Piece Rates

[LawnGuyLandSparky]

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.

Yes, that's the problem. In this worsening economy, you'e not making what you used to because your labor isn't suffering enough.

 

[LawnGuyLandSparky]

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

Did it occur to you you're losing work because other contractors attempting to survive are underbidding you?

"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.

If you would answer one question, answer this: How can you call your pieceworkers employees? If they have no work, do you pay unemployment? If they are injured on the job, is it your worker's comp, they file under?

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.

 

[LawnGuyLandSparky]

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.

Based on this response, I have to point out... you;re trying to make money in the tightest market with the tightest budget, in a worsening economy during a housing downturn, the cheapest labor, the cheapest material and all you're concerned about is lowering the bar even further...

Anyone see a pattern here?

 

[LawnGuyLandSparky]

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.

But not you, apparently the ugly shouldn't affect you. BUT when things boom (and it's been a historic 10 -11 year cycle since they've been tracking these things) your guys earn an "easy" 100k by working twice as much...

Twice the pay for twice the work is no bargian at all.

And BTW, 100k is not double what commercial and industrial guys make. I'll hit 100k in a couple of weeks and that's now - in a slumping economy.

 

[LawnGuyLandSparky]

After all of this I have learned 2 things. The first is all of you people wouldn't survive a day in the California business (Which is good for me) and I wasted my time posting and trying to explain myself. The second is I can do business all over America because I know my business is profitable at what i have gotten bids for in the past.

No, you couldn't. Try doing business in a State where the employee pool isn't a bunch of high hippies who've had the sun beating down on their heads all their lives, who would never fall for your ridiculious piece rate ploy, or where the practice is outlawed totally.

Try I do know that moving across the country codes change drastically. I could see if you had to bend pipe all through a wood framed house it could get ridiculously expensive.

Actually, it doesn't get ridiculiousy expensive. They are very good at it in Chicago, and believe it or not, it doesn't increase the sale price of a home one bit. Forgive my surly attitude but I can see how/why labor posessing an actual skill that requires some thought frightens you.

But if you are using romex and doing a 2000 sq ft house for 10K, you are ripping people off. If I got those prices, we would make almost 100% profit. Material included.

At your labor rate, It's more like 125%...

 

[LawnGuyLandSparky]

There is a difference between electrical contracting and wiring tract houses. And yes, I wouldn't survive a day wiring tract houses, in California, or any other part of the country.

I fail to see the logic of working for 2-3% net profit.

He makes it up in volume... :grin:

 

[LawnGuyLandSparky]

Frisbee. You may be an electrician, his guys are installers. They don't know how to do electrical work, they know how to drill holes, or how to set boxes, or how to pull branch circuits.

But most of them probably don't know why they are doing it, or how to determine what to do.

In short, they were way overpaid in the good times. And they aren't able to go work for your company as anything other than an apprentice, because they don't have the skill set.

So, if they have been makin 6 figures roping romex, but they would have to go back to 1st year apprentice wages anyplace else.

Tract housing is not for those with a concience.

On the plus side, tract housing is good for learning basic circuitry, and developing a knack for speed and accuracy. But if you're into it longer than 2 or 3 years without looking to aquire a firearm, I give you an F...

 

[LawnGuyLandSparky]

I know some (many?) of you are bored with seeing these pictures by now, so I apologize in advance (and pictures are a touchy subject lately.) However, they are very relevant to the thread. This is typical tract home work in San Diego County, CA. This is the level of workmanship you will see done by romex racing pieceworkers and hourly installers.

Holy crud! Looks like the scrap heap threw up!

 

[LawnGuyLandSparky]

I remember when the painters union was dead set against rollers, and later against sprayers. They even had a newspaper ad that claimed that paint applied by a roller was somehow inferior to brush applied paint.

IIRC, early episodes of this old house featured painters who used brushes over rollers. later on they switched mostly to rollers. Now most spray the prime coat and then spray on the finish coat and than roll over the sprayed on finish coat.

I can also remember when drywall started coming out and the screaming about it that came from the plasterers.

Things change.

Any labor saving (read: less income) change or modern technique that threatens to undermine a man's capacity to earn a living is naturally rejected. Much in the same way any business owner does not exactly welcome competition.

It would surprise me very little if tract builders started using less and less stick building and more and more assembly in factories. Roof trusses have already gone that way. When is the last time you saw a site built roof truss?

Correct me if I'm wrong, but I thought all truss systems were engineered, custom ordered and factory made? (Who has the on site machinery to high-press those nailplates?)

All it would take is a smart builder who figured out how much money he could save if he used standard dimensions for all his walls.

Would make for a pretty boring layout, no?

 

[puckman]

pricing

pricing

what do you guys think of a price like this $ 18,700 for a 48,000 sg. ft home?2 family 6 over 6, 2 baths with x fan w/light ea. apt, smokes w/ co, 4 tv lines cellar with small apt. 200amp. service, wall switch for ceiling box for future. i like to here some prices that you may have given or done.

 

[Sierrasparky]

Our total bid on a 4500 sq. ft. tract house would be around 7K.

So you put the entire house on one circuit except for the kitchen and laundry.. On 20 amp bath cir goes to all five baths...

Gee now that a competent installation

 

[Sierrasparky]

If you are getting $7000.00 to do a 4500sqft house I want you here with me. I will sit back and pocket 7k to 8k and never leave the a/c.:grin:

Im with you.....

 

[growler]

One 20 amp bath cir goes to all five baths...

Gee now that a competent installation

I worked on a house after it was sold last year that the EC had wired exactly that way ( code minimum). Was it a little cracker box tract house? No, the original asking price was 650K but sold for only 450K. One of the main problems with the home was the crappy electrical work and the other real problem was the crappy HVAC work. This was why they couldn't get anywhere near the asking price ( good neighborhood, expensive lots ). I'm not sure what it would have cost to get the electrical and HVAC done right the first time but I'm sure it wasn't anywhere near 200K ( what they lost by having to sell cheap , this was before the bottom fell out of the market).

 

[Sierrasparky]

I worked on a house after it was sold last year that the EC had wired exactly that way ( code minimum). Was it a little cracker box tract house? No, the original asking price was 650K but sold for only 450K. One of the main problems with the home was the crappy electrical work and the other real problem was the crappy HVAC work. This was why they couldn't get anywhere near the asking price ( good neighborhood, expensive lots ). I'm not sure what it would have cost to get the electrical and HVAC done right the first time but I'm sure it wasn't anywhere near 200K ( what they lost by having to sell cheap , this was before the bottom fell out of the market).

right on.
What I don't get is that the Tradesman have to pay the price of poor planning by the GC.
Even when the GC was doing great they still stuck it to the Tradesman. What those tradesman never get is all the effort they put in to get that bottom line. The only good thing was is they kept the money flowing. Unfortunalty the money leaked out of the country

 

[brian john]

What happened to SoCal? I had some questions that have gone unanswered.

 

[jsharvey]

piece work? not in Kansas

piece work? not in Kansas

Quote
"I know some (many?) of you are bored with seeing these pictures by now, so I apologize in advance (and pictures are a touchy subject lately.) However, they are very relevant to the thread. This is typical tract home work in San Diego County, CA. This is the level of workmanship you will see done by romex racing pieceworkers and hourly installers." {pics below}


What the heck kinda wiring is that ? I'm not an inpector by any means but just a quick look at those pics I spotted 4 code violations that the inspectors here would have nailed if he showed up half asleep.
I'm one of those dreaded "employees" that doesn't know a thing about the business side of the trade but, I do know about quality work and taking pride in what you do and if what's in those pictures is typical for Califonia, it's just another reason for me to stay here in the flat lands of Kansas. Besides, you couldnt afford me. : GRIN :


J.S.Harvey

 

[tonyou812]

Your prices make me want to puke. And the fact that you're losing work even with prices like that makes me want to puke even more.

Isn't California one of the most expensive places to live and run a business in the nation? Last I heard you have among the highest workmen's comp rates to deal with, among other things. You may be right...your competition might not be around for much longer.

Maybe its time to restructure.

 

[Sierrasparky]

Maybe its time to restructure.

I'd say so

 

[tonyou812]

this is why I never limited my exposer when I worked for other ECs.

 

[peter d]

I'm one of those dreaded "employees" that doesn't know a thing about the business side of the trade but, I do know about quality work and taking pride in what you do and if what's in those pictures is typical for Califonia, it's just another reason for me to stay here in the flat lands of Kansas. Besides, you couldnt afford me. : GRIN :

I've "inspected" many tract homes in that area and those pictures are very typical of the work in every single one of them. Even the few customs I've seen are not much better.