Jobs, and their Creation
October 17, 2012 12 Comments
OK, this election cycle we’re talking a lot about jobs. Unless you’re an employer you most likely have no idea how we decide to create a job. While every business is different, we all do something similar to this when we are thinking about adding people. Here I’m going to talk about adding a journeyman electrician because that’s the lowest I can employ in the field without supervision. Note that this implies that I’m also going to hire at least one apprentice as well, there are few jobs that can be done efficiently in the field with one man, some but few.
This is a very general guide to what it costs to put a crew on the road. To cover the cost to the organization of complying with regulations, other taxes, training and other overhead costs, plus enough profit (10-15%) you need to double these figures.
|Item||Cost||Cost/hr min.||cost/hr max||cost/year min.||Cost/yr/max|
|Apprentice electrician each||$10.00||$20.00||$20,800.00||$41,600.00|
|Consumables (bits saw blades etc)||$300.00||$300.00||$1,800.00|
|Fuel/vehicle maintenance etc.||$31,200.00||$31,200.00|
|Inventory on truck||$1,200.00||$1,200.00||$1,200.00|
As I said, these are very general, in the real world I would have far more information such as residential or industrial, service, or construction, there are a lot of variables, including where you are based, my costs for some things here are lower than the cities but higher in others. But that is basically what we look at. Also note that fuel costs are over $30,000 dollars per year, like yours, that number has doubled in the last four years.
The other thing is, if I don’t have at least 6 months of work on the books for that crew, and a full year is much better, I just see if my guys will work enough overtime to get things done, or I will try to subcontract or I’ll drop jobs. But essentially I need $300,000 to $600,000 worth of work to comfortably add a crew. and everything else flows from this, if I am not adding crews, there is no reason for me to hire office staff, or new computers or anything else unless it’s broken.
Another problem right now is, those costs per employee that have all that slop in them, I have only the vaguest idea of what they’ll look like next fall and that makes me even more cautious than usual.
Oh, and did I mention that it is nearly impossible for small business to borrow money right now. All that equipment above, about $60,000 worth, and you’ll find that almost always it’ll be higher, often much higher, I must have the money to pay for it, and it isn’t in my mattress after four years of recession or stagnation or whatever Mr. Obama has given us. In my opinion the word is depression, by the way.
Creating jobs for me remains in the realm of a fantasy until the economy is growing again, right now all sectors of my business are flat or worse, some are all but shut down now, and I cannot see how any are going to be better before next summer at least.