I appreciate all the input so far. I know that this varies quite a bit depending on the specifics of the gig. I would definitely pay more to someone performing an A1 duty versus just a generic crew member. I'm just trying to avoid a situation of sour grapes on my crew when the guy that's been working the same gig for me for years realizes he's making the exact same amount as the guy that's out on his first job and under direct supervision, despite the fact they're doing the exact same thing...or...the new guy being upset that he's making less than the more experienced guy despite the fact they're doing the exact same thing... In this specific case it's unloading trucks, moving heavy equipment, cutting/nailing lumber, etc. Not exactly skilled labor, but much more than I can handle on my own. Thanks again!
(I can see my reply factoring more on Nathan's "
Business Minded Questions" thread already.
)
I'm going to try and start at the top of the thread, and start with Jeff's OP. Now, you have two ways to look at your business structure here: Do you pay a person based on their rate of pay, or the position they are filling? The caveat is that you want to ensure that your client billing is always consistent/slightly increasing each year for COLA.
Let's dive down into this...
If you're paying based on the position they are filling, your pay structure might look like this:
Position -- Client Charge -- Crew Pay
A1 $450 $350 (based on a 10 hour work day)
A2 $400 $300 (based on a 10 hour work day)
Stagehand $30/hour $20ish/hour
That way, you bill the client that rate, you pay the crew that rate, regardless of the skillset of the person filling the role. The challenge here: If you need a stagehand for a show, and that's what you're billing to the client, and the only person you have available is one of your A1s, (s)he's probably not going to be tickled pink to take a job paying $22/hour when they could be making $40/hour working A1 somewhere else. Now it's going to be difficult to reliably staff your shows.
Side note: Pay rates should
always be confidential. Sure, the crew will talk amongst each other, but make sure you're not disclosing to any of your team members what someone else is being paid, or even "Well David makes more than you, so (insert action here that you're taking to save money)."
The other way is paying someone based on their rate of pay. This is like any other job: "Hi nice person, I'm hiring you to do this creative/laborious thing. I'll pay you $20 per hour. Would you like to accept employment with me?" Then, on a regular basis, as their skill set increases, they gain experience with you and your company, or they're adding increased value to your company as an employee, you offer raises (and potentially bonuses). So, maybe I hire David for $20 per hour, and he makes that, regardless of what he's doing for me. He might be here at the shop, helping to prep trucks. He might be delivering a generator to Seattle. He might be helping load in and run a show at the local exhibition center. Either way, he's making $20 per hour, as long as he's on the clock. I'd give him quarterly or semi-annual performance reviews and pay raise. So maybe in 3 months, I give him a review, "Hey, you're doing great here, but I'd like to see you accomplish THIS in the next 90-120 days, but here's another $2 per hour."
There's a bit of a balancing act there- some days, he might be working a show that we're charging the client $400/Day Rate for him, and he only works 5 hours. But, another day, he might fill the stagehand role, where we're charging the client $30/hour for, and ends up working 15 hours, and we only budgeted for 10. Now we've lost money after payroll expenses are factored in. And something else: Unless you're prepared to always offer day rates to the team (expecting that someone can't leave work from you and pick up another gig that same day- they've probably blocked out the day for you), you do want to make sure you're keeping your guys working enough hours that they're going to be responsive to your needs.
Anyways, back to the shows. So then I send Andrew out to help David. Andrew's new, and thus he just started at $13/hour. He's working side by side with David, and doing a lot of the same things, but David's in charge, has a longer experience, and therefore is making more money,
even though they're doing the same thing. David has the supervisory role in that case. Andrew would also have the opportunity to receive a review and raise at regular intervals. And, if he works hard, and maybe demonstrates a rapid growth in job knowledge, customer relations, etc, he might move up the pay scale faster than David did at the same time.
Then there's Tyson. Tyson works only at the shop, picking shows/loading trucks. He doesn't want to go out and do shows. He really doesn't want to move up in the organization- he's perfectly happy where he's at. No responsibility, no stress, free beer. He gets those same reviews, but the pay increases would be more reflective of COLA ("cost of living adjustment") and less of merit-based. He's getting paid more because life's f'ing expensive, not because he's doing anything AWESOME and out of the box to earn it.
Disclaimer: Two of these people are real, but the rates of pay are not. One's fake, although the name's been used as my fictitious sales manager. Woo hoo! Some of the events described happened this past weekend. Haha. Takeaway: Every employee is different. It sucks, as a manager/owner, to have to consider every person differently, but that's how it should be done.
And once again, rates of pay should remain confidential. I always recommend counseling employees to not discuss them. "Nothing good will come of that," you can say. "What if you find out someone's making way more than you are? You might be pissed. Or, if you tell someone about how much more you make than they do. Now your working relationship will be damaged, if they potentially lose respect for you. Let's just keep it to ourselves."
I'm just trying to avoid a situation of sour grapes on my crew when the guy that's been working the same gig for me for years realizes he's making the exact same amount as the guy that's out on his first job and under direct supervision, despite the fact they're doing the exact same thing...
Well, if it's what that ROLE pays, then that's it. If your stagehand position pays $18/hour, then whoever does it gets paid that. But, if you're doing the individualized rates of pay, and a new guy got hired on for the same as a tenured tech, then I would wonder about that as well. "Why is this other cat not getting pay raises?"
...or...the new guy being upset that he's making less than the more experienced guy despite the fact they're doing the exact same thing...
Enter comments about ROP remaining confidential. And if need be, you have the discussion-- "Everyone gets paid their ROP. You might be making more or less then a co-worker, and doing the same thing, but there's other intangible factors that come into play. I reward hard work, loyalty, and tenure, so you can be assured that as you gain experience with us, you will receive regular performance reviews and pay raises.
ALL OF THIS IS PREDICATED...
on you correctly treating your techs as employees. If it's a freelance/1099 situation, then regular reviews, raises, blah blah blah can all be thrown out the window. In that case, I'd expect to be negotiating on a show-by-show basis with my labor. And, in my mind, that's a bunch more work that's not needed. I prefer to know what someone is going to need for pay, prior to me offering them the job. Then I can quote to the client well. I know I can call Aaron, and he'll charge me $400/day rate (OT after 10HRs). Pretty much regardless of what the needs are. And he's damn well worth it.
In this specific case it's unloading trucks, moving heavy equipment, cutting/nailing lumber, etc. Not exactly skilled labor, but much more than I can handle on my own.
I'm venturing into this field, finally. I've traditionally done a majority of the shop work (gear prep, QC, truck loading, etc) myself, with an occasional assist from my dad for stacking things. But, I kill my body doing that, so have started strategically using extra help from one of my guys. Now, I have to be careful since that labor isn't included in my show labor charges. In other words, that money is coming out of the gear rental charges. In the future, I need to either make sure that our show labor charges include the shop work, or accept that I'll be paying "out of pocket" for this extra work.
An aside: I value show work higher. So, one of my guys that's been helping me lately, I pay him more for show time then I do shop time. This goes against EVERYTHING I've talked about just now, but since I have just started this, I need to make sure I don't shoot myself in the foot with a lot of extra payroll costs for shop work. I'm going to try and balance it out, but for now, I'm screwing my guy over.
But, he got hot tub time yesterday, so that made up for it!
-Ray
