Employers

[mfgs]

I have had different full time subbys working for me for the past 3 years or so now. I keep debating whether to actually take on a full time employee properly. I eventually want to expand my business so that I can just take a managerial role, although I know this wont be an easy task, but to do this I think it would be better to have full time employees rather than contractors.

Those of you that employ people, how much extra on top of their hourly/daily rate do you find it costs you? Taking into account pensions, holidays, van etc? I am trying to work out if it is feasible.

 

[joni os]

Assume the cost will be double the gross wages, plus cost of van. and don't employ anyone who might get pregnant. The benefit of subbies, if they make a mistake there's a chance it will be put right at their expense. With employees, you pay them when they make the mistake, you pay them to correct the mistake and they still think they are being exploited.

 

[hammers4spanner]

Don't they get time served payments now as well ?

Never seems worth it to me.

 

[mfgs]

Assume the cost will be double the gross wages, plus cost of van. and don't employ anyone who might get pregnant. The benefit of subbies, if they make a mistake there's a chance it will be put right at their expense. With employees, you pay them when they make the mistake, you pay them to correct the mistake and they still think they are being exploited.

Surely it cant be double plus the van, that doesn't seem right. If that was the case then no small plumbing firm would be able to take anyone on without charging extortionate rates.

I agree that subbys are a safer option which is why I have been going down that route so far, but they can also be a real pain.

 

[joni os]

Surely it cant be double plus the van, that doesn't seem right. If that was the case then no small plumbing firm would be able to take anyone on without charging extortionate rates.
.

That's why what customers think are extortionate rates are actually realistic. Check with others, I gave up direct employment many years back, with increased holidays and pension contributions things may be even more expensive.

 

[mfgs]

Thanks for the input, the reason I asked the question is because I don't know the answer. You obviously have experience in the past with this. I had it in my head it would cost 1.5x the employees wages including a van. Albeit not a brand new van, but paying it off and running costs. So paying someone 30k a year would actually cost me 45k.

 

[Ray Stafford]

From a pure arithmetical perspective, your on-costs are:

13.8% employers NI
Min 4 weeks paid hols + 8 x paid bank hols = 9.3%
Sick pay - depends on how you handle it, but 2.5% is a reasonable average.
Then there is the cost of providing PPE and any required training.

On that basis, 1.5 x salary + vehicle is probably not unreasonable. However, the 2 x salary + vehicle is a figure I have seen many times before, and I believe it includes factoring in recruitment costs, termination costs, and the time that you spend on management and supervision. I suspect that it is a little high, but not excessively so.

I have made the point in several previous postings that in my experience, once a tradesman has made the decision to employ staff, it makes sense to have a business plan that gets you to 5 staff as fast as possible. Thats because it takes 5 employees on the tools to keep one boss/manager. It is much harder than you think to work on the tools yourself, and manage staff at the same time.

The only other thing I would add is that management is a set of skills that have to be learned, just like any other skill-set. You were not born as a skilled plumber, you invested time and effort in gaining your skills. Time and effort invested in management skills is equally rewarded by improved performance.

 

[Chalked]

I used to have 7 full time employees. This did not make me a full time organiser. For one it didn't make enough to pay me to not be on the tools and tbh, I had good lads and the bookwork, organising, didn't take a full week. Maybe three days. So I did all the small jobs and the ones that were not in a hurry .

 

[joni os]

Adding to above: Your employees will not be earning for you when on holiday, so 4 weeks plus 8 bank holidays equates to 5.6 weeks leaving 46.4 weeks to earn. The % for holiday is 5.6/46.4 times 100. Comes to a little over 12%.
Public Liability will increase with turnover and Employers Liability cannot be avoided.
If not already a limited company become one. The price of your enterprise should not be the loss of your home.

 

[Ray Stafford]

I used to have 7 full time employees. This did not make me a full time organiser. For one it didn't make enough to pay me to not be on the tools and tbh, I had good lads and the bookwork, organising, didn't take a full week. Maybe three days. So I did all the small jobs and the ones that were not in a hurry .

You must have had good lads there Paul to not be run off your feet either getting work or supervising quality, or the other management tasks.

 

[Chalked]

You must have had good lads there Paul to not be run off your feet either getting work or supervising quality, or the other management tasks.

Probably why I slimmed it back. Too too much on myself and didn't delagate enough.
But must say, get good staff. I had guys who needed very little organising. They just needed pointing to the job. Most were in house apprentice trained.
Pay well, treat them well and they will look after you.

Back to the op. Two employees won't make enough for you to just organise.

 

[mfgs]

Thanks for all the input its been very helpful. I just need to work out what route to go down at present, persist with subbys or employ someone on the cards. I believe finding the right person would be key, especially being the first employee.

Or try and get a good full time subby and an apprentice on board and try and train up the apprentice. This is something I would very much like to do, I have just struggled to find the right apprentice!

Ideally my aim would be to try and get 3 guys working for me and then I just pick up the excess work while focussing mainly on the business side of things. Whether that would work out financially or not I am not too sure.