We get paid on a commission, %36 on a labor hour, anyone else pay by commission or does everyone pay by the hour?
Our guys get paid by the hour, a plumber costs the company about $85 dollars an hour when you include the benefits on top of the $43 an hour they make in wages. Trying to pay guys piecework or performance based is strictly against our union contract.Dang thats pretty good money Ron. I rotate call once a month and they give me 4 straight time hours for standby. Which is good but if you get called out we try to make it last at least 2 hrs so you wont loose your time. Sometime it works out sometimes it doesnt.
There is no way we can abuse the prices, company has it's set hourly rate, we just don't add extra labor for others tasked requested by owners if work gets completed in that 1st hour, only thing is, plumbers don't carry machine, we have drain techs for that, and if needed a drain tech is dispatched, there is a charge for that. Times are noted on all invoices.We pay by the hour with a guaranteed minimum. When our plumbers do something above and beyond, we give them extra money to show appreciation. Commission may be abused with our customers paying the price - so we don't do it.
BTW - our service plumbers do get tipped often.
That argument is as old as the idea of commission. Not discrediting it. Just saying...Are commissions equal? example $20. per billable hour no matter what you do? or
Water heater replacement $75. commission.
Water heater change elements, T-stats $25. commission.
If I am plumber wanting to make the most money, I may push a replacement rather than a repair. This is what I envision with commission.
EXACTLY :thumbup:I worked at a commission paying company for three years before I went on my own. It taught me to be motivated to sell, and bust my butt for my money. Useful skills for running my own business.
The downside however, was that SOME techs WERE ripping people off and charging as much as humanly possible on easy calls just for the highest commission they could get. I don't really blame the commission, I blame the old boss for not keeping a closer eye on what the techs were doing, all he cared about was how big their numbers were....even if the numbers were big from deceptively scamming the customer a bit.
Because of that, I would be careful putting plumber employees on commission. There would have to be some relationship and trust built between us before I did that.
There is a way to motivate hourly employee's to be efficient, and it avoids the pitfalls of over billing customers. If you are flat rate, you have a good idea on how many hours every job should take for simple repair or replace, so if a guy bills out ten hours worth of work in eight hours, give him an incentive payout for those two hours, not his hourly wage, but a rate the two of you agree on.This is interesting to me because I believe I am on the verge of putting my second truck on the road and I am more than a little concerned about who I will put in that truck.
My thinking is that an hourly employee has no incentive to sell anything or even to get the job done in a timely fashion. If it's August and a gazillion degrees outside and the house he is in has nice cold a/c and a nice lady offering him iced tea, why does he want to complete the work (on hourly) in a timely fashion knowing his next stop could put him outside somewhere hand digging for a leak in a water service?
I am a one man shop so I run all calls. When I come across techs from other companies say at the supply house or something, I will generally make a point of speaking to them. This is not for the sake of being friendly necessarily. I am generally trying to get a picture of their company and how they operate. I have talked to both hourly and commissioned techs and clearly their are problems both ways. I have had hourly techs display attitudes such as the example above. I have had commissioned techs tell how they really stuck it to someone or how their pricing changes according to the address or the value of the automobile sitting in the driveway. I do not want either of these scenarios. I feel like I would prefer to pay straight hourly but from the techs point of view, what's in it for him? Especially if it's 3:30 pm and he'd rather go home than sell something. I am not afraid to sell something and I do it without twisting arms or lying. Usually it is a simple matter of offering the customer options, but why will an hourly tech do this? What's in it for him? On the other hand the tech making commission is going to find himself having to deal with the temptation that PlumbCrazy is talking about. Or maybe there is no temptation at all because he is a sociopath without a conscience. These kind of people can do irreperable damage to your company. To top all of this off it seems pretty darn difficult to simply find warm bodies that are competant in their plumbing skills, communication skills, can pass a drug screen, and will show up to work.