We don't like to publish anonymous stories however it is understandable why this repairer doesn't want to be identified. Have a read of the following and let us know your views.
To those repairers who are about to play with a realistic times guide with insurers and don’t understand your business.
Take a look at this information and think about your own business.
It is rumoured that at least one insurer is offering rates in the $50.00 - $60.00 range, at least funny money, funny time has some flexibility about it, but under the new real times guides there will be none.
You will go broke very quickly if you accept a deal based on real time and funny money scenario. You don’t even have to be smart to work it out.
Just grasp the following numbers.
$1500.00 per week is average today for a panel beater. Not a lot for a person that has all of the skill and training to repair the modern motor car.
Annual income @ 1500 per week 78,000.00
4 weeks annual leave with 17.5% loading 7,050.00
superannuation contributions @ 9.5% 7,410.00
2 weeks sick leave 3,000.00
The hourly cost for the panel beater is approximately $ 50.00
This does not include the items listed below;
rent
electricity
gas
phones
stationary
advertising
administration
car cleaning
long service leave entitlements
Now that figure is the is the amount per hour for the guy to be standing there. I will bet you my house that he does not give you a full 7.6 hours with of work every day. In fact if he is 85% efficient (literally meaning earning you an income) which is unlikely, then his hourly rate turns into approximately $ 57.00.
Panel beaters must also move cars, clean up, find parts, go to the toilet, have morning tea breaks (about 62 hours per annum) and generally lose time during their time at work, transferring between jobs.
So, if you are a repairer and accept these types of deals, you are just kidding yourself and your business is basically dead and really only just turning the till over.
If you’re an insurer, you should be ashamed of yourself and should dig deep into your conscience.
Even the consolidators with their efficiencies, sound procedural systems and economy to scale won’t make it.
Wayne Phipps of Wayne Phipps Smash Repair in WA responded to this story with his own calculations saying "In response to anonymous. You are on the right track, but this is how I see it."
Let us know if you agree.
Available Chargeable Hours
Average tradesman works 37.5 hours per week
Gross working time = 52 weeks x 37.5 hours = 1,950 hrs
LESS 4 weeks annual leave = 150 hrs
LESS 2 weeks public holidays = 75 hrs
LESS 2 weeks sick leave = 75 hrs
LESS tea break 0.25hrs x 5 days x 44 weeks = 55 hrs
LESS cleaning 0.5hrs x 5 days x 44 weeks = 110 hrs
LESS setup of 0.5hrs x 5 days x 44 weeks = 110 hrs
LESS unproductive 0.25hrs x 5 days x 44 weeks = 55 hrs
TOTAL AVAILABLE CHARGEABLE HOURS = 1,320 HRS
(per year, based on averaged information gained from the industry)
A Tradesman’s Costs
Average Tradesman earning $1,500.00 per week:
x 52 weeks per year = $78,000
Leave loading – 17.5% of $1,500 x 4 weeks = $1,050
Long service leave = $1,300
Superannuation @ 9.5% = $7,410
Workers Compensation @ 3% = $2,340
TOTAL COST TO EMPLOY A TRADESMAN = $90,100
(based on averaged information gained from the industry)
Tradesman Cost Per Hour
Average tradesman works 37.5 hours per week:
Total cost of tradesman = $90,100
Total available hours per tradesman = 1,320 hrs
Divide Total costs by available hours:
It costs $68.26 per hour, just to cover the tradesman’s wages.
This does not include any staff training allowances.
Available Chargeable Hours
Average tradesman works 37.5 hours per week
Gross working time = 52 weeks x 37.5 hours = 1,950 hrs
-
LESS 4 weeks annual leave = 150 hrs
-
LESS 2 weeks public holidays = 75 hrs
-
LESS 2 weeks sick leave = 75 hrs
-
LESS tea break 0.25hrs x 5 days x 44 weeks = 55 hrs
-
LESS cleaning 0.5hrs x 5 days x 44 weeks = 110 hrs
-
LESS setup of 0.5hrs x 5 days x 44 weeks = 110 hrs
-
LESS unproductive 0.25hrs x 5 days x 44 weeks = 55 hrs
TOTAL AVAILABLE CHARGEABLE HOURS = 1,320 HRS
(per year, based on averaged information gained from the industry)
A Tradesman’s Costs
Average Tradesman earning $1,500.00 per week:
-
x 52 weeks per year = $78,000
-
Long service leave = $1,300
-
Superannuation @ 9.5% = $7,410
-
Workers Compensation @ 3% = $2,340
TOTAL COST TO EMPLOY A TRADESMAN = $90,100
(based on averaged information gained from the industry)
Tradesman Cost Per Hour
Average tradesman works 37.5 hours per week:
-
Total cost of tradesman = $90,100
-
Total available hours per tradesman = 1,320 hrs
Divide Total costs by available hours:
It costs $68.26 per hour, just to cover the tradesman’s wages.
This does not include any staff training allowances.