Instead of paying plumbers per hour – pay per job

[orchardviews]

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Hello everyone,


We are a small plumbing company and normally would pay our plumbers per hour for work. We have been awarded a job for a number of new build houses recently.

As I see it, we have 2 options:
1 – Get our own plumbers to do the work, or
2 – Agree a labour only price with a sub-contractor to do the work. This way we have fixed costs for the labour which is a big advantage because the margins are so tight.


Would it be possible to agree a fixed price with our own employees for doing the job and not by the hour??? We would say to them, for every house you complete you will get paid “x” should it take you 20 hours or 25 hours? The employees would have to agree this obviously and the standard of the work would have to be sufficient.


What do you think??

 

[Plumbstar Tom]

this already exists, where you get paid £xx.xx for fitting a basin tap and £xx.xx for fitting a rad in new build sub contracting

 

[tamz]

Just about everyone doing site work is on price work. It is really the only way to do it. You'll probably loose money paying them an hourly rate.
Split the works up into sections like first fixplumbing, heating, drainage and wastes, (gutters and leadwork if you are doing them). 2nd fix bathrooms, shower, boiler, cylinder, rads etc. Test and commision stuff.
Price it fairly based on your own figures.
Don't be surprised if your guys suddenly learn they can work harder but also don't quibble if they make big money some weeks.
Remember to charge the builder for any variations etc. You can pick up a few quid there.

 

[armourer]

Defiantly possible but If using your own Plumbers, what do their existing contracts say?
If you tried to force it through or used bully boy tactics to get them to agree, I would say it would be a major change in terms of contract?

But then again I'm not a Lawyer.

 

[stevetheplumber]

you can sub it out that way but your existing workforce are on contract for hourly pay so the only way you could do it for them would be to run a bonus scheme to incenticise them to do more in the hours you have to pay them
you cant change there conditions to suit your self and if you made them redundant while taking on others they would have a case for unfair dismisal

 

[AWheating]

you should have no problem with implimenting this, its quite standard across all trades. I asume that when you estimated the job you allocated a number of hours labour per item / job and then totaled it to calculate your labour costs? (excluding extras and maintenence),if so then you can convert these cost into prices

for example if you have allocated 10 hours to fit a bathroom based on £10 per hour then you have £100 to play with. So base your price for the bathroom on this. You need to remember that there maybe extras that need to be covered like fitting the shower that cant be done when the bathroom is fitted so you will have to give a seperate price for this. (It may also be wise to keep a small amount back to cover snagging labour if not already worked in)

some things to consider is you must make it possible for your workforce to earn enough above there basic wage to motivate them to work hard, you can not pay your employees less then there basic wage so if they dont produce enough work to cover there basic you will still have to pay them that hence needing to motivate them. You will need some way of making deductions for poor workmanship and any deductions must be notifed before you make them.

To keep the workforce happy it will be more important then ever for you to do your job correctly and run and supply the job as good as possible. for example on a day rate they will view a lack of materials as less of a problem then on price because on price it will be viewed as effecting there ability to earn more money, if they dont have it they may just not bother to fit it. Once your workforce has had a taste of earning more money then there day rate you may find it difficult to settle them back onto a hourly rate without some unrest, so the change in your workforces mentality needs to be considered.

 

[mcniven]

its called priced work lol

 

[orchardviews]

This is all something new for us - in terms of a fixed price for our own plumber employees. We have used subbies before for fixed price word but not our own employees.

The reason for wanting a fixed price for the labour is very simple - margins are so tight and we want control over costs as much as possible. I understand we could sub it out but I'd rather use a couple of our own employees because they are good lads and we don't have a lot of work on.

If anyone else has any more experiences I'd be interested in reading about them. Very interesting.

 

[Mrs Tara Plumbi]

We are used tp thinking self employed subbies work on price work but it is perfectly OK to employ people on PAYE on price work. Possible conflict with existing contracts but if the guys could take home more than usual then it could work OK.
With having to pay such high employers NI contributions and 28 days holiday I can't imagine how you do it and make profit - good luck

 

[justlead1]

Managing this process is far more complex then hourly rate. Being successful for all parties, means a lot more organising, and monitoring. When on a bonus scheme plumber will blame and claim, when the management of time and materials fall sort. From my experience your margins need to incorporate a higher percentage to cater for management errors. On a positive note you will soon find out who can do it. Good Luck