Dollars per Man Hour

I'm out of that loop. My last calcs were only for surveying in 2006. We charged 125hr for 2 man crew, 90 for surveyor and 45 for tech. I've been in the field away from those administration issues (thank god). I'm sure prices went up.

The way I figure it:

Hourly wage of employee

All Overhead (equipment costs, office, utilities, supplies, etc.)

How much you want to make?

How many billable hours can you realistically charge for the year?

Add all above and that will give you total hourly wage

I must not have been clear.

I'm not talking billable hours worked, but total combined hours worked of every person in a company; survey member, party chief, cad tech, manager, clerical, researcher, accounts receivable, accounts payable, secretary, sales people, etc, etc etc.

combine all hours worked divided into the total invoices billed

You were clear, but I only dealt with Surveying. The rest was always some administrator number cruncher. We gave our costs to them.

I'm not sure we ever thought about it that way when I was involved in budgeting for an 8-10 crew firm. The important ratio for us was that the billing rate for chargeable field and office personnel needed to be around 2.5 - 2.8 times the actual wage rate to be profitable. ($40.00 per hour wages for a two person crew bills at $100 per hour.)

I'm trying to figure out what your results would tell you, and my guess is that since the fixed rate positions (secretary, accountants, estimators, etc.) would probably pay less on an hourly basis than the billable positions, (field crew, office CADD and LS billings), that you would want a higher hourly rate in your answer. More work = higher hourly rate average. Little or no work = lower hourly rate average.

It's interesting; I'll follow along.

You get paid to do this? Wow, talk about living the dream!

Brad,

I've been involved with small (6-20 employees) land surveying companies the last 30 years, and I have never considered this number, until recently.

Case in point; we were engaged to conduct an ALTA survey that was an hour drive away from the office. The Crew traveled to the site four separate times, thus spending 8 hours in total travel time in the truck or 16 Man Hrs (two man crew) not working. But yet the company had to pay the crew for that 16 hrs.

This got me to thinking about Man Hours, I then totaled up the total amount of time, including clerical, client contact, bid proposal, field, cad, tech, management, research, supervision, etc. etc.

Dollars per Man Hour on that project was $42.50+/-

My response was WTF! - This isn't good!

Then I gathered the numbers for Year-to-Date figures for the company and to my surprise the Dollars per Man Hour is about $45 ---- Major WTF!!!

I'm thinking this is really, really bad.
But without comparing apples to apples, I don't know.

I'm assuming that this number would be near the bottom of the curve, but without others telling me where they are, I have no idea.

> Brad,
>
> I've been involved with small (6-20 employees) land surveying companies the last 30 years, and I have never considered this number, until recently.
>
> Case in point; we were engaged to conduct an ALTA survey that was an hour drive away from the office. The Crew traveled to the site four separate times, thus spending 8 hours in total travel time in the truck or 16 Man Hrs (two man crew) not working. But yet the company had to pay the crew for that 16 hrs.
>
> This got me to thinking about Man Hours, I then totaled up the total amount of time, including clerical, client contact, bid proposal, field, cad, tech, management, research, supervision, etc. etc.
>
> Dollars per Man Hour on that project was $42.50+/-
>
> My response was WTF! - This isn't good!
>
> Then I gathered the numbers for Year-to-Date figures for the company and to my surprise the Dollars per Man Hour is about $45 ---- Major WTF!!!
>
> I'm thinking this is really, really bad.
> But without comparing apples to apples, I don't know.
>
> I'm assuming that this number would be near the bottom of the curve, but without others telling me where they are, I have no idea.

6th,

Certainly all the extra travel time (and it gets even harder with per diem, etc.) costs more, but remember, a lot of the costs on an out of town job are still fixed costs, that don't change much despite the crew traveling out of town.

We added to the complexity by bidding Caltrans jobs hours away from San Diego into Orange County, L.A. County, Riverside, etc. Essentially, we just developed an increased hourly rate for "bid proposal" purposes as well as a higher billing rate for additional work billed hourly. But most, if not all, of the overhead stayed nearly the same. Vehicle maintenance cost increased, but in-house calcs., rent, and payroll costs didn't.

BTW, I don't know about other areas, but by San Diego standards, 6-20 employees at a surveying only company is a pretty good size. (When we had 10 crews, as the lead estimator, I worked most Saturdays for about 3 years.) I like money as much as the next person, but I sometimes wondered where the heck is the end of this tunnel?

Have you seen "2011 A/E Financial Performance Benchmark Survey" by PSMJ?

at http://www.psmj.com/surveys-and-benchmarks/benchmark-surveys/32-benchmark-surveys/511-2011-ae-financial-performance-benchmark-survey.html

I believe their number is something North of $150K/employee/year which comes out around $75/hour

> Brad,
>
> I've been involved with small (6-20 employees) land surveying companies the last 30 years, and I have never considered this number, until recently.
>
> Case in point; we were engaged to conduct an ALTA survey that was an hour drive away from the office. The Crew traveled to the site four separate times, thus spending 8 hours in total travel time in the truck or 16 Man Hrs (two man crew) not working. But yet the company had to pay the crew for that 16 hrs.
>
> This got me to thinking about Man Hours, I then totaled up the total amount of time, including clerical, client contact, bid proposal, field, cad, tech, management, research, supervision, etc. etc.
>
> Dollars per Man Hour on that project was $42.50+/-
>
> My response was WTF! - This isn't good!
>
> Then I gathered the numbers for Year-to-Date figures for the company and to my surprise the Dollars per Man Hour is about $45 ---- Major WTF!!!
>
> I'm thinking this is really, really bad.
> But without comparing apples to apples, I don't know.
>
> I'm assuming that this number would be near the bottom of the curve, but without others telling me where they are, I have no idea.

You're separating driving from surveying? Not good. Driving to the job is part of the job, i.e., you can't survey without driving. See my original post. You can look at driving to job as overhead and actual surveying as billable hours. My system is much simpler and honest.

>
>
> You're separating driving from surveying? Not good. Driving to the job is part of the job, i.e., you can't survey without driving. See my original post. You can look at driving to job as overhead and actual surveying as billable hours. My system is much simpler and honest.

TC - With all due respect, I don't care about billable hours, I'm talking about the number of hours it takes to operate a company, which includes those hours worked by personal who are not directly billable.

If it takes 10 people to run a company. That's 80 man hours per day.
4 of those are field personal, 2 Cad, 1 LS/survey manager, 1 office assistant, 1 secretary, 1 salesperson.

I don't car about overhead, in the way you are looking at it. I'm looking at what it takes to run a firm, by total hours needs to operate vs the total dollars billed. In doing so, I'm able to quantify viability by a single factor or number.