I need to hire an employee full time 20-24 ft ladder work with some 32 ft ladder cleaning. We also do power washing, and interior gutter cleaning. I want to pay him hourly. I don’t have a clue for what is a starting rate of pay should be. We are in the suburbs of Chicago.
Thanks,
Ed
So…you have no idea what a decent hourly rate for window cleaning is in your area? If thats the case either come up with a figure that you feel is decent or…call around to other WC’ing companies to get a feel for what they pay.
Another thing to consider as well…is if you are matching taxes,covering the work comp those costs do come directly off your profit so, dont forget to figure that in. This goes for you doing the payroll or…having a payroll service!
I live in the suburbs of DC and started my employee at $12. That’s me though. I know some other service companies in my area that start their employees much lower. Look in the classified ads under help wanted and see what other service companies are starting at. Talk to some other service companies and ask them directly. Painters , landscapers, etc… Just make sure you don’t start them under minimum wage.
[I]Here’s the answer Ed: There is no such thing as the “correct” rate of pay.[/I]
The ideal solution is the number at which you both feel like you’re getting the better end of the deal.
In other words, forget about what your competitors charge. Just ask your prospective employee what he’s looking for, and negotiate until you’re both happy.
I pay twice what many local companies pay, but I really like and trust the people working for me.
Always remember that YOU make the rules with your business.
I would have to say depending on the experience one has would somewhat dictate what there pay would be,for example someone with more ladder & window cleaning experience would render a “better pay”
Im all for paying well…as Paneless said however…if your running a “Legit” business ie:liability ins.,work comp,matching taxes… plan on an employee(s) roughly costing you anywhere in the area of 30 to 34%
The bottom line…the more they make the more they cost you! Of course in the case of "good employee’s they dont cost they pay! Just alittle food for thought.
Yeah - I agree totally with Sparkle on the fluctuating rate depending on experience, etc.
I’m not trying to brag, either, about paying more, although it kind of sounds like it. In fact, I’m sure some think I’m foolish for doing that, since I make less money at the end of the day.
Crunch the numbers, then figure out the maximum you can pay, and then negotiate the price down as far as you can while still keeping them happy…
If your pricing is on track, you should still have solid wiggle room left for profit.
Where I am, my liability insurance rate is determined by gross sales, not number of employees, so it doesn’t make sense to factor it into employee costs. I only consider what I will have to pay out in terms of workman’s comp on top of their wage, since their taxes come out of their paycheck, not mine.
Incidentally, workman’s comp is around 16% on top of wages, in Ontario, Canada.
I can appreciate paying well.I have in the past & consider to still pay decent nowadays,just not to the extent that i recently did.
Partly because as Paneless stated “Liability Ins.” id gaged towards gross sales (its still an expense the business owner has to contend with) but for us here in the states…we have to match taxes(there is where it can get costly) because the higher you pay the more the employee cost but…if your gigs are priced good & your busy then its all good.
Another hefty cost is work comp i currently pay 19% so thats figure off how many hundreds each employee makes,which you can easily see between the 2 items taxes & work comp it does add up.
Now…that still doesn’t include “licenses” for the various cities i work in… the cost of gas,supplies,advertising,cell bill etc. Plus…im bonded that cost me about 100.00 + yearly as well. The “Imfamous” overhead:D
Im all for paying well…just make sure you take into consideration ALL the other costs associated with running a legit business.
Personally i like the 33-33-33 rule…33% for labor 33% for overhead & 33% for profit,although it can be tough to hit those figures all the time it can really be nice when you do!
i like the sound of that rule. Do you know of anyone pulling that off?
Oh yes…there are a few who live by it! Although as i mentioned it can be easier said then done but…doable. Another thing to consider is…if one is outta whack it throws the rest out as well.
Some people say payroll should not exceed 30% other say 40 tops! Thats where trying to implement such a deal is hard if…your nowhere near those numbers to begin with.
I have to say…as im sure you’ve seen on other forums my dilemma has been carving the fat trying to get as close as possible to this as possible.
When you think about it…there is really more to it then meets the eye!
As an owner, Sparkle, in the equation above, are you categorizing your own wages as “labor” or “profit” ?
I don’t want to answer for Craig but if you own the business and are an active part you should be getting “paid” in addition to making profit. Just my 2 cents.
Thats a good question Paneless and Tony pretty much nailed it too!
It all depends on what we’re doing? If my guys are out then it falls into the “profit category” If im out with them it really depends on what we did dollar wise,but…normally i dont consider my wages coming from the labor end of things.Im usually out with them because we’re slammed and have to get a certain amount of gigs done.
Unless im out doing gigs myself which i do frequently then i guess one could consider it my labor but… my profit too?
I try not to interfere with the “payroll aspect” too much,i make sure my guys are covered then i take my end of profit after.As i previously stated its a balancing act with the 33 rule,if you off on any it throws the whole deal out of whack!
Thats why I was curious if you could slide your wages into the 33%.
If I could do that, and still skim ANOTHER 33% off the top, that would be fantastic, but when I’m working with my little crew, I don’t think of it that way, either. I just think of the profit part going into my pocket.
Wishful thinking my man! If it were only that easy! The only time you could probably pull that off would be when your solo on the gigs.
Provided everything else is taken care of itself your cost regarding employee’s,overhead etc.
I always try & sock away alittle extra for the unexpected things,vehicle breakdowns,excessive gas bills emergency supplies & so on.
Of course pricing has alot to do with that margin as well! If your running close to the bone,you have to be a bit thrifty.
If nothing else its something to aim for!
I must say its a pleasure having you around again Paneless,your a sharp business man;)
im trying to figure the forum out. 33% profit? are the owners of most of the companies on this forum still washing glass?
Yes…i still clean glass. Basically it refers to the 33 rule which would break down to (but does not play out exactly the same for everyone) 33% for labor 33% for overhead & the remaining 33% for profit.
Basically you’d have to run a very tight ship to hit those numbers continually.
Ed,
I start them out hourly $10.00 -11.00 an hour till they get the swing of things (usually 3-6 months -Im talking residential). then i move them to 30% commission rate. They know this structure from the initial interview. I get hard workers this way. They tend to show more interest in their work and are eager to learn the trade efficiently so that they can do the work in a timely manner. They learn that time is money not only for me but for them too! Im all about quality and working at a cosistent pace. They learn the quality aspect from the initial training period working with me usually for the first month or so. Commission= guaranteed profit for the most part in my book.
Steve we do it basically the same way as you. Only difference is we only give 2 weeks on hourly before they jump to percentage.
Steve…so this 30% you refer too is that per worker? Also is that if there solo or w/a helper?
I second that the 30%.
Is he by himself on residential? or Are you with Him?
