“Why you CAN afford to hire a Carpentry Student right now!”

Posted by: Michael Barbarita, CFO at Next Step with Asher Nichols, owner of Asher Nichols & Craftsmen, and Director Chair of Workforce Development Committee

 

From a financial point of view, it makes perfect sense.

*How many times are $30 to $40 per hour carpenters doing mundane nonbillable expected or unexpected tasks much lower than their skill set, and it slows the progress of the job?

*How many times do you forget materials or have to run out to the hardware store to pick up materials that were discovered to be needed and all you have is $30 to $40 per hour carpenters to do it?

In the construction business, our job is to get jobs done as quickly as possible with high quality, while staying within the estimate and ultimately delivering more than the customer expects. This is a tall order, and any strategy that can assist in accomplishing this end must be considered.

Let’s demonstrate how a Carpentry Student can save you money, even paid @ $15/hr.

Keep a $15 per hour Carpentry Student busy for 40 hours in a week with non-billable but helpful and necessary tasks. Remember, these are tasks that the $30 per hour carpenter would have done if the Carpentry Student was not available. With the Carpentry Student, the $30 per hour carpenter is now available to perform 40 more billable hours. This gets the job done 40 hours faster. Even at a billing rate of $70 per hour, which is lower than most quality construction companies would charge. That is the equivalent of billing an additional $2,800 while the 40 Hours of work performed by the Carpentry Student cost you an additional $600 plus payroll taxes. You might be saying, “great, but didn’t I just pay $45 per hour plus the payroll taxes for the Carpentry Student and the burden for the carpenter?” Yes, but let’s look at it from the other side. If there was no Carpentry Student and the $30 per hour carpenter performed the 40 hours of non-billable tasks, how much revenue did the company generate? The answer is Zero, and the job took longer, and how much cost did the 40 hours of non-billable activity add? The answer is 40 hours times $30 plus burden….. Not to mention the extra time the job now takes.

What if you are already over your estimate? Once again, the Carpentry Student can fill in and do the lower-skilled tasks freeing up the $30 per hour carpenter to put more time into the job getting it done faster and getting you out of there.

Let’s do a mini P & L to illustrate the above example:

With a Carpentry Student working 40 hours on nonbillable expected or unexpected tasks

Line Item

Hourly Wage

Payroll Taxes

Estimated Burden

Per Hour

Hours

Amount

Sales

$70.00

40

$2,800.00

Cost of Carpentry Student

$15.00

$1.50

0.00

$16.50

40

660.00

Cost of Carpenter

$30.00

$3.00

12.00

$45.00

40

1,800.00

Profit

$340.00

Without help from a Carpentry Student, one of your Carpenters working 40 hours on nonbillable expected or unexpected tasks

Line Item

Hourly Wage

Payroll Taxes

Estimated Burden

Per Hour

Hours

Amount

Sales

$ 0.00

Cost of Intern

$ 0.00

$0.00

$ 0.00

$ 0.00

40

0.00

Cost of Carpenter

$30.00

$3.00

$ 12.00

$45.00

40

1,800.00

Loss

($1,800.00)

A savings of $2,140.00 and the job was done quicker!!

But WAIT, there’s more!!! You will get more jobs done and over a period of a year that will add up to more revenue and profit. 

The EM NARI Workforce Development committee is working to create links between schools, NARI members, and students to create work-based learning opportunities that complement the classroom lessons. There are a number of ways we connect from job site tours and classroom presentations to internships and the program capstone – the co-op experience. At NARI we are working to identify more members whose business practices are in line with our program standards for hosting students. To learn more about how to participate in the program, contact me!

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