union foreman. Why haven't wages risen AT ALL?
I now work in a Goodyear plant. Make $23.00/hr and unlimited overtime. 100% benefits. $1600/week. Sure miss swinging a hammer though.
Mark
"Why haven't wages risen AT ALL?"
Potwin,
Maybe you've been working for the wrong people? In the beginning of my working career, I worked for people who always bid low, paid low, and promised someday I'd make more. If you truly have talent, look to work for a firm that takes on only premo work, and pays accordingly, assuming you live in an area with a demand for that.
Jon