LABOR COSTS ON THE RISE? South Florida / Broward

Discussion in 'Employment' started by mmrogge, Jun 22, 2018.

  1. mmrogge

    mmrogge LawnSite Member
    Messages: 29

    Hi. I've bought an established lawncare business about a year ago. My cost for labor has gone from $100/$110 to $120/$130 within the year for experienced non-drivers. They are operating trimmers, edgers, hedge trimmers, blowers, etc. I can still find day labor for $100/$110 but anyone with experience is looking for $120/$130. During the same period of time it seems that everyone that wants work has it. I operate out of South Florida / Broward. Has labor really jumped by 30% or am I looking in all the wrong places?

    During the same period of time fuel has increased by 25% and I'm sure that with a recent hurricane all my insurance costs are going up too. I haven't owned my business long enough to raise anyone's prices.. but with cost's on the rise clearly the differential needs to come from somewhere. All my new customers are paying more. But curious if anyone has advice for how to raise my older customers prices. From your experience, how would a simple letter indicating a $5/cut raise in prices be received? I don't have the time to call all my customers. Most are hard to get on phone anyway.
    THANK YOU!!
     
    americanlawn likes this.
  2. Gus McGee

    Gus McGee LawnSite Member
    Messages: 123

    H2Bs are more difficult to get now, so labor costs have increased due to that and low unemployment rates. We are now in an employee favored labor market, so employee pay goes up.

    Anyhow, it all depends on the size of the lawns and what your customers are paying. A customer with a 2,500 square foot lawn paying 30 bucks a cut might choke at a 5 dollar increase. A customer with a 2 acre lot paying 120 a cut probably will not make a big fuss over a 5 dollar increase.

    Do you have signed contracts? If so, you are going to have to wait out the season before hiking those prices. If no contracts, it is best to send out a letter.
     
    Mdirrigation and americanlawn like this.
  3. TPendagast

    TPendagast LawnSite Fanatic
    Male
    Messages: 14,364

    Finally

    Prices in Florida have been too low (ridiculously) for decades.
    If it keeps up for long, many will simply go out of business
    There will be a shortage of lcos and the pricing market will right itself.
     
  4. snomaha

    snomaha LawnSite Bronze Member
    from midwest
    Messages: 1,458

    Direct labor on our sprinkler install crews has gone up 31% in the last 4 years. We are raising prices across the board over the next year to account for higher wages.
     
    americanlawn likes this.
  5. americanlawn

    americanlawn LawnSite Fanatic
    from midwest
    Messages: 6,045

    Same here in Iowa. Weekly pay must become 20% more than last year. Makes it difficult to run a profit.
     
  6. snomaha

    snomaha LawnSite Bronze Member
    from midwest
    Messages: 1,458

    Side note to this conversation - I asked 6 employees (3admin, 3 production supervisors) in our office at the end of a shortened day what they thought our spend on fuel was for YTD - winner got a gift card. Closest guess was less then half and the lowest was 6X less. Moral of the story is - your employees don’t understand the cost of doing business.

    This came about because the daily deposit we had was overheard by the office staff.
     
    ETM, WetspotFL and BrandonV like this.

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