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Labor rates

Discussion in 'Heavy Equipment & Pavement' started by tapout40, Jan 30, 2010.

  1. tapout40

    tapout40 LawnSite Member
    Messages: 4

    I've been in business for 7 years, but I am always trying to stay fair to both ourselves and customers with our labor rates. I am trying to get a feel for labor rates/machine rates. Also would like to compare employee salaries. We cover everything from Mowing, fertilization, Hydroseeding, maintenance, and hardscape. Thanks for any feedback. Scranton, PA.
  2. YellowDogSVC

    YellowDogSVC LawnSite Gold Member
    from TX
    Messages: 3,793

    I personally price my labor rates based on what I need to make a profit, that is, I know what my expenses are. I try and not look at what my competitors are doing but sometimes I have to in order to make sure I'm not pricing myself out of my market.

    While you have to be competitive on prices, if you deliver a superior product, can you charge a little more? I believe so.

    I would do a little research and see what your market will support. Right now, things are tough everywhere. While I don't usually recommend lowering prices, I had to just to try and compete with the rock bottom guys. Luckily, the rock bottom guys are going out of business at an accelerated pace as evidenced by my local craigslist.
    Still, you have to make a living and with so many different service categories, it's going to take some time to evaluate your costs and profits for each service. Seven years of data should help but again, in the economy we are in now, maybe the last two year's data would be more appropriate.

    As far as employee salaries..I use independent contractors on occasion. I pay $150 per 8 hour day for a chainsaw guy. If he is self-insured and really good, I might pay $200/day. I almost always give my independents "at cost" to keep competitive.
    For a general laborer, brush dragger, etc., I pay $10-15 per hour depending on what they are doing for me. Even at $15/hr, I could not find much help over the last two years. Nobody wanted to work for less than a couple of hundred a day for hand labor!! I guess the local market will dictate wages/compensation. We have a lot of illegal, cheap labor down here that I despise but it is something we have to figure on because it drives down the local rates. Not sure if you would have that same problem in PA.
  3. tapout40

    tapout40 LawnSite Member
    Messages: 4

    Very true about taking care of the customers. Thanks for the input. The last two years definitley spoiled us. Reality of business sunk in this year. I am having a difficult time evaluating the competition. I sometimes catch a rumor of what they profit and feel like i'm working for nothing, but then at times I hear from my customers, that I am charging too much. I try and keep my labor rates around $30 an hour, but like you said sometimes I have to lower them according to the job description. I can't charge $30 an hour for guys to clean leaves.
  4. grassman222

    grassman222 LawnSite Member
    Messages: 178

    Yellowdogsvc is pretty much right . Ive been in business for 9 years now and the more information you have the better . And i would say know your competition as much as possible but not to much to were they know your business. I charge any were from $45 on up per hour for leaves . It all depends on weather I'm taking them with me or leaving them and how much work is involved in moving them ect. :usflag:
  5. grassman222

    grassman222 LawnSite Member
    Messages: 178

    Labor costs , i have yet to fully figure out the right way to go about any labor costs.Like yellow dog said no one wants to work anymore . everyone wants to be a millionaire but doesnt want to do anything payup. I sub out some of my work which makes it alittle easier on me cause i dont have to do the work or supply the machines ect. and i still get some money in the end .
  6. tapout40

    tapout40 LawnSite Member
    Messages: 4

    I'm using 2 guys for $45 an hr. for leaves. Mulching, trimming, edging, and other labor I'm getting $30 an hr. per man. I try and get $75 an hr for machine and laborer if using skidsteer. Hydroseeding is in a whole different category. Are any of you guys fertilizing and where are you located?
  7. grassman222

    grassman222 LawnSite Member
    Messages: 178

    I dont fertilize . Reason being is cause in NJ all the permits , lisences and what not that i would have to pay for is just way to much in my mind to pay out . And all the classes id have to go to to keep up the credits for the lisence, which i have to pay for . I let someone else that i know do it , they have been in business for a while and they have the lisences and permit, ect. . There business is fertilizing so thats there not going to cut into my business for cutting or anything like that so i think it works out better , for me anyway. :waving:

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