Staying Afloat in 2010
“I’ve never seen it like this.”
“We’ve cut everything to the bone.”
“We’re bidding 25 jobs just to get one.”
That’s what we heard during World of Concrete 2010 in February. We probably talked to 200 masonry contractors this year, and they are all working as hard as they ever have. So why were they taking time off from work and spending their hard-earned dollars to come attend World of Concrete?
“I’m here to get an edge on my competition. I’m going to survive this thing.” This was the way a mason contractor from Iowa put it.
Without exception, the men we talked to are digging in and willing to do whatever it takes to keep afloat during this downturn, and come out stronger when it’s over. None of them is giving in. They are all searching for ways to get the job done at a lower cost.
Another contractor from Kentucky said it best: “Right now, the company with the lowest labor cost wins, period. And, the only way you get there is by putting more brick in the wall cheaper than the other guy.”
Understanding costs is the key
Neither you nor your competitors can cut any materials out of the job. You both pay about the same. The only job cost you really have any control over is labor. The first step is to know your bricklayer cost. Hourly cost varies widely from $29 an hour in Texas and the Carolinas, to $57 an hour in the Northeast and parts of California (that’s your cost, not his net pay). Based on a 160-hour month, it costs you $4,640 to $9,120 per month to put one mason on the wall. That works out to $55,680 to $109,440 per year. The next step is to get maximum efficiency from your existing crew.
There’s no arguing the fact that crank-up-type scaffolding increases production by at least 20 percent. Even life-long frame users agree; they’ve just been put off by the perceived cost. The extra production comes from removing the reasons bricklayers have always worked slowly on frames: stopping repeatedly to hop planks to the next level, working slowly around their ankles and their shoulders, and reaching high and low for materials. Slow bricklayers are not the problem. Making them work fast on frame scaffolding is the problem, because it can’t be done.
A U.S. governmental study showed that keeping masons waist-high to the wall, keeping their materials at the same height, and eliminating the frequent stopping and starting during the day naturally increases the number of units going in the wall a minimum of 20 percent, and, depending on the type of material, sometimes a lot more. They’re not really working faster, just continuing to lay brick during the time that used to be downtime, or slow time, on frames. Laying at an ergonomically correct height all day gives even more extra production. It’s amazing how fast even average bricklayers become when their backs don’t hurt.
Higher efficiency shortens job duration
If your bricklayers are putting in 20 percent more units, you can finish a 100-day job in 80 days, with the same crew size. Twenty days worth of labor money for the entire crew turns into additional profit earned.
What does a 20 percent production increase do to your profit, increase it by 20 percent? No. Amazingly, it doubles your profit! Here’s why: In the average masonry bid, the labor number is typically five times higher than the profit number. A 20 percent reduction in labor saves an amount of money equal to the profit. Since the contractor gets paid the bid price regardless of how much he pays out to his men, any labor money not paid out flips over to additional profit earned.
Should you buy labor-saving equipment in this economy?
Because masonry work is so labor intensive, the answer is “yes.” It’s all about the payback time, and one of the biggest surprises for the contractors at the show was the short payback time for elevating scaffolding. For the crank-style scaffolding, the payback time can be anywhere from three to six months, depending on your pay scale. For the new, smaller scaffolding for short walls (See sidebar), it can pay back in as little as six weeks.
A contractor in Texas who invests in $50,000 worth of elevating scaffolding can have his money back in less than six months. His eight-bricklayer crew will produce just as 10 or 11 bricklayers would on frames. He saves about $9,300 a month in real dollars he used to pay out to two extra masons on frames. On future projects, he can keep the leftover labor money for himself, or use it as an edge to be competitive at bid time.
It turns out that no other piece of masonry equipment can reduce labor costs as much as elevating scaffolding. One manufacturer even offers a rent-to-own plan structured so the scaffolding pays its own way until it’s paid off. The fast payback time means it’s definitely a good buy when times are tight. This is when mason contractors need a competitive advantage the most.
Paying for itself, over and over again
Once the scaffolding has paid for itself (in a few months), you can use your higher production advantage for a competitive edge. A 10-mason crew on elevating scaffolding puts in more units than 12 masons on frames. That means the contractor on elevating scaffolding is paying out $9,280 to $18,240 less per month for labor. That’s a significant competitive advantage over anyone working on frames.
Jimmy Alvey, past-president of Texas Masonry Council and the United Masonry Contractors Association, has worked for three of the largest masonry firms in Dallas. All of them use elevating scaffolding. He says, “In good times, we always made excellent profits. In slow times, we could be competitive and get all the work we needed and still make money.”
When evaluating any labor-saving equipment for your company, be sure and look at all the hidden ways it will affect your operation: hauling from job to job, moving from wall to wall, erection and dismantle, and storage. Elevating scaffolding moves from wall to wall four times faster than frames, uses about one-third as many planks as frames, and moves to the next job in a couple of days.
Sal Monarca, a mason contractor in Connecticut, has used elevating scaffolding for more than 10 years: “It’s a huge asset to us right now, especially given the way things are. There’s nothing about it we don’t like. We rarely use frames anymore. ”