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I’m currently “testing” the idea/usefulness of an employee…i’m running him thru a temp service, have been for just shy of a year…you’ll pay them a markup based on salarly or hourly rate, about 15-30 percent depending on the agency and benefits…the best part is, you are not his employer, the temp agency is, so you don’t have to worry about regulations, deposits, etc….and payment is net 30, so it helps in slower months….
my temp agency covers 2 mil in liability insurance, he has paid holidays (i.e. in a holiday week, I’m only billed 32 hours, they pay the other 8 hours). 2 weeks paid vacation per year (they pay it, not me!), and several other benefits. They also offer low-cost group health insurance if you or he wants to foot the tab.
and if you ever get sick of the help, or whatever, no firing to be done….not to worry about justifying termination, getting sued on down the road, etc….just let the temp agency know that he’s not going to work for you anymore….heck if it comes to sour grapes, you don’t even have to give 2 weeks notice…
Mr. Greenjeans
Service Foundation
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re: FredB
just want to make it clear...from reading your post, others may get the wrong spin....
I did not advocate going to a temp agency and asking for a helper....find the right person for you, then go to a temp agency (most now call themselves "staffing services"), and make your deal....
The temp's contract is with the agency....he is "assigned" to your company per your separate agreement with the agency... he is their employee, simply contracted out to you by them....if things don't work out....just tell them, and all is finished.
more better?
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Mr Greenjeans:
Yes I understood that. That is one way to "interview" a potential new employee, or to put someone on the job for a short term thing. Sometimes, not always, it is even cheaper. But in this employment at will society it can be even more flexible to hire someone directly. IF the temp agency is competent what it does is supply a known, qualified person for your job; saving you some interview time, maybe.
If I have spend the effort to do the interview and hook the person up with an agency I would just as soon hire the person directly as a temp/probationary person and save the hassle of the third party.
But, the fundamental arithmetic I mentioned in my first post doesn't change. Kim still has to make the key decision: "Am I going to make enough money off this new person to make the hire worthwhile?" Then he has the next decision: "Am I really cut out to be a supervisor and manager of people, and be happy doing it?" A "No" to either question means no need to find an employee.
By the way, I've used temps in other jobs but I don't think I know of any temp agencies that provide trade and crafts types. Which agency did you have in mind?
*I know that it varies widely with the individual hired, but I curious as to what you estimate the general range of increased output when going from a one person operation to a two person? I have not supervised anyone in carpentry or general construction, but when installing computer networks, I found that by adding another person, even one who was a good worker, the gain was by no means a doubling of output - I found the increased output may have been as low as only about half a person at times. This was because of the new demand on my time for supervising, planning, paperwork, discussions, coordination, etc. - time that I otherwise would have been building, configuring, and testing the networks. Thus I figured that I was often better off to work a 60 hour week solo than to work a 40 hour week with a helper. This is probably somewhat extreme as these were mostly college kids with not too much experience hired for relatively short periods of time. Would be interested in your experience as to gain from that first employee.
*Ah...just how much increased productivity and hopefully profit is there in hiring another employee?? That is a good question and one that I don't have a real good answer for. But I can tell you what my experience has been.The formula is: (Increased Income)-(Increased Costs)=(Increased Profit). We are going to hire additional people as long as IP is greater than or equal to zero.It is easy for Kim or anyone to get a close number on what the IC is. That is just a matter of adding up the payroll costs, any fringe benefits and putting in a fudge factor for your supervision time.It is also pretty easy to find out what the IC was on an after-the-fact basis if you have done similiar kinds of jobs before. What is more difficult is getting an estimating number up front; especially if this is your first go at hiring additional people.My experience is that if I'm doing something that is bulky, has lots of gofer type work, or has distances involved; like framing, running wires, laying out foundations, unloading material, etc an additional person triples productivity. On the other hand if I am doing a restricted access, technical job; like repairing a PV system, trimming out a house, making a custom cabinet, etc an additional person who must be supervised actually reduces productivity. But and additional fully qualified, independant working person doubles productivity.Additional people continue to either add or subtract productivity but not in as great measure. For example, a third person in framing only adds a factor of 2, not 3, and so forth.But this is my experience and may not be everyone's. The fact is the first person you hire, per my previous posts, is a big gamble. Be sure you have the money in the bank to cover yourself if it goes sour. The fact also is that like Kim stated in his original post, hiring the first person is a big gamble and you don't know where you are going to land. That is why the process of making the decision is so important. You stand a better chance of making a correct decision if you go about it in the correct way.Sorry, sorry to make this post so long. But it is not a simple, short subject.Well KIM have we done you any good?
*When to hire help?...Because you have chosen to take on work that requires more than you.You either hire a second pair of hands and direct them all the time...or have repetitive work that you can let them do...or you hire an independent type that can figure out his work but doesn't want the ownership duties, sales, paperwork etc...Cost...pay rate x 1.5 not including any mistakes or unproductive time payed such as driving to places,etc. $10 will get you a steady laborer this year and next year it will be moving toward $15...A lead man will cost $15 if your lucky and is moving to $18-25 and more...This guy is fast and doing repetitive work that he could do blind with both hands tied behind his back...In my early years (last week?) we did new work to us all the time...We finally started repeating some work and like magic...the numbers were much better...We also valued are work more confidently and the prices went up...Repetition is the key...If you are doing truly unique work everyday then you better charge unique prices...and pay umiquely...Pay $30/hr...costing you $50...And charge $75-85....But you better still be productive or it won't fly...And as always the end cost to the customer better be valued and competitive.Last thing...Subs...Around here many so called employees work as subs being payed $15/hour...And if the job has parts that are billed by the hour...then they are billed out at $20...These guys are doing one trade such as siding, are good at what they do and are happy to do the little bit of paperwork it takes to pay their own taxes...They usually write off their mileage..around 10 to 20,000 miles per year. It works out to be very good for all...the customer, the sub and the sub's company...They are close to being in trouble with the IRS rules about real subs but they do it anyway..and most successfull large companies in my area are doing it...Drywallers,,framers..any company that needs lots of men for periods of a job...Temp agencies and places like Labor Ready can be great, but you still have to know your numbers, estimate in healthy profits and yet price at competitive numbers. For true labor that is on call, you can't beat using the Labor Ready type temp agencies...Just don't expect to see the same face twice and realise lots of these guys might have amazing stories to tell!...They sure introduced me to knowledge and lifestyles I never knew of. And paying help you find through and agency sure does help with paperwork and liabilities...But it will cost you money for the service...Temps should be used temporarily is the way I see it.Hope some of this helps as it was a mystery to me for most of my first ten years in business.near the stream,aj
*Just a caution ... the idea of calling employees "subcontractors" is not new, and has become only more tempting to hiring companies as employee protections re injury, discrimination, overtime, etc. have grown. The contractor can get fried (taxes, overtime pay, fines, etc.) by federal and/or state gov't and /or the worker himself if a sub relationship is later deemed a sham, hence illegal. You could get zapped even if you meant well.(None less mighty than Microsoft got into trouble on this point, aside from their more heavily reported, uh, legal difficulties -- see this )The legal test is not what the parties think their relationship is, or who sends in the tax money, but the "control test" of various factors -- e.g., how much discretion does the worker have in how their job is done, does the sub conduct themselves liek a real business, and so on ... see http://www.nolo.com/category/emp_home.html ... be careful of any overly clever ideas ... get advice if you smell an old fish ... maybe y'all already know this, but I predict this will become a hot area of enforcement, esp. if the unions ever regain consciousness ...
*What is the root word of "part"ner Enough said ALWAYS have an escape clauseDavid
*Andrew, get over your bitterness fast. I originally went into busines with rose colored glasses on, thinking that I could be a better "boss" and develop better human relations. I hate to tell you but 90% of the people in our trades are not interested in long term relationships with employers. It's not uncommon for a two year emplyee to jump ship for 1$ per hour without notice and without asking for a one dollar raise?!!!I worked with a partner for approx two straight years. We rarely had any fulltime empolyees. It was delightful because we were very similarly skilled and accomplished a great deal with little distracions. Employees tend to take a geat deal of time training and re-training and are hard on the your mental spirit. But, if you want growth (more cash), they are a necessary evil. Finding, keeping and managing employees will eventually become your full time job. That's scary!But, learn your lessons fast. Don't be bitter, and try another. Be quick with the gun however and send those that don't work well with you packing fast. Don't let an aggravating employee aggravate you. Get rid of them fast, or you won't be actively searching for another.Hiring tip: Be wary of employees that will leave a jpb without giving their current employer adequate notice. They will leave you in the middle of a wall raising if someone offers them a nickel!Blue
*I am blessed with having friends that are self employed to help me. I am basically a cabinet maker & finish carpenter. I have two cabinet makers that I call on on bigger projects. We split 50/50 after a fee is paid to one of us for having the head ache of putting the job together. The other two are remodler/ handymen & take care of the rough stuff. This works out very well.. We have all seemed prospered. ( no one has gotten greedy so far ) Our take has been at the $40 per hour range. Some times more & sometimes less. It is not all magic though.. We have had a few problems. This is however the case when two or more people try anything. (Like marriage) You put a welcome mat out the says "WELCOME PROBLEMS".
*Yeah, I'm pretty much over it. The lesson came with terrible timing. I'm already asking a neighbor to help with a deck substructure, so I must not be too bitter.Like the "quick with the gun" idea though.... Any legal problems? What do you do with the body?
*Bury it in the end zone of whatever football stadium is being built.Rich Beckman
*Like I would know how to find a football stadium.I remember reading a case where the guy ran his wife's remains through a wood chipper. Surprise, there was still lots of physical evidence for the police, just ... in smaller pieces. See, there's an upside to the link between criminality and poor education.
*actually.. there wasn't a lot of physical evidence..that was Newtown CT, and the papers reported that they tracked it thru the guys credit cards to the rental.. but all they could come up with was a thumbnail..that and the circumstantial trail (no wife... rental of chipper on snowy day..) was enough..he was convicted.. figure Fargo was based on that .. except they were way more inept...
*I thought they found teeth in the river that they matched to dental records....oh wellaj
*who knows.... but i do remember he wasn't as dumb as the Fargo bunch..still rainin.. eh ?tomorrow supposed to break here...
*The seven day forecast for the last five days has been rain, thuundershowers, hard rain, soft rain, and intermittant rain....So far they are right on for a change!!!...I do have tennis courts to pressure wash, estimates to write up and lots of book keeping...Hey I better get to it! See ya.near the wrong stream,aj
*It was like something out of Key Largo outside today. Sheets of water coming down, and probably the third severe thunderstorm this week.You guys know way too much about getting rid of bodies...
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Hi Guys,
I'm currently a one-man operation. I have a lot of work coming up and am considering hiring someone. But I don't know how to make the decision about when and if I should.
I've been doing research and have found that it costs about 40% over salary for all the taxes etc. The bottom line is that it is going to end up costing me close to what I pay myself to hire someone. I get to keep the profit margin and of course the shop costs go proportionally down (the machinery is busier). There is also a large administrative cost. I can automate the payroll etc, but doing the setup will take several days I would think.
My question, though, is what criteria do you use to know it's a good financial decision to hire someone. How do I make this decision? I feel like I'm leaping off the ledge without knowing where I'm going to land!
Any advise from you guys who have been there before? What else should I be thinking about?
Thanks for your help.
Kim Carleton Graves
Carleton Woodworking
*just like falling off a log.. and ten years later i actually knew what i was doing..adrian and jim blodgett are both in your end of the business....go to the business section and read some of the posts there.. employees are discussed a lot.. and there are no simple answers.. some of us are one-man bands.. some have one employee, some three or four , and some run sites with 1200 people milling about ( they don't accomplish anything, but we like to humor them )so, welcome to the mad house, nurse cratchit will be around to explain the rules...meanwhile read the business section...
*Good grief Kim over the past year there have been several relevant discussions both here and over in Knots. If I remember your posts over there you pretty well have your business head on straight. So, my suggestion would be to spend an hour or so in the archives and then go with your gut.Oh by the way, when I did my stint of indentured servitude teaching this stuff the text answer was: "Hire until the marginal cost of the last employee matches the increased profits from that employee." That means you make money on everyone except the last one and you break even on the last one, which at least keeps someone off the public dole.
*I'm currently "testing" the idea/usefulness of an employee...i'm running him thru a temp service, have been for just shy of a year...you'll pay them a markup based on salarly or hourly rate, about 15-30 percent depending on the agency and benefits...the best part is, you are not his employer, the temp agency is, so you don't have to worry about regulations, deposits, etc....and payment is net 30, so it helps in slower months....my temp agency covers 2 mil in liability insurance, he has paid holidays (i.e. in a holiday week, I'm only billed 32 hours, they pay the other 8 hours). 2 weeks paid vacation per year (they pay it, not me!), and several other benefits. They also offer low-cost group health insurance if you or he wants to foot the tab.and if you ever get sick of the help, or whatever, no firing to be done....not to worry about justifying termination, getting sued on down the road, etc....just let the temp agency know that he's not going to work for you anymore....heck if it comes to sour grapes, you don't even have to give 2 weeks notice...Mr. GreenjeansService Foundation
*I really like mr. greenjeans post. I am definitely going to be looking into doing that when the time comes.One thought I have is that if you feel it might be time to hire, then it is definitely time to start "looking". If and when you find someone youi knowyou would want to hire, then it is time to hire.Rich Beckman
*Man, I never had any idea what a pain in the a** employees were until recently! Worrying about them injuring themselves, paperwork, trusting them to work without supervision taht prevents youfrom working, covering their screwups, etc. Does anyone prefer the "partner" approach? It would be wonderful to extend my own usefulness with extra help, but it's not as easy as just hiring someone, is it?(I'm bitter -- i just ceased a relationship with a laborer who was great for a while, then a disaster, -creating- work for me and damaging a couple of customer relationships.... I'm learning.)
*Counselor,A couple of my friends partnered up for a while. They capitalized with what they had, tools, trucks, and customer good will. They also had a partnership agreement drawn up with a one year no fault escape clause. Good thing. At about the ten month point one friend was convinced the other's good will asset contribution was overvalued. The other friend was disapointed with something or another. After agreeing to disolve the partnership they finished up their project in progress without talking to each other. Then they went their seperate and successful ways. A couple of years later they and their wives found themselves in Jamaica on a lumber yard sponsored "best customer reward" trip. We all wondered if the island would be big enough for all four of them at the same time. The good news is that they came back talking. The bad news is they will never be the friends that they were before they partnered up.My message, I guess, is that partnerships solve some problems but they are not problem free.Wounder if you could hire yourself from a temporary service? Group life and paid holidays sound pretty good.Steve
*Bummer. People are complicated, aren't they? The mid-rise up the road has a "trim carpenter wanted" sign up, I'm thinking of giving it a shot. Regular work, only one boss to yell at me.I've been upset at how quickly some disputes become personal & emotional, at least for other people. Not my style ... the mob has it right, nothing personal, just business (as you're cutting off the guy's thumbs). :)Health insurance for independents sure bites, doesn't it?
*In the context of Kim's post it matters not whether the added person is employed through a Temp Agency ore directly by him except that one way might be cheaper than the other. Many times a temp can be hired cheaper because they are demanding a lower wage package. As far as firing is concerned most states, and I think Kim's, don't restrict a person from firing an employee without any reason at all, especially during a specified probabtionary period. I admit that it is easier for the employer to not have to face the employee. But my attitude is that if you can't stand behind your decisions you shouldn't be hiring people anyway.Some people just aren't cut out to be managers/supervisors. If you are one of them then you either need to work for someone else or be happy being the best one man shop in the country (with prices to match).
*The management paradox pops up for people in many fields -- in order to advance your career you have to face doing less of what attracted you to the field and becoming a manager. An engineer friend has mentioned this often -- no one wants to manage, so those who do are not good at the field and managements becomes infested with the creatures of "Dilbert."But one person can't do a whole lot... I can only imagine that the transition period will be frustrating as you learn the ropes. kim, there are services that will take care of the bookkeeping too! The first time around make not make you much money, but you'll get an education out of it. And I've seen the advice here more than once to cut loose employees to preserve profitability.