IF I OFFERED YOU $50,000 a year salary, guaranteed by a cash bond, to do nothing but come over to my house and daily clean up my dog's droppings from my backyard, would you accept my offer? You wouldn't be able to sub the work out; it would have to be you and you alone. Except for every other weekend and major holidays off, your sole job would be to be clean up after my dog in my yard. Fifty thou' a year would buy a lot of beer for a job that couldn't be easier.
So, would you take it? No? What about $75,000, $100,000 or $150,000? Still no? What about a cool $250,000 to become the highest paid dog pooper-scooper on the planet? Am I starting to hear a "yes" or at least a very strong "maybe?"
My point is, unless we're independently wealthy and we're in this profession just for the love of it and for no other reasons, then we all have our price. That doesn't mean we don't or can't enjoy our jobs. It just means we need to work to live since most of us in this crazy profession of ours live to work. With that fact comes the hard realization sometimes that we must earn for our employers at least as much as we cost them or we don't have a job.
How much do we need to earn for our bosses in order to keep our jobs? I like metrics to measure both real and intangible processes, so let me offer this new metric:
As long as your salary is typical of the national average, generally above $50,000 but less than $100,000, you need to earn for your employer $1 per minute of your business day or they're losing money on you.
One dollar, one buck, one greenback ... it's not worth what it used to be but it's still a definable unit of compensation, especially when you think about the fact that every minute of every business day, you need to put $1 into your company's accounts receivable or you're not pulling your weight.
For those who are not math majors, that's $124,800 per year, or $1 times 60 minutes times 40 hours times 52 weeks equals a cool $125,000 a year that you need to generate to make your $60K, $80K or thereabouts. Then you have to cipher in all your company benefits, employer's share of taxes, FICA, Medicare, medical benefits and your share of the company's overhead to keep you in that truck with your laptop and a Nextel on your hip.
You'd be surprised at the number of puzzled looks I've gotten when I've presented my brethren with this dollara-minute concept, colleagues who obviously know math and business since they administer and manage contracts all day long.
You'd also be surprised at how many click on this concept and their first reaction is to go and ask for a raise immediately. My quick advice on that is don't do it.
If anything, you need to concentrate on increasing your own productivity to be able to do more jobs over a calendar year and put more net revenue in your company's coffers to further enhance your job security. Don't worry about your percentage of gross or take-home pay as it relates to current or future billings. The more contracts you execute and the more money you bring home to your bosses, the better your chances become for your own future financial security.
Yes, this is just common sense, but it's common sense that's metric-based on a concept we all can "get our heads around" and of which at least some of us needed to be reminded of from time to time.
Most of us have at least some bonus package that's based on net job profits over a certain percentage. It's also important to tie in total productivity per job minute, hour or day with net job revenues (buyout price minus selling price) to see how actual job time relates to bonus check revenue, depending on the kind of jobs you normally manage.
Generally, the larger the job, the worse productivity scale you'll have and, frequently, the smaller your bonus. This is because larger jobs have more potential pitfalls that are out of your personal control. Smaller jobs that turn more quickly with hypothetically less labor cost and higher, lessrisky equipment costs will show more revenue per labor-minute and a higher net profit, which will affect both your bonus and, just as important, the perception that you're churning the bucks efficiently.
Whatever your actual salary and benefits, and bonus plan you may have, in this day and age our profession changes rapidly, so it's important to keep your eye on the ultimate prize — your career success and longevity.
My thanks to a now-forgotten salesman who stopped by my office long ago and taught me this concept that I've just told you about. If he's still in the industry and will identify himself publicly, I'll make sure proper credit is given.
H. Kent Craig is a second-generation mechanical contractor and project manager with unlimited Master's licenses in boilers, air conditioning, heating and plumbing. He can be reached by calling 919/291-0878, or via e-mail at [email protected]. His Website is www.hkentcraig.com.