Piece Rates

[SoCalElectricalContractor]

There may be some confusion here. When you say 4500 sq. ft. tract are you talking about total space or finished living space?

I have noticed that some contractors count the unfinished basement which does not really get much electrical. This normally means only about 3K+ ft. of living space. It still sucks but it's not quite as bad as it sounds.

We don't have basements. 4500 is livable.
We are one of the larger electrical contractors in SoCal and we make great money at the prices we used to get. The problem is, i am losing jobs by 5% and i can't cut my OH more than it is. I can't buy the material any cheaper than i do because I know what people buy it for. I would like to know from people in the residential industry if I pay too high a piece price.

 

[LLSolutions]

Pay your labor what they're worth and not a penny less. Any good electrician knows what he's worth to his boss, personally if a contractor gave me a pay cut i'd be out the door no questions asked.

 

[SoCalElectricalContractor]

Pay your labor what they're worth and not a penny less. Any good electrician knows what he's worth to his boss, personally if a contractor gave me a pay cut i'd be out the door no questions asked.

In the market I'm in today, it's either that or unemployment. You choose.

It's not about paying somebody what their worth in a piece work environment. Guys earn what they make.


My question is now for business owners or management because employees don't understand business enough to comment(which is why they are employees).
Is $.23/sq ft too high for rough?

Is $.12/sq ft too High for finish?

These are piece prices paid to employees. Not the contract price.

 

[iwire]

employees don't understand business enough to comment(which is why they are employees).

Yeah anyone that is employed is clueless. :roll:

 

[mdshunk]

Yeah anyone that is employed is clueless. :roll:

No, but it's probably fair to say that they have less of a clue than the owner does, many times.

 

[SoCalElectricalContractor]

Yeah anyone that is employed is clueless. :roll:

Maybe not clueless, but shortsided.

 

[iwire]

No, but it's probably fair to say that they have less of a clue than the owner does, many times.

Yes that is true.

But here is a business owner asking a basic business question that he should already know the answer to himself

I know as well as anyone his prices should be a reflection of his costs and not have anything to do with what someone else would charge 2000 miles away or even next door.

 

[s.sparkomatic.r09]

You said you can't cut your overhead? Why not? It's obvious that you?re a much larger shop than I am.

If your guys are piece workers then they own all other there own tools??..and jobs can?t run over on time.

You said you make great money so somebody needs a pay cut.

And I?m not trying to poke you with a dart, but if you make great money maybe in a junk economy you should look for good money. Some money is better than no money. 5% your missing bids by 5% on repete customers? You can't get in there and do something?

Why can?t you cut your overhead

 

[SoCalElectricalContractor]

Yes that is true.

But here is a business owner asking a basic business question that he should already know the answer to himself

I know as well as anyone his prices should be a reflection of his costs and not have anything to do with what someone else would charge 2000 miles away or even next door.

You are unrealistic. What I am asking is a simple question. Is the reason I am losing work, because my COSTS are too high (i.e. labor costs)? I want to be fair to my employees and pay REALISTIC piece prices. If I am paying 25% more than the next guy, I am paying too much, and have now found my reason of why I am losing work. Is it really too much to just simply answer the question at hand instead of coming up will all of this stuff about

"you should pay people what they are worth cause that is fair."

Sorry but that is foolish. the world doesn't work that way. It is a supply and demand world and price rules all. I would love for everyone in the industry to be able to pay their employees 150k a year but that is unrealistic and stupid. What is so hard to comprehend? If anything, it is me as a boss being concerned not to rip off my employees. Call my inquiry research. Am i being ripped off or is it fair? I know it isn't low because I know for a fact that one competitor of mine pays .18 per sq ft for rough and .10 for finish. But that seems a little low to me.

Now if everyone is that way, then it is me who is out of touch, not those guys.

That is all i wanted to know and instead I get all of these answers from employees wanting raises.

 

[SoCalElectricalContractor]

You said you can't cut your overhead? Why not? It's obvious that you?re a much larger shop than I am.

If your guys are piece workers then they own all other there own tools??..and jobs can?t run over on time.

You said you make great money so somebody needs a pay cut.

And I?m not trying to poke you with a dart, but if you make great money maybe in a junk economy you should look for good money. Some money is better than no money. 5% your missing bids by 5% on repete customers? You can't get in there and do something?

Why can?t you cut your overhead

That is just it. I am not only not making any money, but taking it at some of these costs would be below cost plus necessary overhead. Not owner profit. I haven't made a profit in 8 months. Thankfully we all saw this coming so I have enough saved up. But at this rate, I won't have any employees if I can't figure out a way to drum up some business. I am already working for free but the rest of my office staff doesn't believe it is there duty to do so.

Although if it keeps going the way it is, they won't be working at all.

 

[growler]

My question is now for business owners or management because employees don't understand business enough to comment(which is why they are employees).

There are not that many piece work contractors on the forum and that's why you will get few favorable responces.

Piece work may be profitable but most of us consider it only a step or so above slavery and we would wish neither to be a slave nor a slave owner.

 

[peter d]

Although if it keeps going the way it is, they won't be working at all.

So it's fair to say that you're a victim of the collapse of the housing market in California.

Have you though about going into commercial or service work?

 

[ike5547]

In the market I'm in today, it's either that or unemployment. You choose.

It's not about paying somebody what their worth in a piece work environment. Guys earn what they make.


My question is now for business owners or management because employees don't understand business enough to comment(which is why they are employees).
Is $.23/sq ft too high for rough?

Is $.12/sq ft too High for finish?

These are piece prices paid to employees. Not the contract price.

If it is either sink or swim and there is no other way to cut your costs then this becomes a rhetorical question.

 

[SoCalElectricalContractor]

You said you can't cut your overhead? Why not? It's obvious that you?re a much larger shop than I am.

If your guys are piece workers then they own all other there own tools??..and jobs can?t run over on time.

You said you make great money so somebody needs a pay cut.

And I?m not trying to poke you with a dart, but if you make great money maybe in a junk economy you should look for good money. Some money is better than no money. 5% your missing bids by 5% on repete customers? You can't get in there and do something?

Why can?t you cut your overhead

I have analyzed my costs already. I already took away some benefits that all of my employees had prior. I have the minimal office staff necessary to do the work that we do. I do have more work than I am making it out to be, i just don't understand how people are going to do work for what they are willing to currently. So, I am doing some investigating as to how they are. If they pay a whole bunch less than I in labor, that is a good reason why they could be a few hundred dollars a house cheaper. If you would notice, I also have a thread on the material end. I am looking for anything to give me a competitive edge and to make me a bit cheaper. Cause frankly, I don't know how I am going to do work for the numbers required in the market today.

 

[SoCalElectricalContractor]

There are not that many piece work contractors on the forum and that's why you will get few favorable responces.

Piece work may be profitable but most of us consider it only a step or so above slavery and we would wish neither to be a slave nor a slave owner.

When things boom, pieceworkers make double what commercial and industrial guys make. I have employees who make an easy 100k without ever managing anybody but themselves. They have no stress, the material is there waiting for them, and they don't have to worry about budgets or customer satisfaction because my hourly foreman who makes close to 75% of them, has to. I think it is laughable how people view them. They make more than most office jobs. However, when things get ugly, they also have to share the ugly.

 

[SoCalElectricalContractor]

So it's fair to say that you're a victim of the collapse of the housing market in California.

Have you though about going into commercial or service work?

We do the service work and a small amount of commercial. However, I am more worried about our residential division. I want to make money in all areas. If i can't make money in residential, the choice is easy to dump it. But that puts people out of work and is tough. Plus, if other people can do it, I can. I just have to figure out how.

 

[mdshunk]

Plus, if other people can do it, I can. I just have to figure out how.

Yikes. I applaud your desire to not put people out of work, but trying to figure out how to compete in resi in California is akin to having whatever mental disorder it is that causes people to be self-cutters.

 

[iwire]

"you should pay people what they are worth cause that is fair."

I don't recall anyone saying that.


Good luck. :smile:

 

[peter d]

If i can't make money in residential, the choice is easy to dump it.

You may have to. I've heard a recovery in the housing market is a full year or more away in your neck of the woods.

And if people are so desperate for work that they are racing to the bottom (price wise,) well, that's exactly where you will all end up.

 

[Joe Villani]

Piece Rates

I met two residential electricians the other day.

They said that they were splitting 27 cents a square foot for rough.

I did not find out how much they were getting for the finish.

So to answer your question, based upon the area that your are in, I think you are getting a deal on your labor.


Joe Villani