HCECalaska

i am searching for ways to reduce loses due to non productive labor. looking historicly through company bids for over the last 20 years it has been next to impossible to meet or beat a labor budget. labor overages comsume all the non labor savings in a project. an article i read said that non productive labor consumes 40% of construction labor on a project. i find my histiorical labor overage is 15%, although i should be happy its only 15% not the 40% but at $6million in gross sales that consume $900,000 a year.

help

brian john

I always figure if you get 6 for 8 you are doing good that is 75%. Whips, rifles, dogs and false promises work about as good as anything else.

MDShunk

I just watched an electrical construction news video the other day that says that the electrical industry wide non-productive labor is about 33%. The only way I've found to offset this is to have "hip pocket" work to send a few guys to for a bit until they're more legitamately needed on the bigger work. I'm mostly into service, and almost always get 7 billable for every 8. I'll take that any day.

faber307

MD,

if you're billing 7 for 8, can I pry and ask what the spread is on your recharge vs. man cost?

With a JIW in the IBEW, If I billed 7 for 8 hours paid I would turn $130.00 per day not including fuel and vehicle wear.

not to many............

HCECalaska

in every estimate i do i always include a minimum of 10% for non productive labor. most in town work if i exceed this i will never win a bid. so if you take the 10% i plan for and the 15% i go over then i have a total of 25% non productive. it is impossible to do a project with out any non productive, there needs to be a way to reduce this lack of labor. electrical margins are to low any way.

MDShunk

Depends on the load that day, since the first hour is more. Depends on how many places that particular man made it to. It averages between 190-215 a day labor margin. Sometimes less, but never more.

faber307

that's where I screw up.
I have a 2 hour minimum.
the man typically charges 2 hours per call also.
I can't complain, I have a system that is agreed upon where I pay very little non billable time

still weighing minimum time charge vs. trip charge.

faber307

The labor units I use are inflated enough to cover most unproductive time.
some times I throw in unproductive time from the gut at the recap of the estimate.

Pinhead

This is why I like piecework. On new houses I pay per box.

faber307

you pay your help by the opening?
do you subcontact? 1099?

MDShunk

I do very little truely new work, and what I do is sorta weird stuff, so that might not work so good for me. Would you care to share a little more detail on how your system works, Pinhead? I'm curious to know how it's structured. I've never worked under a piecework system.

Pinhead

If you want to start a flame war, just bring up the subject of piecework. 99% of all electrical contractors are sure it's illegal. I'll present some details and you guys can flame away.

Most electrical is really custom, hand crafted masterpieces, piecework does not work for this sort of work. However, on new homes and large additions, etc, piecework works very well. Any job where there's lots of repetition can be done by the piece.

Here are the facts:
1. I pay $3 for every box my guys rough into a new home.
2. I pay $1.5 for every device they trim out.
3. They are employees and I withhold taxes!

I pay myself about $3 for every box they rough in, so when I bid the job, I know exactly how much money I will make.

Paying by the piece can be used to abuse employees and this will cause problems, do not do this. Let's say on average you want your men to make $20 per hour. Now examine your productivity records. If your fastest guy can install 10 wigets per hour, you would pay $2 per wiget. But this is abusive, the fast guy is not rewarded for his speed and the average guys are punished. So take an average approach, say the average guy without killing himself can install 5 wigets per hour, so set your piece work pay at $4 per "wiget"...

Here's where the brain trust usually says "piecework produces shoddy workmanship". That's utter nonsense. My guys know that if something isn't installed right, they have to fix it on their own time. I make sure they trim out their own work, they don't want to troubleshoot. I have standards, they know what they are. If they sell extras I split the money with them, I'm very generous. They will take the time to get a signed work order for a jacuzzi tub circuit if they know they're going to make $30 for 30 minutes work.

Paying by the piece prevents "scope creep". Sometimes the GC wants extra stuff and guys will just install it without documenting anything. When you pay piecework, they suddenly stop giving away work, they want to get paid so they get signed work orders before starting the work.

I pay for everything by the piece, home runs, making up panels, I even pay for them to draw a wiring diagram.

Paying by the piece makes guys feel empowered, they can work late or go home early on Fridays, they are compensated based upon how hard they work. The slackers can't hack it and are weeded out.

Sometimes there are problems where through no fault of his own, a guy will get trapped on a task that becomes non productive, they explain the problem to me and I pay hourly for such work.

Many other trades like drywall, roofing and painting pay by the piece, it's not a radical concept. It's a sound, conservative way to run a business.

Joe Momma

So what is classified as non-productive time?

I feel I give 8 for 8, without even a minute spared at work that is not job related.
It's hard to imagine that your guys are basically asleep in the corner for an hour and a half every day?

Also if they're standing there staring at the wall that's not to be considered unproductive, even if his hands are in his pockets.
This is not assembly line work where you figure it out once you never have to think again for 50 years.

__________________
Joe Momma was here

Pinhead

Non productive time is time spent doing things that are unrelated to the installation of electrical wiring. Most people believe workers spend 6.5 hours per day doing productive work.

Non productive work is the thousands of little things you must do when working with other trades, like moving the truck so a delivery can come in, dragging out extension cords and ladders, solving problems with other trades, answering questions for the owner or architect, meeting the inspector, helping the plumber move a water heater, etc.

rod213

What he said.
We get travel time one way. If we only work a service call to say 2, and leave at 2 to head to another job. We start the time for the second job at 2.

__________________
-Rodney

brian john

You smoke Joe...smokers (at this time) lead the industry in non productive labor and NO one gives 8 for 8 everyday, just does not happen.

Not questioning your work ethic just a proven statement. But a good worker should feel they give 8 for 8, what you would have to do is think about this. You ever go the bathroom? Take a coffe break?, lunch? are you in the trailer at 7:00 or putting up that 1st piece of pipe, on Friday at 3:30 are you still laying pipe? Ever told a joke on the job?, made fun of an apprentice and the list goes on.....................

frank

I charge this way. Day rate from shop to shop where the work is maintenace or small fry.

But where there is a job to complete, that can be completed within a day,or more, I offer a completion rate to staff. I add overhead and profit plus a sum for final tests and perhaps a return call. Because I am self employed and have no one on the 'books' getting a price from others is a sure means that you won't end up subsysiding a job. Sub letting work is very popular here and most electricians like it. It helps them be independent - free to come ang go as they please. They are always loyal and keen to do good work. Each area has a pool of such men and you can always rely on them if you need help.

Frank

Frank

DeepOne

Beside me for new homes "piecework" method is prevalent. Based on time method useful when present many non productive labor, such as repair. And for well known work, such as standard construction, i simple say cost. But customer more likes first method as more demonstrative.

Pinhead

приветствую!

Я не хочу жить в квартире !!! Я не хочу, чтобы огонь...

MDShunk

That would be heaven for me. Such a pool exists in very few places in the US, I believe.